Spain’s Constitutional Court is set to review whether the country’s standard compensation for unfair dismissal, 33 days’ salary per year worked, provides fair redress for workers let go without cause. The court announced in early September 2026 that it would take up the issue, putting a spotlight on a rule that has defined Spanish employment since the 2012 labor reform, when compensation was cut from the previous 45 days per year.
The core question is whether a formula based only on salary and years of service makes up for the loss of a job terminated unfairly. For most workers dismissed after February 2012, the law caps compensation at 24 months’ pay, calculated at 33 days per year. Those with earlier service may receive a higher rate for those years, but the formula remains fixed and predictable. Government figures put the average cost of an unfair dismissal for employers at about 8,000 euros.
For objective dismissals, compensation is lower: 20 days per year worked, capped at 12 months’ salary.
Some argue that predictability comes at a price. Legal challenges say the current system overlooks individual hardships, including career setbacks or personal circumstances that can lead to damages beyond a simple calculation. Spanish courts have so far refused to increase compensation based on international conventions alone, holding that legal certainty matters more than wider judicial discretion. Information from El Español, the Constitutional Court is not asking whether compensation should exist, but whether the fixed formula falls short when actual damages are higher.
While the court considers the issue, the rules remain unchanged. Companies can still reinstate a worker or pay the set compensation, and dismissed employees have just 20 working days to challenge a dismissal or claim their rights. The process is strict: the court’s review does not pause deadlines or grant extra payments. Legal experts say the current structure and short appeal windows remain in force during the proceedings.
Extra compensation is possible only in rare cases involving a violation of Fundamental Rights, such as discrimination or retaliation, including union-busting. In those situations, courts may order reinstatement, with back pay or damages for moral or material harm. For most unfair dismissals, but, the fixed formula applies. Workers must gather evidence, keep records and follow strict procedures to contest their employer’s decision.
For anyone facing dismissal, the advice is clear: don’t wait for the Constitutional Court’s decision. Legal deadlines still apply, and the possibility of a higher payout depends on each case and what the court eventually decides. Even if the rules change, only some cases may benefit, and closed cases will not be reopened automatically.
This legal uncertainty echoes other recent changes in Spanish labor protections, including the new protocol for hospitality staff during red alerts, as reported earlier. Both developments show Spain’s labor market reconsidering long-standing rules in response to new social and economic pressures.
The Constitutional Court’s decision could do more than set compensation formulas: it will show whether Spain is ready to adapt its labor laws to reflect the real costs of losing a job. If the court finds the current system lacking, it could open the way to more individualized justice for workers. Otherwise, predictability and legal certainty will remain the priority, leaving many employees with a fixed payout and the sense that the law has not kept pace with today’s workplace realities.
