An employment relationship may be terminated for disciplinary or objective causes. However, Article 49.1 b) of the Workers’ Statute, outside the framework of dismissal, also allows the termination of the employment contract “for the reasons validly stated” therein.

However, the regulation and application of the termination condition has always been a source of multiple conflicts since, unless expressly agreed between the company and the employee, it does not entail any indemnity. This has led on numerous occasions to abuses by companies with the aim of avoiding dismissal and avoiding the payment of the corresponding legal indemnities, especially when the cause of termination is linked to the employee’s performance in order to avoid disciplinary dismissal due to a voluntary and continuous decrease in work performance.

Consequently, the Courts and Tribunals have been limiting the exercise of the termination conditions of employment contracts in such a way that they have been demanding that such conditions comply with the principle of good faith; are not contrary to the law, morality or public order; do not refer to a future and uncertain event; are not impossible to comply with; and, do not depend exclusively on the will of the company.

In this context, the Supreme Court has analyzed, in its recent judgment of September 16, 2024, a contractual clause that allows a company to terminate employment contracts when 75% of the average monthly production of the workers of the service to which each employee is assigned is not reached in three consecutive or four alternate months.

The High Court made a restrictive interpretation since the guarantees regarding the termination of the employment relationship are at stake and concluded that the aforementioned clause is unlawful since it “does not evaluate the subjective circumstances of the persons affected, unlike the disciplinary dismissal” which, both in the statutory regulation and in the collective agreement applicable in the case in question, “requires that the breach of contract be culpable”, and therefore the disciplinary dismissal mechanism must prevail.

On the other hand, since the contractual clause is included in all employment contracts as a “standard clause” and, consequently, since it has not been subject to free negotiation with each of the employees affected nor to negotiation with the legal representation of the workers, it qualifies the employer’s actions as constituting a violation of the right to freedom of association in its collective bargaining aspect.

In view of the above, in order to avoid legal disputes, companies must be very rigorous when drafting termination clauses, comply with the principle of good faith and respect collective bargaining.

Silvia Palacios, Partner and Head of the Labor Law Department of Selier Abogados