The Supreme Court refuses to extend the compensation for unfair dismissal set forth in Article 56.1 of our Workers’ Statute: “When the dismissal is declared unfair, the employer, within five days of notification of the judgment, may choose between reinstatement of the employee or payment of compensation equivalent to thirty-three days’ salary per year of service, prorated by months for periods of time of less than one year, up to a maximum of twenty-four monthly payments. The option for the indemnity will determine the termination of the employment contract, which will be understood to have occurred on the date of the effective termination of the employment”.
The Supreme Court, in a ruling handed down by the Social Chamber on July 16, 2025 (STS 735/2025, of July 16, 2025), has confirmed that it is not possible to recognize a higher severance payment for dismissal than that provided by law when the dismissal is declared unfair. Except in the cases expressly regulated by the legislator. The decision dismisses the appeal for the unification of doctrine filed by an employee who claimed additional compensation for the economic damages derived from the dismissal.
Can severance pay be increased if there are additional damages?
The issue revolved around whether a judge can recognize a complementary indemnity to that set forth in Article 56.1 of the Workers’ Statute, when the affected party considers that this does not adequately cover the damage suffered.
The worker invoked ILO Convention 158, Article 10, as a basis:
“If the bodies referred to in Article 8 of this Convention come to the conclusion that the termination of the employment relationship is unjustified and if under national law and practice they are not empowered or do not consider it possible, in the circumstances, to annul the termination and possibly order or 1 propose the reinstatement of the worker, they shall have the power to order the payment of adequate compensation or such other relief as may be considered appropriate.”
And, Article 24 of the Revised European Social Charter:
“In order to ensure the effective exercise of the right of workers to protection in the event of dismissal, the Parties undertake to recognize: a the right of all workers not to be dismissed without valid reasons relating to their skills or conduct, or based on the operational requirements of the undertaking, establishment or service; b the right of workers dismissed without valid reason to adequate compensation or other appropriate redress. To this end, the Parties undertake to ensure that a worker who considers that he has been dismissed without valid reason has the right to appeal to an impartial body”.
These are rules that require adequate compensation for unjustified dismissals.
The judgment clarifies that the compensation for unfair dismissal is already determined by the Spanish legal system. And that it complies with international standards for the following reasons:
– ILO Convention 158 and the European Social Charter are not directly applicable and require internal legislative development.
– Spanish legislation already offers a uniform and predictable legal response, which respects the margin of configuration granted to the legislator by the Constitution.
– The recommendations of the European Committee of Social Rights or the Council of Europe are not binding. Therefore, they cannot justify a judicial modification of the current compensation system.
Therefore, severance pay would be a closed system with some exceptions.
The Supreme Court reaffirms that compensation for unfair dismissal is limited to the provisions of Article 56.1 of the ET, except when there are violations of fundamental rights or other cases expressly provided for by law.
This doctrine had already been upheld in previous rulings, such as STS 1350/2024. 2 Therefore, judges are limited to awarding additional compensation for reasons of unfair dismissal.
The Labor Court insists that the judge cannot fix a severance payment different from the legal severance payment by direct application of international norms, unless there is an enabling domestic norm.
This ruling consolidates the current legal security framework and limits the scope of the control of conventionality in the labor field, ensuring that dismissal disputes are resolved in accordance with the provisions of the national legislation.
Sheila Quiroz Sifuentes
Lawyer Expert in Civil and Administrative Law
Martínez & Caballero Abogados
