Unfair Dismissal in Spain: A Practical Guide for Foreign Workers

Spanish employment law provides strong protections against unfair dismissal — often stronger than workers expect, especially those coming from common law jurisdictions. As an expat or foreign worker in Spain, you have the same rights as any Spanish employee. This guide explains them clearly.

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Types of Dismissal in Spain

Spanish law recognises three main types of dismissal:

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What Makes a Dismissal Unfair?

A dismissal is declared improcedente (unfair) when:

• The employer cannot prove the stated cause before the labour court
• The dismissal letter is deficient (does not specify the facts in enough detail, or no date of effect)
• A disciplinary dismissal was disproportionate (minor offence used to justify termination)
• An objective dismissal lacks genuine economic/technical evidence

A dismissal is declared nulo (null) — a stronger category — when:

• The employee was pregnant or on maternity/paternity leave
• The employee was on sick leave amounting to a disability (STS 29 January 2020, EU Directive 2000/78)
• The employee had recently exercised a right to reduce working hours or parental adaptation
• The employee was a union representative and the proper procedures were not followed
• The dismissal was based on discrimination (nationality, race, religion, age, etc.)

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The Compensation Calculation

For Unfair Dismissal (Improcedente)

Compensation = Daily gross salary × 33 × Years worked (max 24 months total)

Example:

• Monthly salary: €2,500 gross → Daily salary: €83.33
• Years worked: 6 years
• Calculation: €83.33 × 33 × 6 = €16,500

For Periods Before 12 February 2012

Spain changed the compensation rate in 2012 (labour reform). If you worked before that date:

• Pre-2012 service: 45 days/year (up to 42 months for that period)
• Post-2012 service: 33 days/year (up to 24 months total)

Example — 15 years' service spanning both periods:

• 5 years before 2012: 45 days × 5 = 225 days
• 10 years after 2012: 33 days × 10 = 330 days
• Total: 555 days of salary (but capped at 720 days / 24 months total)

What Counts as "Salary" for the Calculation?

Included:

• Basic salary
• Fixed supplements (seniority, night work, etc.)
• Pro-rated 13th/14th month payments
• Average commissions (based on last 12 months)

Not included:

• Travel expenses and meal allowances (if genuinely extrasalarial)
• One-off bonuses linked to exceptional performance

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Your Options After Receiving a Dismissal Letter

Option 1 — Accept and Collect Compensation

If the employer offers 33 days/year compensation at the time of dismissal, you can sign the settlement (finiquito) and accept it. Note: once you sign accepting the dismissal as justified (procedente), it is very difficult to reopen the case.

Option 2 — Challenge the Dismissal

You have 20 working days from the dismissal date to challenge it. Process:

1. File a conciliation application (papeleta de conciliación) with the SMAC — this pauses the 20-day clock
2. Attend the SMAC conciliation (usually 1-2 months later)
3. If no agreement: file a court claim with the Juzgado de lo Social (labour court)

Option 3 — Negotiate a Higher Settlement

Many cases are settled at the SMAC conciliation or before the hearing. You can negotiate:

• Higher compensation than 33 days/year (there is no legal upper limit)
• Additional compensation for unpaid salary, unused holiday, bonuses, etc.
• References and practical arrangements

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The 20-Day Deadline: Why It's Critical

The 20-working-day deadline is one of the most important differences between Spanish employment law and many other countries. Key points:

• It is a caducity period, not a limitation period — missing it extinguishes your right entirely, with no possibility of restoration
• Count working days (excluding Saturdays, Sundays and public holidays)
• The clock starts from the effective date of dismissal (the date stated in the letter, or the date you were told to leave if verbal)
• If you were dismissed verbally (no written letter): the dismissal is automatically improcedente or nulo — contact a lawyer immediately

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Verbal Dismissal: A Special Case

If your employer tells you verbally to leave and gives no written dismissal letter, this is treated as a verbal dismissal. In Spain, a verbal dismissal:

• Carries no formal notice
• Is automatically either improcedente or nulo
• Entitles you to the full 33-days/year compensation (or reinstatement if null)

The challenge is proving the verbal dismissal happened. Evidence: emails, WhatsApp messages, witness statements, payroll records showing you stopped being paid.

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Null Dismissal: Reinstatement + Back-Pay

If the court declares the dismissal null, the consequences are more severe for the employer:

• Mandatory reinstatement at the same job and conditions
• Back-pay (salarios de tramitación): all salary from the dismissal date to the court's ruling
• The employer cannot simply pay compensation instead of reinstating (except for union representatives, who can choose)

If the employer refuses to reinstate after a null dismissal declaration, there is a further enforcement process.

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Practical Timeline for Challenging Dismissal

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Tips Specific to Expats

1. Language of documents: Your dismissal letter will be in Spanish. Have a lawyer translate and review it even if you are not fluent — technical employment law terms matter.

2. NIE and contracts: Ensure your employment contract is properly registered. Some employers of casual or informal workers in tourism, hospitality or construction may not have complied fully. This affects the calculation of service years.

3. Non-EU workers: If you lose your job and your residence permit was linked to that employment, seek urgent legal advice. You may have a period to find new employment before your permit status changes.

4. Tax treatment: Compensation for unfair dismissal is exempt from Spanish income tax (IRPF) up to the statutory maximum (33 days/year × years worked). Any amount above the statutory cap is taxable.

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ALY Abogados — Employment Law for Expats in the Canary Islands

If you have been dismissed or believe your termination was unfair:

• We review your dismissal letter and advise on whether to challenge
• We calculate the maximum compensation you are entitled to
• We file the SMAC conciliation and negotiate with your employer
• We represent you at the Juzgado de lo Social
• English-speaking team — we work with expats across Gran Canaria, Tenerife and Lanzarote

Free first consultation. Call +34 633 572 607.

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Lázaro Héctor Amable Méndez — Lawyer, Bar No. 5.231 ICALPA