When an employment relationship is ended unilaterally by the employer, numerous legal and financial uncertainties immediately arise. If you find yourself in this situation, determining the compensation for unfair dismissal is the essential step to safeguard your rights. At BBM Abogados, a firm founded in 1990 in Santander, we know that facing the loss of a job requires not only composure, but a rigorous technical knowledge of the current regulations in order to react in time and secure the financial compensation to which you are legally entitled.
What is compensation for unfair dismissal and how much is it?
A dismissal is classed as unfair when the company carries it out without meeting the formal requirements set by law, or when the reasons given (whether economic, technical, organisational, production-related or disciplinary) cannot be proven before the courts or at the prior conciliation hearing. Spanish law protects the worker against arbitrary actions by the employer by requiring the latter to bear a greater financial cost if the termination of the contract lacks legitimate justification.
The declaration of unfairness is not decided unilaterally by the worker; it must be the result of an agreement at the mediation, arbitration and conciliation service (orecla in the case of Cantabria) or, failing that, ruled upon by a court judgment after bringing the corresponding claim before the Employment Courts (Juzgados de lo Social).
Once the lack of legal justification for the termination measure is recognised, the employer has a period of five days to choose between two options:
- Reinstatement of the worker on the same terms that applied before the dismissal took place, with payment of the processing salaries (salarios de tramitación) accrued from the date of termination until notification of the decision.
- Payment of the financial compensation regulated by the Workers’ Statute (Estatuto de los Trabajadores), which definitively ends the employment relationship.
If the employer does not expressly exercise this option within the legal period, the regulations determine that reinstatement of the employee is chosen automatically.
Unfair dismissal: days per year and the labour reform
To give a precise answer to what compensation I am entitled to for unfair dismissal, it is essential to analyse in detail the concept of unfair dismissal days per year. The calculation of this amount is not a fixed or discretionary figure, but is strictly indexed to two well-defined mathematical and temporal variables: the worker’s regulatory daily salary and the total length of service accumulated within the company’s organisational structure.
The current legal framework is the direct result of the labour reform of 12 February 2012, a legislative milestone that substantially modified the modules for financial compensation for the unjustified termination of employment contracts. This change introduced a dual or transitional calculation system that directly affects those workers whose length of service in the company began before the date on which that reform came into force.
To carry out the calculation correctly, it is necessary to break down the periods of service into two distinct tiers, applying to each of them the corresponding days of salary per year and scrupulously respecting the maximum limits set by the Workers’ Statute. A lack of awareness of these tiers often leads to common errors in the settlement proposals presented by companies, which highlights the importance of having proper legal advice to review each item.
The dual calculation tier: 33 days and 45 days per year worked
To calculate the total and real cost of unfair dismissal of an employment contract, we must apply the specific formulas linked to the employee’s length-of-service date. The dual-tier system is structured under the following legal parameters:
Tier after 12 February 2012: 33 days per year worked
For all employment contracts entered into from 12 February 2012 onwards, or for the period of service accrued from that date under earlier contracts, the calculation is based on 33 days per year worked. In this scenario, incomplete months are not disregarded but are prorated by full months, counting each fraction of a month as if it had been worked in full. The maximum compensation limit set by law for this tier (or for the sum of both if this threshold is exceeded in the modern period) is equivalent to a maximum of 720 days’ salary (which represents a total of 24 months’ salary).
Tier before 12 February 2012: 45 days per year worked
For those workers who began their employment before the key reform date, the period between the start of their employment relationship and 11 February 2012 is calculated at a rate of 45 days per year worked. As in the previous case, periods of less than a year are prorated by months. This historical tier has a specific maximum limit of 1,260 days’ salary (the equivalent of 42 months’ salary).
If the sum of the compensation accrued in the 45-days-per-year tier is greater than 720 days’ salary, that result will constitute the absolute maximum ceiling of the total compensation, without it being possible to apply the amount accumulated in the subsequent 33-day tier. However, if the calculation of the first tier does not reach 720 days, the amount generated in the second period can be added up to that figure of 720 days’ salary as an absolute limit.
“At BBM Abogados we defend the interests of individuals and businesses in Santander and Cantabria with a close, rigorous and fully transparent approach. If you have doubts about your case, we help you see it clearly.”
Why choose BBM Abogados to claim your compensation in Santander?
Defending against a contract termination requires an immediate response with a high degree of technical specialisation. At BBM Abogados, we are at your disposal as your trusted Employment Lawyer in Santander, bringing over three decades of experience in the continuous study of Employment Law and its practical application before the courts of Cantabria.
Our working philosophy is based on a personal approach and immediate effectiveness. On receiving notice of termination, the worker faces a strict limitation period of just 20 working days to file the conciliation request and the subsequent unfair dismissal claim.
At our Santander offices, we analyse in detail the regularity of the dismissal letter, we verify that the base salary, supplements and overtime have been accurately calculated on your payslip in order to set the real regulatory daily salary, and we support you throughout the whole claim process regarding Dismissals and Compensation. We approach each matter with the analytical rigour required by employment law, offering an environment of absolute trust so that you understand your real options from the very first moment.
Frequently asked questions about tax returns and dismissal
What is the compensation for unfair dismissal if I have a temporary contract?
The classification of unfairness can apply to a permanent contract exactly as it does to a temporary one if the latter was in breach of the law (fraude de ley) or was terminated before the agreed end date without justified cause. If unfairness is declared, the calculation will be carried out under the module of 33 days per year worked, regardless of the specific end-of-contract compensation provided for in article 49.1.c of the Workers’ Statute.
What happens if I sign the settlement as “not in agreement”?
Signing the settlement receipt while adding the express note “not in agreement” (no conforme) is an essential precautionary measure for the worker. This annotation prevents the signature from being interpreted as a release consent or an acceptance of the amounts proposed by the company, keeping the legal route fully open to claim the difference in the compensation for unfair dismissal or to challenge the reason for the termination.
Is compensation for unfair dismissal subject to personal income tax (IRPF)?
In accordance with the tax legislation in force, compensation for compulsory dismissal is exempt from taxation under Personal Income Tax (IRPF), provided it does not exceed the amount limits set as mandatory in the Workers’ Statute (the tiers of 33 or 45 days as applicable) and with an absolute maximum limit of 180,000 euros. Amounts that exceed those parameters will be subject to taxation as earned income.
Can I claim unemployment benefit after a dismissal of this kind?
Yes, the termination of the employment contract by the employer’s decision immediately places the worker in a legal situation of unemployment, which grants the right to claim contributory benefit from the SEPE, provided the minimum contribution periods required by Social Security are met. The recognition of unfairness does not alter this right. In situations of vulnerability or specific contingencies, our team also advises you on Disabilities if the termination was linked to health problems.
Protect your employment rights with expert advice
Do not leave the calculation of your settlement to chance, nor accept hasty proposals without the corresponding technical verification. When faced with any substantial change to your conditions or the end of your employment, the expert analysis of a legal professional is your best guarantee.
We invite you to return to our Home page to discover the full range of services we offer, or to get directly in touch with our offices in Santander. At BBM Abogados we will study the particulars of your case with the speed and dedication that your professional stability deserves.