Termination and Severance in Spain: Employer Guide

Ending employment in Spain requires the right ground, procedure and calculation. A payment described as “severance” does not cure an unsupported dismissal, and an estimate based only on annual salary can miss seniority, variable pay, transitional rules and statutory caps.

Main routes

Objective dismissal

Statutory grounds include economic, technical, organisational or production reasons and certain worker-related grounds. The employer must state the cause in writing, make the statutory severance available when required and observe the notice rules. The standard severance is 20 days of salary per year of service, capped at 12 monthly payments.

Disciplinary dismissal

This route requires a serious and culpable breach and a written letter setting out the facts and effective date. A fair disciplinary dismissal carries no statutory severance. Collective agreements and representative status may add procedural safeguards.

Following the Spanish Supreme Court judgment announced on 18 November 2024, employers must generally give the worker an opportunity to respond to allegations before a new disciplinary dismissal, applying article 7 of ILO Convention 158, unless it cannot reasonably be required. The judgment preserved the previous position for dismissals predating the new doctrine; current cases need a documented prior-hearing step.

Collective dismissal

When the statutory thresholds and reference periods are met, an individual objective-dismissal letter is not enough. The collective procedure, consultation and authority notifications must be followed.

If a dismissal is held unfair

The employer generally chooses between reinstatement and statutory compensation, subject to special rules. The current formula is 33 days of salary per year, capped at 24 monthly payments. Service before 12 February 2012 may require the transitional 45/33-day calculation and its specific overall cap. Protected situations can lead to nullity and reinstatement rather than a compensation-only outcome.

How to calculate before deciding

1. Confirm the legal employer, contract, seniority and any transfer of undertaking.
2. Build the regulatory salary from fixed and applicable variable pay.
3. Identify the route, formula, proration and cap.
4. Separate severance, notice pay, unused holiday, salary and other settlement items.
5. Check tax and social-security treatment item by item.
6. Review collective agreement, representation, leave and protected-right risks.

Challenge deadline

A worker generally has 20 working days to challenge dismissal. Prior conciliation or mediation is normally required under the Social Jurisdiction Act and affects the deadline as provided by law. This is a limitation period, not an estimate of how long the full dispute will take.

Documents to retain

• evidence supporting the ground and the decision date;
• prior-hearing notice and response for disciplinary cases;
• dismissal letter and proof of delivery;
• salary and seniority calculation;
• severance and settlement payment evidence;
• consultation or representative communications where applicable.

NRRO can review the chosen route, documents and calculation for a specific Spanish employment relationship. This guide is not a substitute for case-specific advice.

Official sources

• Spanish Workers' Statute.
• Social Jurisdiction Act 36/2011.
• Spanish Judiciary: Supreme Court prior-hearing judgment, 18 November 2024.

Reviewed on 27 August 2026.