Spanish employment law rests on the Estatuto de los Trabajadores plus a dense layer of sectoral convenios colectivos (collective agreements) that bind every employer in a sector — setting minimum pay, hours and conditions far above the statutory floor. Contracts are indefinite by default since the 2022 labour reform gutted temporary contracts. Dismissal is expensive and rule-bound: objective dismissal costs 20 days’ pay per year (capped at 12 months), while unfair (improcedente) dismissal costs 33 days per year (capped at 24 months) — and null dismissals require reinstatement plus back pay. Employees get 30 calendar days’ holiday, 14 public holidays, mandatory daily time registration, and 16–19 weeks of fully-paid, non-transferable parental leave per parent.
In Spain, the question is never whether you can dismiss someone — it is what it will cost. Spanish employment law is a compensation system disguised as a protection system: employers may terminate for almost any reason, provided they pay the statutory tariff, and the entire practice of Spanish HR consists of choosing which tariff applies. Around that sits a collective-bargaining architecture that quietly governs most of the terms an expat assumes are negotiable, a working-time regime with mandatory clock-in, and family leave that is among Europe’s most equal. This guide covers the 2026 position: contract types after the 2022 reform, convenios, working time and time registration, the three dismissal categories and their prices, redundancy and the ERE, leave entitlements, and how disputes actually run.
How much does dismissal cost?
Objective dismissal (economic, technical, organisational, production grounds, or incapacity): 20 days’ salary per year of service, capped at 12 months’ pay. Unfair dismissal (where the employer cannot justify the grounds, or acknowledges unfairness): 33 days per year, capped at 24 months — with 45 days per year for service before February 2012.
What is a convenio colectivo?
A sectoral or company collective agreement with the force of law for all employers in scope — setting minimum salaries by category, working hours, bonus payments, leave, and often disciplinary rules. It applies whether or not your employer signed it, and it overrides less favourable contract terms. Find yours before you negotiate anything.
Is time registration really mandatory?
Yes — every employer must record the daily start and end time of every worker, keep the records for four years, and produce them on inspection. It is enforced with real fines, and the absence of records shifts the burden of proof on overtime claims onto the employer.
What did the 2022 labour reform change — and what contracts exist now?
Spain’s 2022 reform (RDL 32/2021) attacked the country’s chronic temporary-employment problem by effectively abolishing the general fixed-term contract: contracts are now indefinite by default, and temporary contracts survive only in narrow forms — circunstancias de la producción (genuine, unforeseeable production peaks, limited to six months, extendable to a year by convenio) and sustitución (covering a specific absent employee). The old obra o servicio contract is gone.
The reform also revived and strengthened the fijo-discontinuo (permanent-seasonal) contract for genuinely intermittent work, and tightened rules on subcontracting. Misuse of a temporary contract now converts the worker to indefinite status — and labour inspectors pursue it.
Probation (periodo de prueba) is set by convenio, typically up to six months for qualified technicians and two months for others; during it either party may terminate freely without compensation — the one genuinely cheap exit in Spanish employment law, and the reason employers use it carefully. A probation clause in a temporary contract of under six months is capped at one month.
How do convenios colectivos actually bind you?
This is the concept expats most often miss: a convenio colectivo — negotiated between unions and employer associations at sectoral (often provincial) or company level — has erga omnes effect: it binds every employer within its scope, whether or not they participated. It sets minimum salaries by professional category, the annual working-hours ceiling, bonus (pagas extra) arrangements, additional leave days, seniority payments, and often disciplinary procedures.
Consequences: your salary must meet or exceed the convenio’s category minimum; your working hours cannot exceed its annual limit; and terms in your contract that are worse than the convenio are void and replaced by it. Conversely, terms better than the convenio stand — the convenio is a floor, not a ceiling.
For an expat this means the first document to read is not your contract but the applicable convenio (identified by the employer’s activity and province). It will tell you the annual hours you owe, the extra payments you are entitled to, and often the notice and disciplinary rules that govern your exit. Spanish HR treats it as background furniture; an informed employee treats it as leverage.
What are the three types of dismissal — and what do they cost?
Disciplinary dismissal (despido disciplinario): for serious, culpable breach — repeated unjustified absence, indiscipline, breach of good faith, harassment. If upheld, no compensation at all. If the court finds the grounds insufficient, it becomes improcedente and the 33-day tariff applies. Employers must serve a carta de despido stating the facts and dates precisely — a defective letter loses the case regardless of the underlying conduct.
Objective dismissal (despido objetivo): economic, technical, organisational or production grounds, or documented incapacity. Cost: 20 days’ salary per year of service, capped at 12 months, plus 15 days’ notice (or pay in lieu), with the compensation made available at the moment of notification. If a court rejects the grounds, it converts to improcedente at 33 days.
Unfair dismissal (despido improcedente): the practical workhorse. 33 days per year of service, capped at 24 months (with 45 days per year for service accrued before 12 February 2012, under the transitional rule). The employer chooses between reinstatement and compensation — and almost always chooses compensation. Many Spanish dismissals are simply despidos reconocidos como improcedentes: the employer concedes unfairness upfront and pays the tariff, buying certainty.
Null dismissal (despido nulo): where the dismissal violates fundamental rights or protected situations (pregnancy, parental leave, retaliation for a claim). Consequence: mandatory reinstatement plus back pay from the dismissal date — and Spanish courts are increasingly willing to add damages for moral harm. This is the outcome employers genuinely fear.
What is an ERE, and how do collective redundancies work?
Collective redundancies (ERE — Expediente de Regulación de Empleo) trigger when dismissals over 90 days exceed thresholds (10 workers in firms under 100; 10% in firms of 100–300; 30 in firms above 300). The process: a formal consultation period with worker representatives (up to 30 days; 15 in small firms), disclosure of economic documentation, negotiation in good faith over avoiding or mitigating the dismissals, and notification to the labour authority.
Compensation is the objective tariff (20 days/year, 12-month cap) as a floor — but negotiated EREs almost always settle above it, commonly at 30–45 days per year with outplacement, because a defectively-conducted ERE can be declared null by the courts, unwinding every dismissal. The consultation is not a formality; it is the whole process.
The ERTE (temporary suspension or reduction of hours) is the alternative that Spain used at scale during the pandemic and institutionalised in the 2022 reform as the Mecanismo RED: employees are suspended with state benefits and social-security exemptions while the employer preserves the workforce. For firms facing cyclical shocks, it is a genuine substitute for redundancy, and one of the more sophisticated instruments in this series.
Working time, leave, and Spain’s parental-leave revolution
Working time: 40 hours a week maximum on an annual-average basis (with convenios frequently setting lower annual hours), 12 hours’ minimum daily rest, and a hard cap of 80 hours’ overtime per year. Registro horario — daily clock-in and clock-out records for every employee, kept four years — has been mandatory since 2019 and is actively inspected. Spain has been debating a reduction of the statutory week toward 37.5 hours; check the current position.
Leave: 30 calendar days’ paid holiday (about 22 working days) plus 14 public holidays (national, regional and local — Spain’s local fiestas are a real scheduling factor). Permisos retribuidos cover marriage, moving house, medical appointments and family emergencies, with a five-day paid cuidado de familiares leave added in 2023.
Parental leave is Spain’s quiet achievement: 16 weeks fully paid, non-transferable, and identical for each parent (rising to 19 weeks under the 2025 reform, with the additional weeks flexible until the child is eight) — the first fully equal parental-leave system in Europe, paid by social security at 100% of the contribution base. Plus lactancia (nursing leave), reduced-hours rights for childcare until the child is 12, and unpaid excedencia for up to three years with job protection.
How do disputes run — and what should expats document?
The route is fixed: conciliation before the administrative body (SMAC) is compulsory before litigation, and a large share of cases settle there — typically at or near the improcedente tariff. If not, the claim goes to the Juzgado de lo Social, with appeal to the Tribunal Superior de Justicia. The deadline is brutally short: 20 working days from dismissal to file the conciliation claim — miss it and the claim is time-barred, full stop.
Labour inspection (Inspección de Trabajo) enforces the rest: time records, contract types, social-security registration, equality plans (mandatory for employers with 50+ employees, with registered pay audits), and the salary-transparency regime. Fines are real and the inspectorate is active — the enforcement culture is closer to France’s than to the UK’s.
Documentation, as in every chapter of this series: the contract, the applicable convenio, payslips (nóminas — which itemise everything and are the primary evidence of everything), the time records, and any carta you receive. Spanish employment litigation is fast, cheap, tariff-driven and highly predictable — which is precisely why so much of it settles before a judge ever sees it.
Frequently Asked Questions
Can I be fired for poor performance in Spain?
In theory yes (as an objective dismissal for lack of adaptation, or disciplinary if culpable), but in practice performance dismissals are hard to sustain and employers usually take the improcedente route: acknowledge unfairness, pay 33 days per year, and move on. The tariff is the mechanism by which Spain converts an employment-protection question into a pricing question.
What is a finiquito and should I sign it?
The settlement statement at termination (accrued salary, holiday, prorated pagas extra). Signing it is normal — but sign ‘no conforme’ (not in agreement) if you dispute the dismissal itself, because a clean signature can be argued as acceptance. The 20-working-day clock to challenge the dismissal runs regardless of what you signed.
Do I have a right to work from home?
Not automatically. The Remote Work Law (10/2021) governs regular remote work (30%+ of hours over three months): it requires a written agreement, employer provision of equipment, reimbursement of costs, and voluntariness on both sides — but it does not create a right to demand it. Where it applies, though, the cost-reimbursement obligation is real money.
How does the 45-days-per-year rule work?
For employees hired before 12 February 2012, service accrued *up to* that date is compensated at 45 days per year in an unfair dismissal, with service after it at 33 — subject to overall caps. It only matters for very long-tenured staff, but for them it matters enormously: a 25-year employee can be owed the full 24-month cap.
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