In recent years, severance pay in Spain has been the subject of two important debates, one of which was already settled by the Supreme Court in December 2024 when it denied the possibility of increasing compensation for unfair dismissal via Article 10 of ILO Convention 158 (STS 19/12/2024, appeal no. 2961/2023).

With this ruling dated 16/07/2025, the Social Chamber of the Spanish Supreme Court, in plenary session, resolves the debate raised in this regard but by Article 24 of the Revised European Social Charter (BOE of 11 June 2021), which came into force on 1 July 2021.

The labour experts of BDC Legal’s Spanish partner firm, Belzuz Abogados SLP, have analysed the ruling in detail, and although it is a highly technical ruling with direct reference to the definitions and requirements of conventionality control, they have summarised its reasoning with the following elements

1.    Content of Article 24 of the Revised European Social Charter (ESC).

Firstly, it should be noted that this entire debate arose from the content of the aforementioned regulation, which establishes in Article 24 that in order to guarantee the effective exercise of workers’ right to protection in the event of dismissal, the Parties undertake to recognise, among other things, “the right of workers dismissed without valid reason to adequate compensation or other appropriate redress.”

In the case of Spain, this article has given rise to resolutions by the European Committee of Social Rights (ECSR) and even recommendations by the Committee of Ministers of the Council of Europe, which are cited in the judgment itself.

2.    Adequate compensation. Lack of specific elements to determine the financial amount.

The Supreme Court bases its reasoning on several arguments, the most relevant of which is that Article 24 of the revised ESC does not identify specific elements for setting a financial amount or other content that would remedy “the obvious vagueness of its wording, or its extreme vagueness”.

Therefore, the Supreme Court concludes that it cannot be considered, in any way, as a directly applicable rule superseding the applicability of the provisions of domestic law established by the legislator, such as that contained in Article 56 ET.

3.    Decision of the CEDS, addressed to the powers of the State with legislative capacity.

Secondly, the High Court does not ignore the decisions of the CEDS or the recommendations made to Spain by the aforementioned Committee of Ministers of the Council of Europe. After a thorough analysis, the Supreme Court concludes that these resolutions are not binding on the Supreme Court, but are addressed ‘to the powers of the State with the capacity to establish rules that comply with the aforementioned recommendations”.

4.    Two dissenting opinions. Open debate.

Our Spanish colleagues evidence that this is a decision of the Plenary Session of the Supreme Court, resolving an appeal for the unification of doctrine, and therefore has a direct impact on our legal system and on future judicial decisions.

However, they also point out that the debate is not closed, as this ruling contains two dissenting opinions that disagree with the ruling, especially one of them, signed by two magistrates and highly critical of the ruling. Furthermore, both the European Social Charter and the European Committee of Social Rights, as well as other agents, have called on labour legislators to develop and specify the concept of ‘adequate compensation’. This can also be clearly inferred from the ruling discussed above.

BDC Legal's Spanish Desk in cooperation with our partner firm Belzuz Abogados S.L.P., having extensive experience in advising companies on dismissals, recommend that companies review with their legal teams the impact of this ruling on all ongoing legal proceedings in Spain in which the claim contains a request for an increase in statutory severance pay via the European Social Charter and Articles 8 and 10 of ILO Convention 158.

This article is contributed by Francisco Rodríguez Bermejo (Belzuz Abogados SLP)