The European Committee of Social Rights (ECSR) has upheld a complaint by the trade union CC OO regarding Spain's compensation system for unfair dismissal, finding that the system violates Article 24(b) of the European Social Charter.

This assertion reinforces previous interpretations made by the ECSR regarding similar systems in other countries.

The ECSR’s ruling highlights that the current Spanish framework, which stipulates maximum compensation of 33 days' pay for each year of service capped at 24 monthly salaries, does not adequately compensate workers, particularly in cases of short employment durations.

The complaint filed by CC OO in November 2022 follows Spain’s ratification of the European Social Charter in 2021. The union argued that the existing legal framework surrounding dismissal does not align with the Charter's stipulations.

Subsequently, Spanish judges have occasionally awarded extra compensation in certain cases, considering individual circumstances.

However, a recent ruling by the Supreme Court deemed such additional compensation as non-applicable under the current regulatory framework, although it did not dismiss the influence of the Charter's ratification on future judicial interpretations.

Legal experts suggest that a forthcoming ECSR ruling may directly consider this context.

The Spanish government has not publicly committed to amending the legislation in response to the ECSR’s latest ruling.

However, the unions have cautioned that failure to act could lead to a legal quagmire around dismissal compensation due to the Charter's binding nature after Spain’s ratification.

In its complaint, CC OO contended that Spain's dismissal compensation system lacks flexibility to account for the actual damages experienced by workers and fails to provide adequate deterrent effects against unjustified dismissals.

The ECSR has reportedly agreed with this assessment, asserting non-compliance with the European Social Charter.

The union's claim further stipulates that the Spanish judicial system does not allow for reinstatement in cases of wrongful termination, referencing prior ECSR rulings that deemed similar legislative frameworks in Finland incompatible with the Charter.

CC OO has also pointed out the lack of compensation for financial damages incurred during the legal process following unjustified dismissals.

In its earlier recommendations to Spain, the ECSR highlighted that the elimination of transitional salary payments in 2012 diminished the compensatory effect of unfair dismissal payments.

The complaint asserts that Spain's failure to provide a minimum level of compensation that serves both a reparatory and deterrent purpose further violates the Charter.

CC OO additionally noted the absence of protective measures against dismissals resulting from the exercise of rights established by the Charter.

Discussions surrounding additional compensation for unfair dismissals had emerged in several Spanish courts, where judges had begun considering the Charter’s provisions in their rulings.

However, following the Supreme Court's directive in December 2024, which did not account for the Charter's ratification date in its decisions, this trend has been curtailed.

Nonetheless, the legal community maintains that the debate remains active, as judicial opinions and interpretations could evolve with future cases.

In November 2024, the Committee of Ministers of the Council of Europe recommended that Spain amend its legislation to ensure that compensation for illegal dismissals reflects the actual damages suffered by victims and their individual circumstances.

The ruling aligns with the election commitments made by Spain’s ruling parties, PSOE and Sumar, to establish stronger protections against wrongful dismissals in accordance with the European Social Charter.

The Secretary of State for Employment, Joaquín Pérez Rey, reiterated that the prevailing understanding within the government is that current dismissal practices do not meet the Charter's standards, stressing the need for compliance with international obligations.

While the Ministry of Labor has expressed intentions to initiate dialogue with social stakeholders on this matter, the Ministry of Economy argues that the current legislation suffices.

Employer organizations, in contrast, have been resistant to revisiting the compensation framework, asserting that the issue was not addressed in the recent labor reform talks.

The CEOE’s president, Antonio Garamendi, downplayed the significance of the ECSR's findings, labeling them as advisory and suggesting that other nations facing similar critiques have not pursued reforms accordingly.