Legal News – Labour Law Department – February 2025
The Social Division of the Supreme Court (“SC“) has deliberated in plenary session on the issue set out in this November 2024 issue of Actualidad Jurídica Laboral; thus, in its recent Plenary Ruling no. 1250/2024 of 18 November 2024, the SC rectifies the criterio maintained to date and establishes a new and important doctrine in the field of disciplinary dismissal in Spain.
As a result of this ruling, companies are obliged to offer all workers a prior hearing before terminating their employment contract due to disciplinary dismissal. This change is based on Article 7 of Convention No. 158 of the International Labour Organisation (“ILO“), ratified by Spain in 1985, which is considered to be a directly applicable rule in our legal system.
I. MANDATORY PRIOR HEARING
Article 7 of ILO Convention No. 158 provides as follows:
“An employee’s employment shall not be terminated on grounds relating to his or her conduct or performance before he or she has been given an opportunity to defend himself or herself against the charges against him or her, unless the employer cannot reasonably be required to give him or her such an opportunity”.
The SC interprets this provision as sufficiently clear and concrete for its direct application in Spanish domestic law, without the need for additional regulatory development. Therefore, the prior hearing becomes a mandatory requirement in all disciplinary dismissals.
The procedure consists of informing workers of the charges against them and giving them the opportunity to defend themselves before the dismissal decision is taken and communicated.
This procedure does not require complex formalities or the opening of a contradictory file, and it is sufficient that the employer can prove that the worker had a real opportunity to be heard.
The SC emphasises that this prior hearing cannot be substituted by other subsequent defence mechanisms, such as prior conciliation or judicial challenge of the dismissal.
II. RATIONALE FOR DOCTRINAL CHANGE
The SC bases this change on a normative and jurisprudential evolution that reinforces the prevalence of international treaties in the Spanish legal system. Among the elements highlighted by the Chamber, among others, are:
- International Treaties Act 2014: Strengthens the hierarchy and applicability of international treaties over domestic norms.
- Control of conventionality: Allows for the displacement of domestic provisions that are contrary to ratified international norms.
- Regulatory developments: such as the elimination of processing wages in cases of unfair dismissal and the elimination of null dismissal due to formal defects.
This context justifies the introduction of this new obligation as an essential guarantee for workers’ rights of defence.
III. TEMPORAL IMPACT AND EXCEPTIONS
The SC establishes that this new doctrine has no retroactive effect. In the specific case in question, the company acted in accordance with the doctrine previously in force, so it cannot be accused of not having a prior hearing.
However, in any disciplinary dismissal carried out after the publication of this Judgment, i.e. from 19 November 2024, this procedure must be complied with, unless there are exceptional circumstances that make it reasonably impossible to comply with it.
The wording of Article 7 of Convention No. 158 provides for an exception in cases where the employer cannot reasonably be required to provide such a prior hearing (“unless the employer cannot reasonably be required to grant it”). However, the SC warns that these exceptions must be subject to rigorous analysis and cannot be invoked in an arbitrary or generalised manner.
IV. IMPLICATIONS FOR BUSINESS
This ruling introduces a new obligation for companies to integrate into their internal disciplinary dismissal procedures, with some effects and implications that could arise, which could include the following:
- Include in the protocol for disciplinary dismissal the prior hearing Henceforth, it will be imperative that employers (i) inform the worker of the charges against him/her in a clear, detailed and understandable manner; and (ii) provide the worker with the opportunity to be heard before making and communicating the decision to dismiss. In addition, it is advisable to have reliable proof that this obligation to offer the employee the possibility to defend himself/herself has been complied with. For example, among other possibilities: a witness statement, in which a worker can corroborate that the prior hearing was carried out; accrediting minutes, documenting compliance with the prior hearing, including the allegations presented by the worker concerned. These measures will ensure formal compliance and avoid potential legal disputes arising from this obligation.
- Effects in the event of non-compliance shall be, at the very least, the unfairness of the dismissal Failure to comply with this procedure, unless the exception foreseen in the rule is alleged and successful (which will be highly exceptional), will imply, at least, the declaration of unfair dismissal due to the lack of compliance with the formal requirements. This will entail the corresponding legal and economic consequences, including compensation and liabilities associated with unfair dismissal. It could even happen, as has already been determined in some decisions, that the non-observance of this requirement results in the worker’s right to compensation for non-compliance with an obligation, by virtue of article 1101 of the Civil Code. This would mean that the worker would be entitled to be compensated for the damages caused by the omission of this procedure. In particular, if the dismissal is subsequently declared unfair for reasons that the worker alleged in the trial, but could have raised during the previous hearing, a compensable damage could be established. This compensation could include compensation in addition to that for unfair dismissal, even covering the wages lost from the time of dismissal until the time of the trial, when the worker was finally able to give reasons for his opposition. Not forgetting that there are cases in which the dismissal could be declared null and void, provided that a violation of fundamental rights is proven. In any case, it will be necessary to analyse each specific case and to pay attention to future case law decisions that may be handed down in relation to dismissals without a prior hearing. This will help to clarify the scope and implications of this obligation, as well as to guide the actions of employers and workers in similar cases.
- Subsequent rectification possible in case of omission due to error In the event of non-compliance with the prior hearing procedure, the applicability of Article 55.2 of the Workers’ Statute, which allows formal defects in the disciplinary dismissal to be rectified within a period of 20 days, could be interpreted by analogy. This provision authorises the employer to reiterate the communication of the dismissal, complying with the formal requirements omitted, maintaining the worker in employment and paying the wages corresponding to the intervening period. Although the Judgment does not expressly pronounce on this possibility, this article could be considered as a “safeguard” tool that would make it possible to correct the formal defect. However, the most advisable thing to do is to guarantee initial compliance with the prior hearing, minimising the legal risks and ensuring the validity of the termination measure from the outset. On the other hand, in relation to the above, although it is not a correction as such, it is worth highlighting the provisions of article 110.4 of the Law Regulating Social Jurisdiction which establishes that, in cases in which a dismissal is declared unfair due to non-compliance with the formal requirements and it has been decided to reinstate the worker, the employer may proceed with a new dismissal within seven days of the notification of the judgement. As we said, this new dismissal is not considered to be a correction of the original dismissal, but an autonomous act of termination, the effects of which will commence from the date on which it is carried out. Although this rule does not establish a rectification in the strict sense, it does provide a legal tool that allows the employer to rectify situations of unfairness derived from formal defects in the initial dismissal and which could be used in this case.
- Possible fraudulent conduct by the worker in the face of imminent dismissal The ruling does not resolve the consequences with regard to the classification of the dismissal if a situation arises in which the worker seeks to protect himself, given that the prior hearing procedure could generate situations of fraud of law, especially in those cases in which the worker, upon learning of the charges brought and foreseeing the imminence of dismissal, decides to take a reduction in working hours for legal guardianship, take leave for temporary incapacity or other measures that hinder or delay the effectiveness of the termination of the contract. This could compromise not only business operations, but also the very purpose of the prior hearing as a procedural guarantee. In this situation, the company will be able to argue with some solvency that the reason for the dismissal is neither the employee’s sick leave nor the reduction in working hours. With regard to objective nullity, it would be desirable that the courts do not apply the aforementioned legal protection to those who, despite having a legitimate situation, reduce their working hours during the hearing process, with the sole aim of protecting themselves and not of reconciling family life.
V. CONCLUDING REMARKS
Following this ruling, it is crucial that companies review and, where necessary, adjust their internal dismissal procedures to comply with this new requirement. Until now, this obligation only applied to workers’ representatives, trade union members or when it was provided for in collective agreements.
The adequacy of these procedures will not only help to avoid potential litigation, but will also facilitate a more efficient and fairer management of dismissals. Given that each case is unique, a detailed and specific analysis will be essential to ensure compliance with this requirement and to minimise the legal contingencies that may arise.
On the other hand, a possible increase in litigation is foreseeable, since, although the Supreme Court points out that no special procedure is required to comply with this obligation, we consider that this generic reference could generate problems. In particular, the dismissed worker could argue that the decision was already taken beforehand, turning the hearing into a mere formal procedure, with no real opportunity to refute or disprove the allegations made.
Furthermore, the exception to this obligation shall be determined by the specific circumstances of each case which make it possible to justify that the employer was not in a position to grant such a hearing. However, in no case will it be valid for the employer to invoke such impossibility merely for the purpose of avoiding compliance with this obligation. This implies a careful assessment of the specific case to ensure that the reasons given are legitimate and not used as a strategy to avoid giving the employee a hearing.
In conclusion, this new requirement seems reasonable from the employee’s perspective, as it gives the employee the opportunity to be heard by his or her employer on the facts before final decisions are taken, thus promoting greater balance and fairness. However, as it is not clearly specified what this prior hearing would consist of, it is likely to create difficulties for companies in implementing disciplinary dismissals in certain cases, which could lead to increased litigation for the reasons given.
