In Spain, job cuts for business reasons take two forms. An objective dismissal (despido objetivo) ends individual jobs for economic, technical, organisational or production grounds, requiring written notice and statutory compensation of 20 days' salary per year of service (capped). A collective dismissal (despido colectivo / ERE) applies when the number of dismissals over a period exceeds set thresholds, and requires a formal consultation period with workers' representatives before it can proceed. A related measure, the ERTE, is a temporary suspension or reduction of work (not a dismissal) used in downturns. Crucially, if the employer's grounds aren't genuine or the procedure is botched, the dismissal becomes unfair (improcedente) — raising your compensation to 33/45 days per year — and you have only 20 working days to challenge. ERE settlements are often negotiated above the legal minimum. We advise affected employees in English.
Redundancy in Spanish Terms
If you come from the UK, Ireland or another common-law country, you'll think of "redundancy" as a defined concept with statutory redundancy pay. Spain doesn't use that exact framework. Instead, losing your job because the business needs to cut roles is handled through dismissal for objective/business reasons — either individually (objective dismissal) or collectively (an ERE) depending on the scale. The compensation and procedure flow from those mechanisms rather than from a standalone "redundancy" right.
This matters because it changes what you should expect and check. The employer can't simply declare you "redundant" and pay a fixed redundancy figure — they must establish genuine economic, technical, organisational or production grounds, follow the correct procedure for the scale of cuts, and pay the right statutory compensation. And because these requirements are demanding, employers frequently get them wrong, which converts the dismissal into an unfair (improcedente) one with higher compensation. So a Spanish "redundancy" is really a regulated business dismissal, and whether it was done properly is very much open to scrutiny — which is the employee's opportunity.
Objective, Collective & ERTE
Three distinct measures often get lumped together but are very different:
| Measure | What it is |
|---|---|
| Objective dismissal | Individual dismissal(s) for economic/technical/organisational/production reasons (or capability). 20 days/year compensation. |
| Collective dismissal (ERE) | Dismissals above set thresholds over a period — requires a consultation period with worker representatives. |
| ERTE | Temporary suspension or reduction of work/hours — not a dismissal; you keep your job, often on reduced pay with benefit support. |
The vital distinction is that an ERTE is not a dismissal — it's a temporary measure that suspends or reduces work (you remain employed, typically receiving unemployment-type benefit for the affected hours, and return when conditions improve). It became widely known during the pandemic. An ERE, by contrast, is a permanent collective dismissal. Confusing the two can lead employees to misunderstand their situation entirely. Whether your situation is an objective dismissal, an ERE, or an ERTE determines your rights, your compensation (if any), and what you should do — so the first step is identifying which one you're actually facing.
Objective Dismissal
The objective dismissal (despido objetivo) is how individual jobs are cut for business reasons. To be valid, the employer must:
- Have genuine grounds — real economic (losses or falling revenue), technical, organisational or production reasons (or, separately, capability/incapacity grounds), properly evidenced.
- Give written notice — a dismissal letter (carta) setting out the specific cause, with the required notice period.
- Pay the statutory compensation — generally 20 days' salary per year of service, capped, made available at the time of the dismissal.
The employer must do all of this correctly. If the economic grounds don't genuinely exist or aren't properly evidenced, if the letter is inadequate (insufficient explanation of the cause), or if the notice or compensation requirements are breached, the dismissal is liable to be declared unfair (improcedente) — which raises your compensation from 20 days/year to the 33/45-day unfair-dismissal rates. This is the crux for an affected employee: the 20-day "redundancy" figure an employer offers is only correct if the dismissal was genuinely valid and properly done, and it very often wasn't. That gap — between the 20-day amount and the 33/45-day amount — is exactly what makes it worth having an objective dismissal reviewed rather than simply accepting it.
The 20-day figure isn't always the final figure
An objective dismissal carries 20 days' pay per year — but only if the grounds were genuine and the procedure correct. If they weren't (which is common), the dismissal is unfair, raising you to 33/45 days. So an employer's "redundancy" offer is frequently a floor, not a ceiling — worth checking before you accept.
The Collective Dismissal (ERE)
When a business cuts jobs at scale, it crosses into collective dismissal (despido colectivo) territory — commonly called an ERE (Expediente de Regulación de Empleo). This is triggered when the number of dismissals for business reasons over a defined period exceeds set thresholds relative to the workforce size. An ERE can't just be imposed: the employer must open a formal consultation period (periodo de consultas) with the workers' legal representatives, negotiating in good faith over the cuts, the criteria for selection, and the terms (including compensation and any measures to soften the impact).
For affected employees, several things follow. The consultation often produces an agreement that improves on the statutory minimum — collective negotiations frequently secure compensation above the baseline 20 days/year, plus measures like redeployment, early-retirement terms or outplacement, because the workers' representatives have bargaining leverage. At the same time, an ERE that fails to follow the required procedure, lacks genuine grounds, or applies unfair selection criteria can be challenged (collectively or individually), and a successful challenge can render the dismissals unfair or even void. So while an ERE is a serious, large-scale event, it's also one where employees often do better than the legal floor through negotiation — and where procedural failures by the employer create grounds to contest. Understanding the agreement on the table, and whether your individual selection and terms are correct, is where advice helps.
ERTE (Temporary)
An ERTE (Expediente de Regulación Temporal de Empleo) is fundamentally different and often misunderstood: it is a temporary suspension of contracts or reduction of working hours, not a dismissal. Your employment continues; for the suspended hours you typically receive an unemployment-type benefit, and you return to normal work when the temporary cause (an economic downturn, a force-majeure event) passes. It's a tool to help businesses weather short-term difficulty without permanently shedding staff, and it came to prominence during the COVID period.
Because you keep your job, an ERTE is generally far less serious for an employee than a dismissal — but there are still things to watch. The ERTE must be genuinely temporary and properly justified; it has rules about how it's implemented and your protections during it (including, in some regimes, restrictions on the employer dismissing you for the same reasons during or shortly after the ERTE). If an "ERTE" is being used as cover for what is really a permanent reduction, or if your rights during it aren't being respected, that's worth examining. The key reassurance is that an ERTE is not the end of your job — but if your employer later tries to convert it into dismissals, or breaches the ERTE rules, the situation changes and the dismissal/objective-dismissal protections come back into play.
Your Rights & Compensation
What you're entitled to depends on which measure applies:
- Objective dismissal (valid): 20 days' salary per year of service (capped), plus your finiquito (earned salary, holiday, prorated extras), plus the required notice.
- Objective dismissal found unfair: the higher 33 days/year (45 for pre-2012 service), capped — significantly more than 20 days.
- Collective dismissal (ERE): at least the statutory minimum, but often more under the negotiated agreement, sometimes with additional measures.
- ERTE: no dismissal compensation (you keep your job); benefit support for suspended hours during the measure.
Two further rights matter on any business dismissal. First, you should generally qualify for unemployment benefit (paro) afterwards, since the job loss isn't your choice — an important difference from resigning. Second, the selection of who is dismissed can itself be challenged: if you were chosen on improper grounds (for example something that amounts to discrimination, or in breach of agreed criteria), that can make your dismissal unfair or null. So beyond the headline compensation, it's worth checking both that the figure is right and that you were lawfully selected. For long-serving or higher-paid employees especially, the difference between the 20-day offer and a successful unfair-dismissal outcome can be substantial.
Challenging It
If you're cut in an objective dismissal or ERE, you can challenge it — and the same short deadline applies as for any dismissal: 20 working days from the dismissal, protected by filing a conciliation request. The grounds for challenge typically include:
The grounds aren't genuine
The claimed economic/organisational reasons don't really exist or aren't properly evidenced.
Procedural defects
Inadequate dismissal letter, missing notice, compensation not properly made available, or (for an ERE) a flawed consultation.
Improper selection
You were chosen on discriminatory or otherwise unlawful grounds, or in breach of agreed criteria.
Outcome
A successful challenge can mean an unfair (33/45-day) or null (reinstatement) finding, or a better settlement.
Because objective dismissals and EREs have so many requirements, the scope for a successful challenge is real — many are found unfair on grounds that the economic justification was thin or the procedure defective. Even where the dismissal is fundamentally valid, identifying procedural or selection weaknesses creates leverage to negotiate a better exit. As always, the decisive factor is the 20-day deadline: the time to assess and protect your position is immediately, not after you've accepted a payment and the window has closed. We review the grounds, procedure and your individual selection quickly so you know whether challenging is worthwhile.
How We Help
We act for expat employees facing redundancy-type dismissals in Spain. We work out which measure you're actually facing (objective dismissal, ERE or ERTE), check whether the employer's grounds are genuine and the procedure correct, and verify your compensation and finiquito — flagging where the 20-day offer should really be the higher 33/45-day unfair-dismissal figure. We assess whether your selection was lawful, protect the 20-day deadline, and negotiate a better exit or challenge the dismissal through conciliation and the labour court. For an ERE, we review the collective agreement and your individual terms within it. It's all in plain English on a clear quote, part of our employment law service. Book a consultation quickly.
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Frequently Asked Questions
Not as an identical concept. Spain handles job cuts for business reasons through dismissal for objective/business grounds — individually (objective dismissal) or collectively (an ERE) depending on scale — rather than a standalone statutory redundancy right. The compensation and procedure flow from those mechanisms. The employer can't just declare you redundant; they must prove genuine economic/organisational grounds and follow the correct process, or the dismissal becomes unfair.
An ERE (Expediente de Regulación de Empleo) is a collective dismissal — when dismissals for business reasons over a period exceed set thresholds relative to the workforce. The employer must open a formal consultation period with workers' representatives, negotiating the cuts, selection criteria and terms. The consultation often secures compensation above the statutory minimum, and an ERE that fails to follow the procedure or lacks genuine grounds can be challenged.
An ERE is a permanent collective dismissal — you lose your job. An ERTE (Expediente de Regulación Temporal de Empleo) is a temporary suspension or reduction of work/hours — not a dismissal; you keep your job, typically receive benefit for the affected hours, and return when the temporary cause passes. It became widely known during the pandemic. Confusing the two leads to misunderstanding your situation entirely, so identifying which you face is the first step.
A valid objective dismissal carries 20 days' salary per year of service, capped, plus your finiquito and the required notice. But the 20-day figure only applies if the grounds were genuine and the procedure correct. If the economic grounds don't really exist, the letter is inadequate, or notice/compensation rules are breached, the dismissal is unfair and your compensation rises to 33 days/year (45 for pre-2012 service). So the 20-day offer is often a floor, not a ceiling.
Yes, within 20 working days of the dismissal (protected by filing a conciliation request). Grounds include that the economic/organisational reasons aren't genuine or evidenced, procedural defects (inadequate letter, missing notice, compensation not properly available, or a flawed ERE consultation), or improper/discriminatory selection. Because these dismissals have many requirements, many are found unfair — raising compensation to 33/45 days — or provide leverage for a better settlement.
Generally yes. Because a business dismissal (objective or ERE) isn't your choice, you should normally qualify for unemployment benefit (paro), subject to the usual contribution requirements — an important difference from resigning, which can affect or forfeit that entitlement. During an ERTE you also receive benefit support for the suspended hours while keeping your job. Confirming your benefit position is part of understanding the full picture when your role is cut.
Yes, and the selection itself can be challenged. If you were chosen on improper grounds — something amounting to discrimination, or in breach of the criteria agreed in an ERE consultation — that can render your dismissal unfair or even null. So beyond checking the compensation figure, it's worth examining whether you were lawfully selected. Improper selection is a recognised basis for contesting a business dismissal.
No — an ERTE is a temporary measure, not a dismissal, so your employment continues and you return to normal work when the temporary cause passes. But it must be genuinely temporary and properly justified, with rules on implementation and your protections during it (including, in some regimes, limits on dismissing you for the same reasons during or shortly after). If an ERTE is used as cover for permanent cuts, or your rights during it are breached, the dismissal protections come back into play.