Unfair dismissal in Spain is a bargain for companies. At least that is what the European Committee of Social Rights (CEDS), dependent on the Council of Europe, has been telling Spain for years. Throughout this time, the Government has turned a deaf ear to the recommendations from Brussels.
However, an unexpected turn caused by the mistake of a representative of the Popular Party During a vote in Congress, a Non-Law Proposal (PNL) by Sumar was allowed to prosper, which urges the Government to present a bill to reform the laws that prevent the application of the restorative dismissal that Europe has actively and passively requested.
Europe has been warning since 2021. When Spain ratified in 2021 the European Social Charterassumed the commitment to harmonize its labor legislation with its principles. Since then, the European Committee of Social Rights (CEDS), an advisory body of the Council of Europe, has reiterated that the Spanish system, based on a fixed calculation of 33 days per year worked and a maximum of 24 months, does not meet the criteria of said commitment.
The problem is that the European Social Charter is a set of guidelines, but it is not binding, and the CEDS is a consultative body, so it cannot demand legislative modifications from Spain. Its resolutions are recommendations, valuable from a legal and political point of view, but without executive force. This lack of obligation has allowed Spain to postpone reforms that would change the way compensation is calculated for employees for unfair dismissal.
The cornerstone: article 24. The point of greatest friction to undertake the reforms is found in article 24 of the European Social Charter. It requires “the right of workers dismissed without valid reason (unfair dismissal) to adequate compensation or other appropriate relief.”
This means ensuring that compensations to employees for unfair dismissal must be “appropriate and dissuasive”. Something that, as a general rule, does not occur in the system of fixed compensation that is currently applied in all judicial processes for unfair dismissal.
This time the request has not come from Europe. Despite having dictated different resolutions and requestsnothing has changed in Europe’s position, nor has it gained power to force Spain to implement the legislative changes. However, what has changed is internal politics.
In September, a Non-Law Proposition promoted by Sumar managed to get ahead thanks to the voting error of a PP deputy, repeating the scene that in 2022 allowed approve the labor reform. This NLP does not modify the law itself, but it does urge the Government to begin the legislative process to adapt the regulations to the European framework.
This implies the opening of a social dialogue table with unions and employers and, subsequently, the preparation of a bill that must return to Congress to be voted on. The reform of the regulations to legislate unfair dismissals, therefore, is still a long way off, but for the first time the Executive is obliged to put it on the table.
“Restorative dismissal” is not a type of dismissal. Among all the CEDS recommendations, none has generated as much debate as the so-called restorative dismissal. The name can lead to confusion: it is not a new category of dismissal as the disciplinarynull or inadmissible, but refers to a proposal to transform How compensation is calculated when a dismissal is declared unfair.
Europe considers that the current Spanish system is too predictable and, in many cases, insufficient. The result is that companies can treat unfair dismissal as a more or less easy cost to assume and choose which employees or how many to dismiss based on the cost of the operation. Restorative dismissal causes this calculation to vary from one employee to another and is under the sole discretion of a judge, which would prevent companies from calculating in advance the final cost of the dismissal.
What is restorative dismissal?. As its name indicates, restorative dismissal is a model that seeks to individualize the severance payment to the specific damage it causes to the dismissed employee, instead of an automatic calculation based in days per year worked.
Judges could assess specific factors in each case, taking into account factors such as the age and social situation of the worker, the real probability of re-entering the labor market, the economic and personal impact of the dismissal, or the size, solvency, or economic capacity of the dismissing company.
Based on these factors, for example, a 60-year-old worker with children and a 24-year-old single worker who were fired by the same company in similar positions would obtain different compensation because, statistically, the older one would have less likely to return to the labor market than the young person. Europe understands that this flexibility is essential to repair the real damage of dismissal and to act as a preventive mechanism.
Deterrence, protection and less business calculation. The objective of restorative dismissal is not only to better compensate the worker based on the impact caused, but also to discourage the appeal of unfair dismissal and that, if companies really have economic problems that justify dismissals, they do so through dismissals for objective reasons.
If the cost is no longer predictable, the company loses the ability to make profitability calculations. This protection measure especially affects precarious groups who, due to their low salary or short seniority, are very cheap to fire: young people, women and precarious workers.
Furthermore, Europe insists that the reinstatement after dismissal inadmissible should no longer be optional for the company as it is currently, and should become a real possibility imposed by the court when it is appropriate. Restoration, in this sense, is not only economic, but also labor-related.
Justice has its hands tied. Despite Europe’s insistence, the Spanish courts have rejected impose compensation higher than the current scale included in the article 56 of the Workers’ Statute.
The reason was not a lack of judicial will, but the absence of a legal framework that would allow additional compensation to be established without generating legal uncertainty.
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Image | Unsplash (Syd Mills)
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