Barcelona’s third judge of the social court issued a ruling that obliges a company to pay additional compensation, legally recognized as a layoff payment. This extra amount is calculated through a pioneering approach: the company must compensate the former employee for the difference between what they earned while employed and what they earned after dismissal, starting from the termination until the worker secures new employment. In essence, the company owes the gap between the employee’s previous wage and the unemployment benefits or new earnings the worker obtains as they search for a new position.
The judge condemned the company Conillas Garden Center SL, noting unfair dismissal and ordering extra compensation on the understanding that the legally established amount was insufficient to deter improper practice and to fully compensate the employee for the harm suffered.
These conclusions appear in a decision issued in late September and discussed on the legal blog of the director of legal and political science studies at the UOC, Ignasi Beltrán. The events trace back to late September of the previous year, when the defendant company notified the employee by letter of dismissal, citing objective reasons. The employee argued that his performance did not meet the expectations of his superiors, resulting in the end of the seven-month employment relationship.
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Given the worker’s short tenure, the remaining compensation appeared minimal, prompting the employee to request an additional payment. He argued that the amount set by law did not align with international norms and referenced the ILO Convention No. 158, which frames compensation as a deterrent to discourage misuse of layoffs. While awaiting a ruling, the fired worker applied for unemployment benefits and began seeking new opportunities. Eight months later, he found a new position.
Upon review, the judge determined that the dismissal was unfair because the company failed to provide a proper justification for the alleged poor performance of the employee.
unfair dismissal
The judge emphasized that a dismissal letter must be concrete, precise, and factual, avoiding vague expressions or broad accusations. “The content of the letter cannot be merely general,” the ruling notes. “Accusations or imputations of conduct must be explicit, with facts, dates, and the circumstances clearly recorded.” The decision concluded that the dismissal letter in question did not meet these standards.
The distinction between compensation for objective dismissal and compensation for unfair dismissal can be substantial, since the former yields a different calculation. In this case, the employee received 1,506.78 euros, a sum far below a month’s gross salary of 2,083.33 euros. The magistrate’s doctrine, already applied by courts such as the High Court of Justice of Catalonia, indicates that the purpose is not to fully compensate all damages but to serve a deterrent function, encouraging fair practices by employers.
Barcelona’s social justice judge highlighted that the company’s conduct generated a loss of potential earnings for the affected worker. Loss of profit, in this context, refers to the income the worker would have earned had the dismissal not occurred. The worker sought compensation to address the financial harm caused by the company’s actions, underscoring the need for accountability in labor relations.