The Spanish Supreme Court rules out 'additional' compensation for unfair dismissal

A Supreme Court ruling (STS 6112/2024, of 19 December 2024) has clarified and settled the ongoing debate over whether courts may award compensation above the statutory severance for unfair dismissal under Spanish law.

In recent years, some rulings from regional high courts, particularly the Catalonia High Court of Justice, had accepted claims for additional compensation beyond the limits established by article 56 of the Spanish Workers’ Statute (ET).

These courts invoked International Labour Organization (ILO) Convention no. 158 and article 24 of the Revised European Social Charter, arguing that statutory severance might not always provide an adequate remedy, particularly in cases of short-term employment.

The Supreme Court, sitting in Plenary Session, has now firmly rejected this position and held that: "The only compensation available for unfair dismissal under Spanish law is that established by article 56 ET."

The court emphasised that ILO Convention no. 158 merely requires national laws to provide adequate remedies, without prescribing specific formulas or empowering courts to increase statutory severance on a case-by-case basis. In Spain, the legal framework is clear: compensation is calculated according to a set formula based on years of service, with no judicial discretion to increase it further.

The Supreme Court also recalled that this approach has been endorsed by the Spanish Constitutional Court, which confirmed that it is the legislator — not the courts —that is responsible for defining the scope and calculation of compensation for unfair dismissal.

As a result, it is not possible to claim additional compensation for unfair dismissal in Spain by invoking international treaties.

What does this ruling mean for employers?

• Legal certainty: Companies benefit from increased predictability regarding potential costs for unfair dismissals.
• End of judicial risk for “additional” compensation: This ruling closes the door on claims for extra compensation via the courts, particularly in Catalonia.
• Clarity in restructuring processes: Employers can rely on the current statutory framework when assessing employment-related contingencies.

And for employees?

This ruling closes the door on attempts to obtain additional compensation (for example, for moral damages or loss of opportunity) beyond the statutory severance for unfair dismissal.

Osborne Clarke comment

This ruling restores consistency to the system and reinforces the current statutory framework as the sole reference when calculating compensation for unfair dismissal in Spain. It dispels any doubts about the potential direct effect of international treaties on this matter.

If you would like more information on how this ruling may impact your company or restructuring processes, please do not hesitate to contact our Employment Law team.