Here is a complete and structured guide on how severance pay for unfair dismissal (despido improcedente) is calculated under Spanish labor law.
⚖️ Legal Framework
The calculation for unfair dismissal is primarily governed by the Workers' Statute (Estatuto de los Trabajadores), specifically:
- Royal Legislative Decree 2/2015, of October 23 (Real Decreto Legislativo 2/2015).
- Article 56.1 (General calculation rule).
- 11th Transitional Provision (Disposición Transitoria Undécima) (For contracts signed before February 2012).
🧮 How to Calculate the Severance Pay
The calculation depends entirely on the start date of the employment contract, due to the Spanish Labor Reform of 2012.
To calculate the severance, you need two key figures:
- Daily Salary: Calculated using your Gross Annual Salary (including base salary, prorated extra bonuses, and variable pay from the last 12 months) divided by 365 days (or 366 in leap years).
- Seniority: Counted in months. Any fraction of a month worked counts as a full month.
Scenario A: Contracts signed ON or AFTER February 12, 2012
According to Article 56.1 of the Workers' Statute:
- Rate: 33 days of salary per year worked.
- Proration: Periods shorter than a year are prorated by months.
- Maximum Cap: 24 monthly installments (mensualidades).
Scenario B: Contracts signed BEFORE February 12, 2012
Because the law changed on February 12, 2012, a two-tier calculation applies according to the 11th Transitional Provision:
- First Tranche (Seniority up to February 11, 2012): Calculated at 45 days of salary per year worked.
- **Second Tranche (Seniority from February 12, 2012 to the dismissal date