Seniority and severance for dismissal, when there have been several contracts during the labor relationship
Companies are considered to have committed malpractice if they calculate a worker’s seniority according to parameters that do not comply with current case law criteria, when the worker has been employed by the same company or group of companies under two or more employment contracts.
In such cases, the Labor Courts or relevant Public Administrations normally conclude that the worker’s seniority is different to the term calculated by the company.
The certainty in specifying the date of commencement of seniority is essential in the majority of the effects resulting from a labor relationship.
In cases of severance compensation for dismissal, it is crucial. Accordingly, if a company applies seniority that does not coincide with the actual commencement of the labor relationship, dismissals on objective grounds and collective dismissals will be deemed as unjustified, except in the case of excusable error, even when the alleged grounds exist. In the case of disciplinary dismissal, if the grounds for dismissal are not admitted, the severance compensation is higher than the specified amount.
Therefore, it is absolutely necessary to apply criteria that provide legal certainty with respect to the calculation of a worker’s seniority. In doing so, the reference to the lapse of time of 20 business days between contracts should be disregarded, as case law considers that the determining criterion lies in whether or not the essential unity of the labor link has been maintained, irrespective of the time that transpires between successive contracts and also the receipt of final settlements between the different contracts signed. In addition, no offsetting whatsoever is allowed of settlements paid for successive temporary contracts declared fraudulent.
Garrigues Labor and Employment Law Department