One of the aspects which has always caused most concern when embarking on a dismissal for objective reasons is the correct provision of the indemnity provided for this form of termination of contracts.
The provision of the indemnity itself at the same time as the notice of dismissal, by check or transfer. The determination of the salary to be taken into account for the calculation of the indemnity, in particular in cases with complex items of remuneration. The correct identification of the worker’s period of service, when there are previous temporary contracts or possible prior situations of a transfer of undertaking. The arithmetical calculation itself, which may backfire on us.
In short, there are many elements which must be taken into consideration and various factors which may go wrong and may lead to the indemnity being considered not to have been effectively made available. As we already know, the current consequence of such circumstance is the consideration of the dismissal as unjustified due to formal defects.
The concept of excusable error has allowed the strict formal requirements of dismissals for objective reasons to be mitigated, preventing any defect in the determination of the indemnity from leading to the aforementioned consequence of rendering the dismissal unjustified.
The Labor Chamber of the Supreme Court, in a judgment of September 28, 2017, has compiled the case law on excusable error and has defined its content leading to a restrictive interpretation of the circumstances and scenarios which may cause an error made in determining the indemnity to be classified as excusable.
The traditional case law of the Supreme Court in relation to the excusability of error has identified factors such as the quantitative importance of the error, the legal complexity of the case and good faith. However, the Supreme Court qualifies this by stating that not every legal error is necessarily inexcusable nor does every difference, even when it is of a small amount, automatically lead to considering the error as excusable. The classification as inexcusable is imposed in cases in which the employer has been able to and should have avoided it, by using ordinary care. In short, the error will not be excusable when, in the light of the circumstances as whole, there is no justification for making it, applying for the assessment thereof such ordinary care.
In relation to the element of good faith, although the Supreme Court considers a sign of good faith the correction of the error as soon as it is identified, it is also important to point out that such correction may not be sufficient if the amount of the difference in indemnity is high (in the case analyzed in the above-mentioned judgment, the difference amounted to 18%).
In conclusion, we must remember the importance of an adequate determination of the items included in the calculation of the indemnity for dismissals for objective reasons and the need to check such calculations with the utmost care. If, nevertheless, an error occurs, it is advisable to correct it as soon as it is identified.
Garrigues Labor and Employment Law Department