In its decision 75/2011, dated 1 May 2012, Labour Court 3 of Pamplona clarifies the method for calculating severance payments for unfair dismissal. The case refers to an employment contract that was entered into before 12 February 2012 (the date when the Labour Reform entered into force via Royal Decree-Law 3/2012) and that was terminated after that date.
As severance pay must in these cases be calculated in two phases (firstly, 45 days' salary per year of service for the period from the employment contract start date and 11 February 2012; secondly, 33 days' salary per year of service for the period between 12 February 2012 and the contract termination date), the decision clarifies that the legal round-up formula only applies to the second, post-12 February 2012 period.
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