The right of temporary workers to receive severance payments has always been a cloudy issue. Now the European Court of Justice (ECJ) has cast a huge blow against the attractiveness of Spain as a location for job growth – and also raised doubts about the legitimacy of laws in other EU countries that deny temporary workers severance pay.
In its ruling C-596/14 of 14 September 2016, the ECJ declared Spanish legislation on the handling of severance pay for temporary replacement workers illegal on the grounds that it infringes Directive 1999/70 concerning the framework agreement on fixed-term work concluded by the ‘European Social Partners’. The court found that Spanish legislation discriminates against temporary replacement workers by denying them the same amount of severance pay that permanent workers receive when their contracts are terminated. It therefore requires the Spanish courts to grant temporary replacement workers the same compensation as is provided in the case of dismissal for objective reasons – which amounts to 20 days’ pay for each year of service.