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It is possible that, a few days or even hours ago, your employer has unfairly dismissed you. Or, perhaps you are still working, but you know that this may happen in a short time. If you are in any of these situations, it is advisable to know how to calculate your severance pay.
How is compensation for unfair dismissal calculated?
Before explaining exactly where the amount of compensation for unfair dismissal comes from, we have to explain a series of very important concepts. Let's take a look at them.
What is unfair dismissal?
The first thing you should know is that a dismissal is only unfair if the employer who carries it out does not comply with the established legal requirements. These are set out in the Workers' Statute and, optionally, in the collective agreement to which the business and the worker are subject.
We are talking, for example, about the obligation to give the worker 15 days' notice, to grant the worker the established number of hours to look for a new job, etc. The same applies if the dismissal is for objective reasons and the employee is not able to prove that there is a real reason for his or her decision.
It should be remembered that only a judge, after a prior challenge in the corresponding Social Court, can determine that the dismissal is unfair. If this is the case, the judge will be obliged to reinstate the worker or, failing that, to pay him/her the compensation provided for by law, which we will discuss a little later.
What is the difference between severance pay and termination?
Some people confuse the two concepts, but they are not synonymous. In this sense, severance pay is an economic amount that the employer must pay to the worker after dismissal in order to compensate him/her for the time he/she has spent working for the company. There are situations in which it is not obligatory to pay it, such as in the case of dismissal for disciplinary reasons or when the employee requests voluntary redundancy.
On the other hand, the employer has to pay the worker the corresponding severance pay regardless of the reason for the termination of the employment relationship. This is mainly due to the fact that it is made up of a series of amounts that the company owes the employee at the time of termination. We are talking about:
- The days of salary for the current month that have not yet been paid.
- The proportional parts of the extraordinary payments.
- The days of holidays not taken.
- Per diems or any other concept to which the worker is entitled and which was not included in the previous pay slips.
When all these concepts are settled, the contractual relationship is terminated. This is the reason why the severance pay is always paid on the last day of the contract or, failing that, just after. In fact, it is usually paid together with the severance pay, which is why the confusion mentioned above arises.
What are the consequences of unfair dismissal?
When a judge considers that the dismissal has not been carried out in accordance with the law and declares it unfair, he or she gives the employer two alternatives. The first is to reinstate the worker within a maximum period of 5 calendar days following the issuance of the ruling.
The other is to pay the worker the corresponding compensation. In both cases, however, the worker will have to pay the processing wages, which are those corresponding to all the wages that should have been paid between the date on which the dismissal came into effect and the day on which the decision was made official.
In practice, most employers opt for the second option, i.e. to pay the compensation for unfair dismissal.
How much do you get for unfair dismissal?
It will depend on how long you have been working for the company. In this regard, the law makes two distinctions:
- Period prior to 12 February 2012. 45 days per year worked with a maximum of 42 monthly payments.
- Period after 12 February 2012. 33 days per year worked with a limit of 24 monthly payments.
If the period worked up to 12 February 2012 exceeds 24 monthly payments, you will not receive any compensation for what you worked after that date. On the other hand, if this is not the case, it will be completed up to those 2 years of salary.
On the other hand, if the start date of the contract is after that date, the limit will always be set at 24 months' salary.
However, the indemnity is calculated on the basis of the gross annual salary, not the net salary. It is, however, an income exempt from IRPF. Nor is it subject to social security contributions. In other words, it is not the same as the settlement for unfair dismissal or any other type of dismissal, which is subject to both types of taxation.
In any case, one of the best pieces of advice we can give you is to use a severance pay calculator. This will help you to know exactly how much you are entitled to receive. If your employer does not offer you a suitable proposal afterwards, contact an employment lawyer. He or she will offer you the best advice on how to make your claim and preserve your rights.
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