Cause and form are equally important.

If you are in any way involved in labour law, labour relations or human resources, chances are you have heard that phrase on more than one occasion.

When a company decides to dismiss an employee, it is because there is a cause for dismissal. A different matter will be whether or not that cause has a basis in law. In many cases, decisions taken by companies do not meet regulatory requirements. The existence or non-existence of genuine cause is one of the aspects that will most likely determine the outcome of a dismissal in the event that it is brought to court.

However, the grounds for terminating a contract are not the only factor that can influence the outcome of a dismissal proceeding. It is not uncommon for a court judgement to declare a dismissal unfair due to the existence of a formal defect in the way in which the dismissal was carried out.

By formal defects we refer, inter alia, to cases in which, in the context of a disciplinary dismissal, the employee has not been given the opportunity to make representations as expressly provided for in the applicable collective bargaining agreement or because the dismissed person acts as the workers’ legal representative. Another good example of a formal defect is the failure to provide the worker with the legally stipulated compensation for objective dismissals when delivering the notice of termination, or having done so in an amount substantially lower than appropriate.

In these cases, the question that may arise is whether the employer can do anything when a dismissal has been ruled unlawful by the courts due to a formal defect.

The legal remedy for the formal defect

The answer can be found in article 110(4) of the Spanish Act on the Regulation of the Social Jurisdiction (with initials in Spanish “LRJS”), which stipulates that when a dismissal is ruled unfair due to failure to comply with the formal requirements, and reinstatement has been chosen, a new dismissal may be carried out within 7 days of notification of the judgement. In this case, this is a new dismissal effective from the date on which it took place.

We should mention that this provision is only applicable to disciplinary dismissals, as stated in Judgement No. 856/2021 of the Spanish Supreme Court of 7 September 2021. This is because the statute of limitations applicable to disciplinary dismissals does not apply to objective dismissals and because, in addition, the objective causes that justified the first dismissal may have changed since then and as of the date of the judgement.

However, the aforementioned ruling states that, despite the fact that the aforementioned article 110(4) of the LRJS does not apply to objective dismissals, the employer may always carry out a second objective dismissal at any time, and after reinstatement of the worker, provided, of course, that the objective causes continue to exist (or new ones have arisen), and without this giving rise to res judicata in respect of the second dismissal.

But what if a disciplinary dismissal is found to be objectively null and void on the grounds of formal defects? And what if a formal defect would render the termination null and void by virtue of a collective bargaining agreement? Could Article 110(4) of the LRJS be applied despite the fact that it only refers to dismissals classified as unfair?

The answer to this question is yes. At least if we take into account the views of some High Courts of Justice, which have ruled that the application of Article 110(4) of the LRJS is valid in cases of invalidity, arguing that the spirit of the provision is to remedy any defects of form that are unrelated to any of the substantive issues that may arise in the process.

Another possible question that could arise is whether the term of 7 days granted by the aforementioned Article 110(4) of the LRJS refers to business days or calendar days. This was also addressed, inter alia, in Judgment no. 751/2019 of the Spanish Supreme Court of 5 November 2019, which stated that this period is to be understood in terms of business days for all purposes.

In short, both the cause and the form are as important when it comes to dismissals, although the law is somewhat more forgiving when the outcome of a court case is determined by a formal defect, granting the employer a second chance to comply with all the legal requirements, subject to the limitations and reservations mentioned above.