Foreign employees relocated to A Coruña, dismissal, residence permit and tax

An engineer who arrived in A Coruña with an EU Blue Card a year and a half ago and is then dismissed does not have to pack. The card can only be withdrawn after more than three months without a highly qualified job, and even then there are three months to find one, six if the card has been held for at least two years. That period runs at the same time as the twenty working days to challenge the dismissal, and almost every decision is made in the first few weeks.

We advise people from other countries whom companies in A Coruña and Arteixo bring over to work in design, technology, logistics or management, in English. We are Ana María Reza Cortiñas, member no. 6064, and Luis Jurado Cano, member no. 6317, of the A Coruña Bar Association and partners at Perseus & RC Abogados. What follows is what changes in a dismissal when the employee has come from abroad.

Spanish law governs your dismissal

If you habitually work in Spain, your contract cannot deprive you of the protection of the Spanish rules that cannot be contracted out of, even if it says it is governed by another country’s law. That is article 8 of the Rome I Regulation, and those rules include dismissal, with thirty-three days’ pay per year of service if it is unfair. You can sue your employer before the courts of the place where you work, and if you work in A Coruña or Arteixo that means the A Coruña employment courts.

The deadline is twenty working days from the day after the dismissal, not counting Saturdays, Sundays or public holidays, and the dismissal calculator gives you the exact date using the calendar of the court’s town. If you have been handed a letter in Spanish that you do not fully understand, do not sign anything as agreed until we have seen it.

Your residence permit

EU citizens need no permit to work or live in Spain. If you are dismissed and register as a job seeker, you keep your worker status, with no time limit if you had worked for more than a year and for at least six months if you had worked for less.

With an EU Blue Card, the card can be withdrawn or not renewed if you spend more than three months without a highly qualified job, or more than six if you have held it for two years or more, and even then you are given three or six months to look for new work. With the national permit for highly qualified professionals or an ordinary work permit, what happens depends on the type of permit and how long it has left to run, and it is worth checking with the card in front of us before agreeing a leaving date. Your family’s permits usually depend on yours, so the same review covers everyone.

Severance and tax

If you pay Spanish income tax like any resident, the statutory severance is tax-exempt up to 180,000 euros when the unfairness is recognised at conciliation or in a judgment. If you opted for the special regime for workers relocated to Spain, known as the Beckham law, that exemption does not apply, because article 93.2 of the Income Tax Act excludes the exemptions of the Non-Resident Income Tax. Severance is then taxed together with your other employment income at 24 %, and at 47 % above 600,000 euros.

Depending on the amount either position may cost more, and the leaving date matters too, because it decides the year in which you are paid and where you are tax resident that year. We review this with your tax adviser before the agreement is closed, not afterwards.

Relocation, housing and unemployment benefit

Contracts for relocated employees often include help with moving, housing, schooling or language, and sometimes a clause requiring repayment if the relationship ends early. The retention agreement in the Workers’ Statute, which can require you to stay up to two years when the employer has paid for specialist training, only obliges you to compensate the employer if it is you who leaves early, not if the employer dismisses you. Other clauses are read with the contract in front of us, as is the date by which you must leave employer-paid housing.

If you are legally resident and have contributed for the minimum period, you are entitled to unemployment benefit on the same terms as a Spanish worker, provided you leave through a dismissal and not by resigning or by mutual agreement. If your role was a management one, the dismissal of executives page covers bonuses, shares and non-compete clauses.

Where we are

Rúa Torreiro 13, 3.º C, 15001 A Coruña. We work in English, in person or by video call, and you can call or WhatsApp us on +34 677 841 007. General information on dismissal in Spain is on the dismissals page.