Are you a Manager, a Senior Management Contract, a Managerial Worker, or a Senior Contract?
We are employment lawyers specialising in advising on labour relations for executives and management personnel.
- Modification of conditions
- Change of shareholding
- Managing directors
Our Employment Lawyers have more than 25 years of experience advising Executives in all Spanish companies.
It is very important that the manager's contract reflects the clauses that will govern his or her relationship with the company. This is a crucial moment. Our executive lawyers will help you.
Have you been dismissed? It is important that you contact an employment lawyer specialising in management as soon as possible. If you have an employment relationship, you have 20 days to challenge the decision. We will study your case and ensure that you get the highest possible compensation.
Modification of conditions
Have you suffered a substantial modification of your working conditions? It is possible, in certain cases, to request the indemnified termination of the contract. Contact our Employment Lawyers. They are specialists. You can have a short period of 20 days.
Have you been demoted, have you been left without any content in your job? There are times when, due to the company's failure to take dismissal measures, the employee is forced to request voluntary termination of his or her employment contract. It is possible to obtain the same compensation as if it were a dismissal. We are specialists. Contact our labour lawyers specialised in contractual termination at the worker's request.
Contact us at any of our offices in Madrid
Our Law Firm has specialized Labor Lawyers in Madrid and Community of Madrid that will be able to advise and help you in any question related to Labor Law.
Call us and make an appointment in our offices in Madrid, Pozuelo; Villalba or Majadahonda where our Labor Lawyers will assist you.
You can find more information about the current legislation on the website of the Ministry of Employment and Social Security..
Lawyers ExecutivesFor more than 25 years, we have been advising companies and employees on management relations with countless successes.
Executives of the most important companies in Spain from all sectors (Telecommunications, Construction, Banking, Consultancy,...) have been defended by our Lawyers specialised in Executives with great success. We will advise you on:
- Management Contracts
- Commercial Relationships
- Termination of the executive's contract
- Dismissal of the executive
- Modification of conditions
- Downgrading of functions
- Golden parachute clauses
- Directors' liability
Lawyers specialising in Directorsand senior management contracts
Our Employment Lawyers, specialised in Employment Law, will be able to offer you our professional services in the drafting, processing, drafting and defence of any issue related to your senior management contract and your management position.
In this type of special relationship, it is important to know the details and characteristics of these contracts and to know if the senior management employment relationship really exists, if the previous one is suspended, if you have been promoted from a common employment relationship...etc.
We have experience in the defence of executives who form part of the Board of Directors of the Company or of the Company's Governing Body.
Throughout more than 25 years of work, our lawyers have defended a large number of executives of the most important Spanish companies, which allows us to ensure a safe and effective defence.
Contact our offices, and a Partner specialised in Labour Law will be pleased to help you.
Types of Contracts
The Senior Management Contract
1º- At the beginning of the contract: In addition to the normal written requirements, identification of the parties, remuneration, etc., a trial period of up to 9 months can be agreed (art. 5) and the duration agreed by the parties. These contracts represent a notable difference with respect to ordinary contracts in which the normal requirement is the indefinite nature of the same and the trial period is 15 days for those who are not qualified and up to 3 months for the others, except for qualified technicians for whom it can be up to six months, in these non-special employment relationships.
2º- During the term of the contract: Greater freedom of agreement or the setting of specific conditions is allowed, both in terms of total remuneration (in cash or in kind, Art. 4.2 C) and in terms of working hours and timetables (Art. 7), whose limits are not limited or set by agreements, by-laws or regulations.
The conclusion of other contracts with other companies is not permitted without the authorisation of the employer or a written agreement to the contrary, unless the link with another entity is public and has not been excluded in the contract of a special nature to which we are referring, in which case the regulations establish the presumption of authorisation (Art. 8).
According to Art. 15, the remuneration of senior management personnel enjoys the guarantees referred to in Articles 27.2, 29.2 and 32 of the Statute, i.e. the unattachability of the amount of the Minimum Interprofessional Wage, all those relating to settlement and payment, as well as the guarantees of the credits on the salaries of the last 30 days and up to the amount representing twice the minimum wage.
This type of contract can be suspended with the effects and for the cases foreseen in Art. 45 ET (Art. 15.2 RD), with Art. 59 ET also applying with regard to the expiry of actions, including dismissal.
Any reference to the liability of FOGASA is omitted.
The rules of ordinary labour legislation will not apply, unless expressly referred to in RD 1382/85 itself or specifically stated in the contract (Art. 3), which is why Art. 3.3 stipulates that for matters not regulated in these sources, the provisions of civil or mercantile legislation and its general principles will apply, in terms of substantive law, since in procedural matters, the labour order of the ordinary jurisdiction will be competent by express provision (Art. 14 RD).
Art. 9 provides for the situation of internal promotion within the company, a change from an ordinary employment relationship to a special one, with the requirements of written form and its consequences.
3º- At the time of termination:
In addition to the possible termination at the will of the manager, there is also the possibility of obtaining the indemnified termination of the employment relationship at the request of the employee if, within a period of three months after the succession of the company or a significant change in the ownership of the company has taken place.
In these cases, the managerial employee has the right to the compensation agreed in the contract (Art. 10.3), or that which corresponds to cases of resignation of the employer, or the cause is serious non-compliance on the part of the employer, which, if present, exempts the advance notice required in the other cases.
In addition to cases of serious and culpable breach by the senior manager, the relationship may be terminated by the employer with the general requirements and consequences of any employment contract (art. 55ET, or 11.2 RD).
In the event of termination of the contract, the provisions of the contract will apply if compensation has been established, in the event that it has been omitted, the provisions of the RD will apply, which will be 7 days per year and with the limit of six monthly payments (Art. 11), BEARING IN MIND that the compensation may be established by mutual agreement between the parties.
If the employer does not give notice, the managerial worker is entitled to compensation equivalent to the wages for the period of notice not given by the employer.
The rules for termination of the contract set out in the ET also apply.
4º. After the special employment relationship has ended:
This type of contract has the peculiarity of being able to impose the obligation not to engage in an activity that is the same or analogous to that of the company in which he/she left (non-competition agreement), provided that the employer has an industrial or commercial interest in this and that financial compensation is paid to the manager (art. 8.3).
In accordance with the provisions of Royal Decree 1382/85 of 1 August 1985, which regulates the senior management contract, senior managers are considered to be those employees who exercise powers inherent to the legal ownership of the company and relating to its general objectives, with autonomy and full responsibility, only limited by the criteria and instructions directly or emanating from the person or from the governing and administrative bodies of the company.
There is a reciprocal trust between the manager and the company as such, derived from the manager's unique position in the work environment.
In the characterisation of the senior manager, we must distinguish:
A) - Administrators and Directors: These are natural persons who hold positions as administrators or directors in companies, organised in the form of a company. They usually exercise these positions on a collegiate basis.
Their relationship with the employer (the legal entity) is that derived from representation, normally in accordance with the articles of association, and their exclusion from the application of labour regulations is imposed by the fact that there is no employment contract.
The fact that they are directors does not mean that if they also work for something else they are no longer excluded, but that they may be included by virtue of other work that they carry out in the company.
On the other hand, the partner is not a worker, but his status does not prevent him from being a worker, either ordinary or special, unless he is precisely an excluded director, which does not mean that he can be one in any case, it has to be seen in these cases which status, whether that of partner or worker, is the dominant one.
B) - The Senior Manager: this is considered to be those workers who exercise powers inherent to the legal ownership of the company and relating to the general objectives of the same, with autonomy and full responsibility, only limited by the criteria and direct instructions or those emanating from the person or from the governing and administrative bodies of the entity.
It can be defined in two ways:
a) - Negatively: excluding from it those included in Art. 1.3 ET (The activity that is purely and simply limited to the mere performance of the position of director or member of the administrative bodies in companies that have the legal form of a company and provided that their activity in the company only involves the performance of tasks inherent to such a position).
b) - Positively: Those workers who exercise powers inherent to the legal ownership of the company and relating to the general objectives of the company, powers that must be exercised with full autonomy and responsibility, only limited by the criteria and direct instructions emanating from the owner of the company or its governing bodies, are considered senior management personnel.
Senior management personnel is delimited in a very restrictive way by the courts, let's look at some of them:
- The senior manager only has as a superior the corporate body of the company, or the person, who occupies the position of the owner of the company.
- The senior manager therefore receives the powers inherent in the legal ownership of the company; this is a first-degree delegation.
- The scope of action refers to the company as a whole, without prejudice to possible functional specialisation, so that senior management as a whole covers the functional objectives of the company.
- They are governed by the principle of autonomy and full responsibility.
The reason for the exclusion of the senior manager is to be found in the unique relationship of trust that links him/her to the employer, which makes it difficult to apply the common rules of the employment contract, especially those on its termination, because it is the interests of the employer that are entrusted to the senior manager within the company.
The regulation contained in the Decree is characterised by its fragility, referring to the will of the parties, reducing the necessary law to a minimum, a position that is reinforced by the fact that it is based on reciprocal trust, and the fact that it is not governed by the TE, but is governed by civil or commercial law (art. 3.3).
Forms of Contract
The contract is outside the rules of general application. This is demonstrated by the fact that the contract may or may not be in writing, in duplicate, one for each contracting party, without the need to send a copy to the employment office (TSJ Andalucía 2/5/91).
- a) Identification.
- b) Subject matter.
- c) Duration of the contract, which is presumed to be indefinite unless otherwise stated.
- d) Agreed remuneration.
Freedom of agreement:
- a) Trial period which must not exceed nine months if it is a contract of indefinite duration.
- b) Working time.
- c) Non-competition and permanence.
- d) Notice period for voluntary termination of employment.
- e) Compensation.
- f) Faults and penalties.
Consequences of the absence of a written agreement:
- a) With regard to the qualification of the employment relationship, it is considered to be senior management when, in addition to the defining characteristics, there are also the specific functions.
- b) Regarding working time: the limit must not exceed the usual working hours in the corresponding professional field.
- c) Termination:
- Impossibility of sanctioning the senior manager, if a specific regime of faults and obligations has not been agreed, only in the event of serious and culpable breach of his or her obligations.
- If the dismissal is declared unfair, the compensation, in the absence of an agreement, is 20 days' salary in cash, with a maximum of 20 monthly payments.
- In case of unilateral dismissal by the employer, if compensation has not been fixed, 7 days per year with a limit of 6 monthly payments.
Termination of Contract
- Unilateral and voluntary withdrawal by one of the parties
- Just cause
- Concurrence of cases of common labour law
b) Prior notice:
- Unilateral withdrawal: 3 months, which is extended to 6 months when established in writing in the contracts concluded.
- No notice is required in case of serious breach of contract.
Termination at the will of senior management
The employee may terminate the employment relationship:
Without the need to allege just cause (- When he considers that there is just cause to do so-).
A- Causes for termination
- Substantial changes in working conditions that are notoriously detrimental to the employee's vocational training, undermine his or her dignity or are decided in serious breach of contractual good faith by the employer - Non-payment or continued delay in the payment of wages.
- Serious breach of the employer's obligations.
- Succession of the company or change in the ownership of the company, resulting in a renewal of its governing bodies, or in the content and approach of its main activity.
Termination based on any of the causes gives the right to agreed compensation in favour of the manager, in the absence of an agreement, 7 days with a maximum limit of 6 monthly payments.
Termination at will of the employer
It can be done without the need for any justifying cause. Requirements:
- Written notice of termination.
- Prior notice.
- The agreed severance pay must be made available to the manager, which is equivalent to 7 days' salary in cash per year of service, if applicable.
A- Disciplinary dismissal
The contract may be terminated by dismissal based on a serious and culpable breach by the senior manager. The requirements of form, notification and effects of disciplinary dismissal are common to those foreseen in the ordinary labour regime, with the peculiarity that the causes and regulations applicable to this disciplinary measure must be established in the contract.
B- Consequences of the declaration of unfairness or nullity of the dismissal:
If the dismissal is declared unfair, the parties must agree on the reinstatement or the payment of the agreed compensation, and failing that, 20 days' salary in cash with a maximum of 12 days' salary.
g) Special reference to workers who reach senior management status through internal promotion.
This case, as this is where we would find ourselves, has a special treatment.
It occurs when an employee linked to the company by a common employment relationship goes on to perform senior management functions in the same company or in another of the same group that maintains similar associative relations.
The new relationship must be formalised in a written agreement specifying whether the new relationship replaces or suspends the previous one. If nothing is specified, it is suspended.
In our view, the best solution would be for the employment relationship to be suspended, and in the event of an early termination of the contract, the common employment relationship would be transferred to the new one, and compensation would be due in the amount that had been fixed.
In the event that the common employment relationship is also terminated, the compensation would be 45 days per year, with a maximum limit of 42 monthly payments.
The Shield Clauses
The causes, effects and indemnities deriving from the termination of the contract can be foreseen in the contract by means of ironclad clauses.
These agreements can range from a sum of money to the sale of shares in the company, or an option to buy the company's shares, or a lump sum indemnity mutually fixed by the parties.
According to the special labour legislation it is only required to pay contributions if the special rules so stipulate. For senior management workers, the legislation does not establish the obligation to contribute to the fund and only expressly states as guarantees: the unattachability of the SMI, liquidation and collection of salary credits with respect to others.
We will obtain the Maximum Severance Pay
Our Employment Lawyers will know how to advise you on how to challenge the dismissal or, if necessary, with the appropriate discretion, take the appropriate legal action to terminate your employment contract and obtain the maximum compensation, taking into account the different labour reforms that have been implemented.
We have lawyers specialising in compensation for dismissal of executives and the defence of long-serving workers who are entitled to significant compensation.
Trust in our lawyers specialised in labour law.
Our lawyers specialising in employment law
A team of Lawyers specialised in Directors led by our partner Mr. Vicente García Elias.
For more than 25 years we have provided services for Executives and positions of responsibility with excellent results, having obtained important indemnities.
We have had the largest companies in Spain and their Law Firms as opposing parties and have obtained excellent results on most occasions.
We know how to approach your case and we have an important team of lawyers to help you.