Losing your job is never easy. And when you’re working in a foreign country, the uncertainty can feel even greater: Was the dismissal legal? Are you entitled to compensation? Can you take action? This guide is designed for foreign workers employed in Spain under Spanish labor law. Here, we explain everything you need to know about employment termination and severance pay in Spain. Step by step, we’ll walk you through what to do if you are dismissed, how to calculate your compensation, and when it’s worth challenging the dismissal. Knowing your rights is the first step to defending them.
1. Types of Employment Termination in Spain
The first step is to read the dismissal letter carefully. It should state the reason for the termination. Your rights and options depend on the type of dismissal:
- Disciplinary dismissal: Due to serious misconduct (e.g. repeated lateness, insubordination, violence). It does not include compensation, but if you challenge it and it is declared unfair, you can obtain compensation of 33 days per year worked (up to 24 months), or reinstatement. The company may also recognize the unfairness of the dismissal at the conciliation hearing (SMAC) or in court.
- Objective dismissal: Based on economic, organizational, technical or production-related reasons. Entitles you to 15 days’ notice and 20 days’ severance pay per year worked (max 12 months). If declared unfair, you’re entitled to 33 days per year worked or reinstatement.
- Collective dismissal (ERE): Similar to objective dismissal but affects several employees. You may challenge it individually if procedural requirements or justifications are not met.
- Unfair dismissal: If acknowledged by the company (at SMAC or in court) or ruled by a judge. You receive either compensation (33 days per year worked) or reinstatement with back pay.
- Void dismissal: If it violates fundamental rights (e.g. pregnancy, reduction of working hours for care, retaliation). The employer must reinstate you and pay all lost wages.
Understanding the type of dismissal is essential, as it directly affects your rights in cases of employment termination and severance pay in Spain.
2. What to Do After Employment Termination
- 📄 Read the dismissal letter carefully. Take your time and request a copy.
- ✍️ Sign “not in agreement” if you intend to dispute the dismissal or need time to review the documents. This protects your right to challenge it later.
- 📑 Ask for copies of the severance pay and any other documents. You have the right to see details of what the company owes you (unused holidays, bonuses, etc.).
- ⚠️ Don’t sign private agreements without legal advice. You may be giving up your right to take legal action.
3. Challenging Employment Termination in Spain
If you believe the dismissal is unjustified, you can initiate a legal challenge. Here’s the general procedure:
- File a conciliation request with SMAC (Servicio de Mediación, Arbitraje y Conciliación) within 20 working days from your dismissal.
- Conciliation hearing at SMAC: A meeting between you and the employer, overseen by a conciliation officer, to try and reach an agreement. If successful, no court case is needed.
- Labour Court claim: If no agreement is reached, you can file a claim with the labour court. A judge will rule whether the dismissal was fair, unfair or void.
4. Severance Pay in Spain: How to Calculate It
Your severance pay depends on the type of dismissal and your gross salary, including prorated bonuses. It’s essential to calculate it correctly to ensure the offer is fair.
You can use the official tool provided by the General Council of the Judiciary of Spain:
👉 Official severance calculator
🧾 To use the tool, you’ll need:
- Start date of your contract
- Date of dismissal
- Monthly gross salary (including prorated bonuses)
⚠️ Ensure the salary data is accurate, as your compensation depends on it. Check your payslips or employment contract if needed.
5. Legal Support
Spanish labor law can be complex, and each case is unique. If you’ve been dismissed and aren’t sure how to proceed, it’s essential to seek legal help.
At Red Jurídica, we have bilingual labor lawyers with extensive experience representing foreign workers in Spain. We’ll assess your case, explain your rights, and support you throughout the process, including legal claims if necessary.
If you are facing employment termination and severance pay in Spain, it’s important to seek legal guidance as soon as possible to protect your rights.
