Severance Pay in Spain

Severance Pay in Spain can be tricky: if your employment contract is terminated, you will find the process different from what you may expect.
Article Published: 03 Apr, 2020, Updated: 19 Jan, 2023 under Employment Law

Unfortunately, for many non-Spanish living and working in Spain, they find employment - at least initially - in jobs with irregular working patterns in hospitality and other industries dependant upon seasonal fluctuations such as tourism. This can lead to rather higher frequencies of redundancies as a result of the precarious nature of such businesses.

If you should find yourself in the situation of having your employment contract terminated, you will find that the process is quite opaque and certainly will be different from what you may have expected in your home country, as in many cases severance pay in Spain can be tricky. 

In this video you will find some information on steps to take and situations to avoid - but, as in all cases of legal doubt, it is always best to consult an English-speaking employment lawyer in Spain so that you can be sure your rights are protected.

 

Severance Pay in Spain: Key concepts to be particularly careful about

  • Proportional part of extra bonus payment (summer and Christmas) in case they have not been prorated.
  • Accrued and not enjoyed vacations.
  • Payment of days of notice not fulfilled.
  • Severance pay (except disciplinary dismissal and resignation of the worker).
  • Payment of overtime work (if you have done it).

 

  1. Did you know that in certain situations, the worker may voluntarily terminate his contract with the right to severance pay? In cases of serious breach by the employer of his obligations, non-payment of wages or continuous delays in payment of wages.
  2. When does the severance pay have to be paid? The severance pay has to be paid on the date of the dismissal. The employer cannot impose a deferment of the severance pay.
  3. Bear in mind that when the amounts to be paid do not exceed the maximum cash payments. It is very usual that the settlement document contains the formula "I have received in this act the amount of ..."
  4. Pay Attention to the date of the settlement document. The employer must always give you a copy of it. Demand it, if necessary.
  5. Pay Attention to the date of notice. In case you are notified in advance, with the notice letter, the employer must give you the final settlement document including all the amounts owed as of the date of termination.
  6. Are you sure you have not done Overtime Work? In case of termination of your work contract, review in the applicable framework labour agreement the maximum work hours of a year... Make a proration based on the time worked ... Did you get less than you should have based on the number of hours you have worked? Well the difference is overtime. This is usual with irregular, daily work hours.
  7. Of course, if you have the slightest doubt you may have, sign as “not in compliance”.
  8. And, do not forget to date and add with a pen “AMOUNTS PENDING OF REVIEW

Given the complexity of the situation, if you are facing termination of your employment contract, it is a good idea to speak with a lawyer so they may review the situation and offer advice that could be worth a substantial sum of money.

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