Unfair dismissal in Spain will no longer receive extra compensation, according to a ruling by the Spanish Supreme Court.
The Spanish Supreme Court’s ruling (STS 6112/2024, of 19 December 2024) has brought clarity to a long-standing legal debate by establishing that the only compensation available for unfair dismissal under Spanish law is that prescribed by article 56 of the Workers’ Statute (ET)[1]. This means that, regardless of the circumstances, no additional compensation can be awarded above the statutory standard—calculated as 33 days’ wages per year of service, up to a maximum of 24 months’ salary[1].
For Employers
The ruling provides legal certainty for employers, as they can now proceed with greater confidence, knowing that their exposure in unfair dismissal cases is strictly limited to the statutory framework. This predictability reduces legal risk and potential financial uncertainty.
The ruling also removes the possibility of regional courts awarding enhanced damages based on interpretations of international treaties, which had previously created a patchwork of outcomes across Spain. This consistency in the application of the law will help employers to plan and manage their HR practices more effectively.
Compliance with the law remains crucial for employers to avoid liability. However, they are now shielded from unpredictable, extra-statutory penalties.
For Employees
The ruling caps the compensation that employees can claim in cases of unfair dismissal. Employees can no longer seek enhanced damages by invoking international labor conventions or arguing for moral or economic hardship beyond the statutory formula. The statutory severance remains the only remedy[1].
The ruling limits the legal arguments available to employees’ representatives, curtailing any reliance on international treaties to push for higher awards. This means that employees must focus on ensuring strict adherence to dismissal procedures and the correct application of the statutory formula to secure the maximum possible compensation.
Broader Legal Significance
The Supreme Court reinforced that only the legislator—not the judiciary—can redefine the scope and calculation of unfair dismissal compensation. This principle restores clarity to the roles of the legislative and judicial branches in labor law[1].
The Court also clarified that while Spain is bound by international labor conventions (like ILO Convention No. 158 and the Revised European Social Charter), these do not empower courts to supplement statutory compensation; they only require that national law provide an adequate remedy, which the Court affirms Spanish law already does[1].
In summary, the Supreme Court’s decision brings consistency and predictability to unfair dismissal compensation in Spain by strictly limiting damages to the statutory formula, benefitting employers through legal certainty, while tightening the available remedies for employees challenging their dismissals[1]. The ruling ends the possibility of obtaining "additional" compensation via the courts, particularly in Catalonia.
[1] Source: Spanish Supreme Court ruling (STS 6112/2024, of 19 December 2024)
- The ruling in the Spanish Supreme Court (STS 6112/2024, of 19 December 2024) has established that business owners can now operate with legal certainty as the statutory framework for unfair dismissal compensation is the only one they need to consider, thereby reducing financial uncertainty and legal risk within their HR practices.
- In the context of employment law, the ruling serves to restrict the compensation that employees can claim in cases of unfair dismissal, as they are no longer able to seek enhanced damages through invoking international labor conventions or arguing for exceptional circumstances beyond the statutory formula.
