Odice Lawyers

Termination of contract for non-payment or arrears of salary

ODICE LAWYERS

When the employer does not comply with his obligations, such as non-payment or continued delay in the payment of wages, the worker may request the termination of the contract. This is provided for in the Article 50 of the Workers' Statute:

  • The paragraph 1 establishes the causes considered just for the worker, of his own free will, to request the termination of the employment contract due to non-fulfilment by the employer. These include:
    1. Substantial changes in the working conditions without respecting the provisions of the Article 41 of the Workers' Statute and which are detrimental to the dignity of the worker.
    2. Non-payment or continued delays in the payment of agreed wages.
    3. Any other serious non-compliance of the employer's obligations.
  • The paragraph 2 guarantees that the worker covered by this scheme can receive the corresponding compensation in the event of unfair dismissal.

Requirements for requesting the termination of an employment contract

Termination for non-payment of salary

The requirements to be able to request the termination of the contract on this specific ground are twofold:

  • It must be a uncontroversial salary. This means that termination cannot be requested if it is disputed whether or not a bonus is payable under the collective agreement. 
  • It is necessary that the non-payment is repeated and accumulates several monthly payments. In this respect, case law has established as a general rule a total of 4 monthly instalments in order to be able to request the resolution.

Payroll delays

If there are undisputed wage arrears, the employee is also entitled to request termination for non-performance by his employer.

However, there is more ambiguity as to how many arrears have to be accumulated in order to be able to request a termination. In general, analogy is usually made with the criterion established for non-payments: 4 monthly salary payments, but this has to be analysed on a case-by-case basis. 

Non-payment of wages or payroll arrears: How should I proceed?

If you are a victim of serious non-payment of wages, you can take action in two ways:

  • Out of courtif you formally and reliably inform the employer of the termination of the employment contract and the employer accepts and pays the outstanding amounts.
  • Judiciallyif the employer does not admit the facts. In this case, it will be necessary to file a conciliation paper in which, if there is no agreement, we will have the judicial route open to go to Court and demand that the employer be declared and ordered to pay the wages and the corresponding compensation.

Unemployment compensation and benefits

The termination indemnity for non-payment of wages is equal to the indemnity for unfair dismissal, which is divided into two tranches:

  • 45 days' salary per year worked until 12 February 2012, with a maximum of 42 monthly payments.
  • 33 days per year worked as of 12 February 2012, with a maximum of 24 monthly payments.

In addition, to these amounts must be added the unpaid salaries and default interest (10%) for non-payment of these salaries, as well as the amounts corresponding to the proportional part of the extra payments and holidays not taken.

Debt collection lawyer in Malaga

Non-payment of wages

Addressing a claim for contractual termination for wage arrears is not easy for the layman.

Although it is true that the first instance does not require a lawyer or solicitor and the worker can represent him/herself, it is highly advisable to hire the services of a labour lawyer to go to court.

From Ódice Abogados, Employment Lawyers in MalagaWe will bring the claim to a successful conclusion and obtain the compensation you are entitled to.

Share

Other Articles
Contact

Do you need legal advice and representation? At Ódice Abogados, a law firm in Malaga, we offer different means of communication so that you can contact us.