The High Court of Justice of Catalonia raises the compensation for unfair dismissal

The judgement of the Social Chamber, fourth section, of the High Court of Justice  of Catalonia, of 30^th  January 2023, ordered the company to pay the employee a compensation of 3,493.30 euros corresponding to 48 days per year worked, as opposed to the 941.78 euros corresponding to the legal compensation of 33 days per year.

Summary of the case:

The Court thus ruled on the appeal brought by an employee who was dismissed by the company four months after she joined the company. The company notified the employee of the objective dismissal, alleging productive and economic reasons, based on the suspension of services caused by the coronavirus crisis. The company recognized the unfairness of the dismissal, thus paying the employee the maximum legal compensation of 33 days.

Grounds:

The magistrates base their decision on the following points:

• They rely on the ILO (International Labour Organization) Convention 158 and the European Social Charter, which states that the compensation must be high enough to dissuade the company from dismissing.

• They support the company's decision to dismiss the employee, however, they consider that the statutory severance pay is clearly insignificant, and does not compensate for the damage caused by the loss of the job.

• They contemplate that the exercise of the right to dismiss was carried out in an abusive manner, based on the minimal cost of dismissing the employee due to her limited seniority in the company. Furthermore, the company initiated a RTER (Record of Temporary Employment Regulation) a few days later, without having included the worker, who, in addition to having been able to keep her job, could have benefited from unemployment benefits, since at the time of the dismissal, the worker did not have sufficient contributions to access them. 

• The Court admits that the dismissal "was not acausal", as there were economic and productive causes, but considers them to be merely circumstantial.

In short, the High Court of Justice of Catalonia concludes that, when the legal compensation is considerably insufficient, a higher compensation may be set to compensate for the total damages that the unfair dismissal may have caused. This decision generates a debate on the sufficiency of the compensation regime, which may lead to a possible tightening of the compensation regime.

Likewise, the Court insists that this decision cannot be extended to all cases, and states that it will be up to the Supreme Court to unify the doctrine.