The European Committee of Social Rights concludes that compensation for unfair dismissal in Spain is inadequate and insufficiently dissuasive

The European Committee of Social Rights (ECSR) published on 29th July its decision, adopted on 20th March, on the complaint presented by the General Workers Union (UGT). The union argued that compensation for unfair dismissal in Spain ‘is not adequate to cover the damage suffered and does not have a dissuasive effect’. It considered that article 24 of the European Social Charter (ESC), according to which ‘in the event of termination of the employment relationship without valid reason, the right to adequate compensation must be recognized’, had been violated.

Following submissions by the Government, rejecting the complaint, and by the International Organization of Employers (IOE), the ECSR concludes that there is a violation of this article.

First, the ECSRC reviews Spanish and international legislation and jurisprudence on the subject, as well as its own considerations following previous complaints against other States.

Regarding the compensation limit of 33 days' salary per year of service and the maximum of 24 monthly payments, he considers that, although its aim is to ‘provide greater legal certainty, it could serve more as an incentive and encourage’, in certain situations, unfair dismissals. It considers that the maximum prior to the 2012 labor reform (42 monthly payments) is higher than in the other cases on which the Committee has pronounced, while the maximum after that reform (24 monthly payments) is ‘very’ like those cases. It concludes that the limits ‘are not high enough to remedy the damage in all cases and to deter the employer and may not take due account of the actual damage in relation to the specific features of the case’.

Finally, it considers that the limit ‘does not allow higher compensation to be granted on the basis of the employee’s personal and individual situation’. This is because the courts can only fix compensation ‘within the limits’ and have rejected, except in one case, additional compensation, being ‘an exception’ and a ‘very limited possibility’.

The Committee, as in other cases, is interpreting the mandate of Article 24 of the ESC in a wider sense. In any case, its report is not binding (it is not a jurisdictional decision) and could lead to a recommendation by the Committee of Ministers of the Council of Europe to the Spanish State, which has not happened so far.