The Supreme Court of Appeals Department issued a ruling stating that a “serious” delay in paying an employee’s salary can justify termination of the employment contract and that the employee is entitled to compensation equal to the amount of the wrongful dismissal.
In its decision, the court connected the doctrine to a workers’ grievance raised by someone employed by a company for over a year, where the average salary delay was 10.5 days. The company had outstanding debts to various authorities, including restrictions, embargoes, and payment requirements from the Social Security General Treasury and the Tax Office, which contributed to the situation.
The worker was held accountable for the salary delay, with the court recognizing a termination of the employment contract as warranted and the company awarded compensation for the dismissal. The Madrid High Court of Justice (TSJM) had previously ruled against the worker, finding the average delay in salary payments to be not excessive and arguing that the company’s financial difficulties made such delays predictable as part of a recurring practice.
By contrast, the Court of Cassation did not share that view. It observed that the TSJM had delayed salary payments for an entire year and annulled that decision, noting an average delay of 10.5 days. It stated that employers incur a legal obligation to pay wages on time, and it suffices to acknowledge the existence of grounds to terminate the employment relationship at the employee’s request, as outlined in the labor statute.
The ruling clarifies that serious non-payment arises not from occasional delays but from persistent behavior that undermines the employer’s duty to pay wages owed. This interpretation reflects the court’s stance on the seriousness of wage non-compliance as a factor justifying termination under labor law.
During the period from April 2019 to March 2020, the worker reportedly received wages with an average 10.5-day delay, and the salary for April 2019 was paid in two installments, on May 20 and May 31, 2019.
The Supreme Court concluded that this delay met the threshold of seriousness sufficient to terminate the employment contract and to order the company to pay the compensation provided for wrongful termination under the applicable labor statutes.
Specifically, in relation to the case, the company Valores y Servicios Técnicos de Centro was ordered to compensate the worker with 48,232.73 euros. This amount reflects the court’s determination of damages associated with the unwarranted termination of the employment relationship and the misalignment with timely salary payments that employees are legally entitled to receive.