Redundancy and collective layoffs (despido objetivo and ERE)

Key rules

• Severance: The legal minimum is 20 days of salary per year of service, capped at 12 monthly payments.
• Notice: Your employer must give written notice 15 days before the contract ends and make the severance available at the same time.
• Collective threshold: A dismissal is collective when, within 90 days, it affects 10 workers in companies under 100, 10% in companies of 100 to 299, or 30 in companies of 300 or more.
• Court deadline: You have 20 working days to challenge a dismissal in court.
• Job search time: During notice you get 6 paid hours a week to look for another job.

The short version

Your employer cannot dismiss you for economic or similar reasons without a legal cause, a set procedure and notice. The minimum severance is 20 days of salary per year of service, capped at 12 monthly payments. If the company dismisses enough people at once, the stricter collective procedure applies.

When an objective dismissal is allowed

A despido objetivo is a dismissal for a reason linked to the job or the business, not to your behaviour. The valid reasons are:

• Economic, technical, organisational or production causes, where the number of dismissals stays below the collective thresholds.
• Ineptitude that arises after you were placed in the job.
• Failure to adapt to technical changes in your job. This needs at least two months after the change, and the employer must have offered you training.
• End of funding, if you work in a programme paid by public subsidy and the money stops.

Being off sick too often is no longer a valid reason. That ground was repealed in 2020.

What your employer must do

For an objective dismissal, your employer must:

1. Give you a written notice that states the cause.
2. Give you that notice 15 days before the contract ends and make the severance available at the same time.
3. Send a copy to your staff representatives, if you have them.

If the company cannot pay because of economic reasons, it must say so in writing, and you can still be dismissed.

The consequences of mistakes differ:

• No written cause, or no severance handed over: the dismissal is improcedente (unfair).
• Less than 15 days' notice: the dismissal is not unfair for that reason, but you are owed salary for the missing days.

During your notice you can take 6 paid hours a week to look for another job.

How much severance you get

The minimum is 20 days of salary per year of service, with part years counted by months, and capped at 12 monthly payments. The minimum is the same for collective dismissals. Agreements reached during consultation often improve on it, so ask what is on offer before you sign anything.

When it becomes a collective dismissal

A dismissal is collective when, within 90 days, it affects:

• 10 workers in a company with fewer than 100 workers
• 10% of the workforce in a company with 100 to 299 workers
• 30 workers in a company with 300 or more

Dismissals in that period are added together. A company cannot avoid the rules by spreading dismissals into later 90-day periods. If it does so to dodge the thresholds, those dismissals are treated as fraud and are void.

Closing the whole business is also collective when the company has more than five workers and the employer is ceasing activity.

How a collective dismissal works

1. The employer opens a consultation period with your workers' representatives (or an ad hoc commission). It sends them written notice, an explanatory report on the causes and the selection criteria, and supporting documents. It notifies the labour authority at the same time.
2. Consultation lasts at most 30 calendar days, or 15 days in companies with fewer than 50 workers. Both sides must negotiate in good faith to try to reach an agreement. The labour authority can warn or assist.
3. The employer notifies the labour authority and your representatives of its final decision.
4. You then get an individual dismissal letter. At least 30 days must pass between the opening of consultation and the day your dismissal takes effect.

If you have no representatives, ask your employer who represents the workers in the process. Ask them for the report and selection criteria.

If you think it is wrong

You can challenge the dismissal in court within 20 working days of it taking effect. Do not let that deadline pass while you negotiate. The timeline, documents and checklist below show what to keep and check. Whether the thresholds are met, and whether your sector has extra rules, depends on your case, so a labour lawyer or a union can check it for you.

Timeline and deadlines

• Dismissals over the last 90 days are added together to see whether the collective thresholds are reached: within any period of 90 days

• Employer opens consultation with workers' representatives and notifies the labour authority (collective dismissal only): at the start of the collective procedure

• Employer notifies the final decision to the labour authority and representatives: when consultation ends

• Individual dismissal letters follow, with at least 30 days between opening consultation and the dismissal taking effect: at least 30 days after consultation opens

• Use your paid licence of 6 hours a week to look for another job: during the notice period

• Challenge the dismissal in court: within 20 working days from the day after the dismissal takes effect

Documents you need

• Written dismissal notice from your employer that states the cause of the dismissal

• Proof that the compensation of 20 days per year (up to 12 monthly payments) was made available when you got the notice, or a written statement of the economic reasons why it could not be paid

• Confirmation that a copy of the notice went to your staff representatives, where you have them

• For a collective dismissal, the employer's written notice opening consultation, sent to your representatives

• For a collective dismissal, the explanatory report on the causes and the selection criteria, with its supporting documentation, which the employer gives your representatives

• For a collective dismissal, the employer's notice of the final decision to the labour authority and your representatives

• For a collective dismissal, your own individual dismissal letter, issued after consultation ends

Checklist

• Check that the dismissal letter states the cause in writing

• Check that the severance of 20 days per year, up to 12 monthly payments, was made available when you got the letter, or that the letter explains the economic reasons it could not be paid

• Count your notice and confirm you got 15 days before the contract ends; if you got less, ask for the salary for the missing days

• Check that a copy of the notice went to your staff representatives

• Count the dismissals in your company within 90 days and compare them with the thresholds for its size

• Ask your representatives for the explanatory report, selection criteria and supporting documents if the dismissal is collective

• Check that at least 30 days passed between the start of consultation and the date your dismissal takes effect

• Count 20 working days from the day after your dismissal takes effect and note the last day to challenge it

What to watch out for

• Dismissals split up to avoid the collective rules: If your employer makes further individual dismissals in later 90-day periods to stay under the thresholds, they are treated as made in fraud and are void. If you think your dismissal is one of a series, tell your representatives or a labour lawyer and challenge it within the deadline.

• Dismissals add up over 90 days: Dismissals within 90 days are added together, so a company that dismisses a few people at a time can still reach the threshold for a collective dismissal. Ask colleagues and your representatives how many people have been dismissed recently, and compare with the threshold for your company's size.

• Closure of the whole business: If the company has more than five workers and dismisses everyone because the employer ceases activity, it is a collective dismissal whatever the size thresholds. Ask for the consultation procedure with your representatives and keep the documents you receive.

Frequently asked questions

Can my employer dismiss me for being off sick too often?

No, dismissing you for frequent but justified absences is no longer a valid ground, because that ground was repealed in 2020. An objective dismissal today needs another cause, such as ineptitude that arose after you started, a lack of adaptation to technical changes, or economic, technical, organisational or production reasons.

Is my dismissal unfair if I got less than 15 days' notice?

No, short notice alone does not make the dismissal unfair, but your employer must pay you the salary for the missing days. A missing written cause or missing compensation is different: either one makes the dismissal improcedente (unfair).

How many paid hours can I take to look for a new job during my notice?

You are entitled to paid licence of 6 hours a week during the notice period to look for another job. It applies while you work out your notice.

Is a company closure a collective dismissal even if it has few workers?

Yes, if the company has more than five workers and the whole workforce is dismissed because the employer stops its activity, it counts as collective. The size thresholds do not matter in that case, so the consultation procedure with your representatives applies.