Compensation Guarantee in Labour Law: Key Takeaways

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The exchange reveals a harsh comment: a manager tells a staff member that their mindset does not align with the company’s, a judgment made during a period perceived as the toughest for the business. When a major sales event arrives, the message becomes lethal for the employee, and a court later questions the validity of a risky internal decision. An employee received a compensation payout of 7,501 euros after a ruling declared the action invalid because it violated the employee’s rights.

This illustrates the application of the so-called compensation guarantee, a legal principle meant to curb retaliation against workers who assert their rights in the workplace and to protect the stability of labor relations.

HE Francisco Trujillo, a professor of Labor and Social Security Law at Universitat Jaume I, noted to El Periódico de España that penalties are increasingly lighter when evaluating the proof needed to trigger this guarantee. Employers must justify dismissals or decisions that run counter to the employee’s interests with solid evidence.

power differences

In the cited case, a phone conversation between the employee and the direct supervisor was used as evidence. The expert described this as illustrating power imbalances and a tendency to prioritize the company’s competitiveness over the health and work-life balance needs of the worker.

The Constitutional Court has stated that dismissals claimed by employees as discriminatory or prejudicial to a fundamental right require employers to prove a reasonable reason grounded in evidence that creates doubt. This protection also covers union claims over collective disputes or complaints to labor authorities.

The March ruling awarded compensation to the dismissed worker. The employee had a contract with a 45-day trial period spanning September to December 2022. After a phone call on October 3, the worker was informed that the employment relationship had ended.

Unpaid overtime

Throughout the testimony, the worker’s inconsistency grew from a perceived lack of respect for a standard workday. The supervisor argued that overtime was required and would not be compensated.

The employee described long, demanding shifts with minimal rest. When questioned about the overtime, the worker cited anxiety over colleagues and a desire to defend rights, noting plans to pursue a different career path. The supervisor stated that the compensation would not exceed the trial period, and that the worker’s mindset did not match the company’s expectations.

The judge saw the exchange as evidence of internal pressure from the employer that harmed the worker’s fundamental rights related to the workday. Because the employer did not present counter-evidence to refute this indicator, the dismissal was deemed invalid, the employee should be reinstated, and compensation awarded.

Proving retaliatory dismissal is not always easy. A separate Madrid Supreme Court decision from December 1 declined to apply the compensation guarantee in a case where an August 2022 dismissal and a salary claim from a year earlier overlapped. The court noted that the later hire did not replace a worker who had been let go, as they belonged to a different role category.

Trujillo emphasized that the ruling underscores the need for rational proof of any potential breach of the compensation guarantee. Courts want objective, reasonable justification for the measures taken. When claims of retaliation arise, they must rest on solid facts rather than mere suspicions, forming a credible basis for decision-making.

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