Objective dismissal and recruitment of new employees in Spain

The Supreme Court, in its ruling of 10 October 2023, considers the dismissal of an employee for economic and organizational reasons to be justified, following the hiring of a new employee who assumed, among other responsibilities, the duties of the dismissed employee.

The Supreme Court's interpretation

The High Court considers that this is a reorganization within the employer's freedom to manage human resources in the company, ruling out the idea of a mere substitution of one employee for another.

According to the Supreme Court, when no significant connection can be established between the new hires and the termination of the employment relations of the dismissal under examination, it is not for the judicial body to make a judgment of opportunity on the company's management, but rather the judgment must focus on the following parameters:

• The legality of the cause justifying the dismissal.
• The reasonable adequacy between the causes and the measure adopted.
• The assessment of possible violations of fundamental rights, or, if applicable, of actions contrary to the principle of good faith.

In this case, the new employee (hired a month and a half before the applicant's dismissal) was assigned coordination functions for different departments. For his part, the dismissed employee had administrative duties, which rules out the notion of an early replacement of one employee by another.

Furthermore, in order to eliminate any hint of discrimination, the company dismissed eight other employees for the same reasons. Finally, the judgment points out that the company is part of a commercial group that was acquired by other companies of the same group before the dismissal, which led to a change in the organizational structure of human resources.

The hiring of employees following dismissals for objective reasons is always problematic, as it can lead to the dismissal being declared unfair. Therefore, prior to both the dismissal and the new hiring, it is necessary to carry out a detailed analysis of the circumstances in each case.