The seven routes to dismissal in Spain opened by the Strasbourg decision

The resolution of the European Committee of Social Law which considers that the legal limit on compensation for unfair dismissal in Spanish legislation does not comply with what is stipulated by the European Social Charter It opens a path of uncertainty with several possible forks. From a minimum change to a profound labor reform for which the coalition Executive will have a very difficult time reaching an agreement not only in the social dialogue, but also between PSOE and Sumar, These are the seven options that are presented for one of the key issues of the Legislature.

The first, obviously, is to do nothing.. In a scenario of parliamentary weakness in which the Podemos deputies have just overthrown a measure as important as the reform of subsidies Due to a direct confrontation with Yolanda Díaz after her exclusion from the distribution of portfolios, any legal change, even with the support of employers and unions, runs the risk of foundering in the Cortes. This precariousness of support It is the same reason that has forced the Budgets to be extended.

The decisions of this body dependent on the European Council, based in Strasbourg, are bindingespecially since in 2021 Spain ratified the Revised European Social Charter. A decision that also allowed UGT to present its complaint to the European body for the dismissals.

But waiting to know the fine print of the ruling, and in accordance with the numerous precedents, an explicit mandate to repeal the norm is not expected, as would be a ruling from the CJEU or a directive from the Commission. This would allow the Government not to ignore the ruling, but to gain time to postpone its compliance. This is what France, Finland and Italy have done, which also subscribe to the latest version of the Charter and whose regulation for dismissal also has been censured by the Committee.

But this would not only open a deep gap with the unions, it would also blow up the coalition government. The pact signed in October of last year between Pedro Sánchez and Yolanda Díaz pivoted in labor matters on the idea of ​​a “Labor Statute of the 21st century“which, among other issues, will establish “guarantees for workers against dismissal, complying with the European Social Charter and reinforcing causality in cases of termination of the employment relationship.” The text is ambiguous and does not cover compensation. , but it does make it clear that acting on the CEDS resolution It is an obligation assumed by both parties.

From the change of minimums to a list of grievances

The second plausible solution It is a minimum change to clarify the judicial drift of dismissals. Adherence to the European Social Charter has already given the green light to several judges adterminate compensation exceeding the limit of 33 days per year worked with a maximum of 24 monthly payments, taking into account the damage caused to the worker by their particular circumstances, and the CEDS resolution will only skyrocket its number.

Curiously, in its allegations presented before the Committee for the complaint, the Spanish Government defended that the existence of these sentences already showed that Spanish legislation allowed “reparatory” compensation in cases of unjustified dismissals. The problem is that there are also judicial decisions to the contrary, which means that the Supreme Court will have to establish doctrine. And the unions fear that the High Court will determine that what counts is what the labor law says as it stands.

Therefore, the way would be to change the regulations to ‘shield’ the power of judges to set compensation longer than 33 days without having to eliminate this limit. However, this route has the disadvantage of triggering the judicialization of dismissals. A prejudice not only for the companies but for the workers, who would be forced to exhaust the entire legal process to prove that the dismissal not only has no justified cause, but that it occurs a clear harm to the worker that the assessed compensation does not compensate.

The idea is to close the way to ‘free dismissal’ that many companies exercise today. The ‘modus operandi’ is to carry out an individual disciplinary dismissal (without compensation) that the worker must report. There, the company can recognize the inadmissibility and pay the 33 days. But, in practice, most of these cases of increased compensation are resolved in extrajudicial agreements, while those that go to trial request annulment, a case that leads to the reinstatement of the worker and that is increasingly easier to resolve. get, as we have told in elEconomista.es. For all these reasons, resorting to a judicial solution to increase the cost of compensation would not be sufficiently “deterrent” for many companies that bThey use checkbook agreements without going to trial.

The third option I would be rewrite article 56 to establish these cases of additional compensation so that the company and the worker know what to expect from the moment of termination. Here we enter a field of greater complexity for the Government, that he would have to juggle to convince not only the employers, but the unions to accept this selective increase in compensation.

The greatest risk of this solution is that, although it would strengthen the protection of some groups of workers, it would also discourage the hiring of unemployed people in the same situation. Something problematic in cases such as those of professionals over 45 years of age (an example frequently used by Díaz), which account for more than half of the unemployed.

No to dismissal within 45 days

On the other hand, although the majority of major adjustments, such as collective dismissals, focus on more senior workers (and in these cases they are not usually declared inadmissible, as they are justified by objective causes: economic, technical, organizational or production) , individual disciplinary actions that end up being declared inadmissible affect workers who have been in the company for less time, especially since the last labor reform forced to replace many temporary contracts with permanent ones

Thus, The fourth way is to establish a minimum limit on compensation so that it is not so cheap to fire these less senior workers. It is a model similar to that proposed by Italy (with a threshold of six months of compensation) or Portugal (three months). UGT is betting on the first case (although Italian legislation has also been censored by the CEDS). Companies see the Portuguese model as more feasible.

This could be a response to labor volatility, which Spain continues to lead in the EU despite the drop in temporary employment after the 2021 reformbut it would be a partial solution that would have to be complemented with any of those that affect the maximum cap.

The fifth alternative would surely be the most unviable: return to the 45 days in 42 monthly payments that were paid before the PP labor reform in 2012. The agreement in the social dialogue closed almost a decade later to promote the new reform, rejected this change for several reasons. Not the least of them is that Brussels would have rejected a general increase in the cost of dismissal, repealing a rule that, at the time, it considered a structural reform that made the rigidity of the labor market in Spain more flexible. A turn back is ruled out, although government partners such as ERC and Bildu demand it. The Executive is obliged to operate with more subtlety.

In this context, theThe sixth option is “strengthen the causality” of the dismissal to toughen the cases of nullity and inadmissibility, including cases that are not legally dismissals, such as dismissals for not passing the dismissal. In 2023 there were almost as many as there were layoffs, with more than 970,000 registered membership withdrawals.

Labor wants to move in this direction (in fact, it was part of Sumar’s electoral program) but so far his steps have been few, since the PSOE is concerned about the risk of stopping permanent hiring. In any case, the CEDS does not censure the regulation of the causes of dismissal, but rather how cases in which it is not considered justified are compensated.

A reform without agreement between PSOE and Sumar

This leaves us a seventh and last alternative: a comprehensive dismissal reform that includes variable compensation and increases pressure on companies that do not justify dismissal. For example, reinforcing the cases of nullity to impose the reinstatement of the worker in cases that until now were declared inadmissible. And by the way, even tighten those that allow objective dismissals for economic or productive reasons.

This is the most difficult door to open, because it would mean carrying out a new labor reform when the previous one has barely been two years old. It is true that PSOE and Sumar have promised to approve a new “21st century Labor Statute” in which this would fit, but the distance between both formations is increasingly evident. It has even been seen during the Committee’s processing of the decision. While Díaz unequivocally supported the union complaint, the Executive sent Strasbourg some allegations that defended Spanish regulations.

Nor is the climate in social dialogue similar to that which led to the 2021 reform. clash between the CEOE and Díaz is front and has led to the Executive going almost two years without agreeing on any measure with the employers. And obtaining their endorsement is essential to bring any significant rule to the Cortes. Although even this does not guarantee that the norm will go ahead. In the current scenario, not only the Government’s political adversaries, such as PP, Vox or Podemos, but also its partners, such as Junts, ERC, Bildu, PNV or BNG They will have a lot to say about the future of dismissal in Spain.