This is the first of two articles.  This article will deal with claims for arrears of wages and the second with claims for compensation for bullying or discrimination in the work place.

In the current economic climate the number of employers who are no longer paying their employees on time or at all is growing.  Should this happen to you, what can you do about it?

The Spanish Workers Statute (Royal Decree 1/1995 of the 24^th March 1995) states that an employee is entitled to be paid on time.  Where you are not paid on time you should issue proceedings to claim your wages. To do this your employer must owe you a minimum of two months wages.

Additionally, you can request the termination of your contract of employment if you wish.   In this case you would need to issue two claims, one to claim the money owed and the other to terminate your contract.  However you cannot leave your job until the Court has issued its Judgement, otherwise your employer could claim that you have left your job voluntarily.

If you find that you are a few months in arrears then your employer is obviously having serious financial difficulties and the best thing to do is to take proceedings to claim your wages and terminate your contract.

Your wages or your total remuneration, in cash and incentives, is payment to you for services rendered by you to your employer.  Article 29.1 of the Workers’ Statute states that the period for regular wage payments should never be more than one month.  You can also be paid daily, weekly or fortnightly.  The place and method of payment is can be specified either in your own personal written contract, or a separate document, or possibly even verbally. 

If your employer has not paid any wages for several months or it declares itself insolvent the employee must instigate two procedures in the Servicio de Mediación, Arbitraje y Conciliación (SMAC) of the autonomous region where you are working;

1.                   A Claim For Your Wages

You must claim your arrears of wages by way of a “Papeleta de Conciliación”, this should be prepared by your lawyer and presented to the SMAC who will summon both parties to a meeting and try to find an amicable solution to your dispute.   You must exercise your right to make your claim within one year of the arrears arising and you can claim up to 12 months arrears of wages and it will be for you to prove the arrears.    Article 29.3 of the Worker’s Statutes states that interest of 10% can be added to unpaid wages.

2.                   A Claim To Terminate Your Contract Of Employment

You can also apply for your contract of employment to be terminated by way of a second “Papeleta” issued in the SMAC.  This way you may obtain compensation for the termination of your contract.  In this you will ask for your contract of employment to be brought to an end due to non-payment of wages. You will have the right to receive 45 days wages for each complete year worked.   Following this judicial termination of your contract of employment you may have the right to claim unemployment benefit provided that you have made sufficient social security contributions.

This process takes about 2 to 3 months but you will have to pay your own legal costs.

While these procedures are going on it is important that you continue to attend, or attempt to attend, your place of work.  Should you fail to do so the SMAC may consider that you have in fact resigned from your job and that you have left voluntarily.  In this case you will not have the right to claim unemployment benefit or any compensation.   If your employer does not allow you to attend work then he is dismissing you and must give you a written statement that you are being dismissed.

If your employer continues to pay your basic salary but stops paying the bonuses, commissions, incentives, etc. you can also present a “demanda” (law suit) for the money you are owed.

So what if my employer goes bust?

So what happens to you if your employer goes bankrupt or into administration?  This is a procedure whereby the commercial court suspends all payments to suppliers, workers, etc.  You must follow the same procedure as above, and in this instance you would receive compensation of 20 days wages for each complete year worked up to a maximum value of one year’s wages.  In this case the commercial court would terminate your employment, and you could claim unemployment benefit.

Guaranteed Salary Fund

The Guaranteed Salary Fund (FOGASA) is an organisation, dependant on the Ministry of Work and Social Affairs and funded out of social security contributions that guarantees payment of your wages, and compensation for dismissal or redundancy when an employer goes bankrupt or into administration.

Because of the strict time limit for bringing your claim for arrears of wages, and possibly also terminating your contract of employment,  it is important that you take advice promptly so as not to lose your rights. 

The second of these articles will deal with claims for bullying and discrimination at work.