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Employer’s Second Thoughts are Permitted in an Unjustified Dismissal

Written by
Sagardoy Abogados largest boutique firm focusing on HR law.
Analysis of Spanish case law relating to the question whether an employer is legally permitted to have "second thoughts" in unjustified dismissal cases

In a dispute recently litigated in Spain, the employer acknowledged that the discharge of the employee was unjustified and thus sought to pay severance. An indemnity package was offered, but the employee never accepted it. In turn, the employee filed suit alleging the amount to be paid should be higher, in conformity with seniority he had accrued. Eventually, the Madrid Superior Court confirmed the court of first instance’s ruling by granting the employee’s lawsuit.

The issue that truly came into play was that, after such decision, in conformity with Section 56.2 of the Workers’ Statute Act, employers are–within five working days after the ruling being notified–legally entitled to pay proper severance or reinstate the employee in his last position with equal rights. In this regard, the Spanish Supreme Court has examined whether an employer’s first stance to terminate an employee is binding, or whether a choice between severance payment or reinstatement is still possible.

In December 2009, the Supreme Court en banc held that, because the employer’s first offer to the employee to reach a deal avoiding a potential judiciary conflict was never accepted, its ability to decide between the two options – terminate or reinstate – cannot be prevented, as this would run afoul of Section 111.1(b) of the Employment Procedural Act.

Unfortunately for the employee in this case, the employer’s option for reinstatement required him to leave his current job, since he was already working for another company.

Jose Miguel Mestre
José Miguel Mestre Vázquez
Senior Associate - Spain
Sagardoy Abogados