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The downsides of moving to Spain for work

Spain is an amazing country to live in but it’s important to be aware of the drawbacks that exist for people looking to further their careers here.

The downsides of moving to Spain for work
Photo: AFP

*This article was originally written in December 2019 before the Covid-19 pandemic

For a news website which aims to bring greater understanding of Spain to English speakers who have chosen it as their home or are planning to, writing about the more negative sides of life in España can feel a bit like sacrilege. 

After all, no country is without its faults, and for all the World Happiness Indexes that put countries such as Denmark, Finland and Switzerland on the podium, Spain is for many foreigners and proud Spaniards a country that oozes calidad de vida (quality of life).

That’s the chief reason why the recent HSBC Expat Explorer Survey ranked it in fourth position globally as the best country to move to for foreigners, only behind Switzerland, Canada and Singapore.

Respondents already living in Spain gave it sky-high scores for “quality of life”, “physical & mental wellbeing”, “cultural, open and welcoming communities”, “political stability” (despite there being four general elections in four years) and “ease of settling in”.

The “little expat” scores reviewing what it is like for foreign families with children in Spain were equally encouraging: second best globally for “learning” and making “friends”. 

The quality of life in Spain is undoubtedly good. Photo of Granada: Kristoffer Trolle/flickr

But, and it’s a very big but, Spain’s Expat Explorer scores for the “aspiring” category focusing on work matters were far less encouraging: 21st for “income”, 27th for “disposable income”, 14th for “economic stability” as well as a lowly 33rd place for “career progression” and 28th for “reaching potential”.

Another survey by Internations drew a similar conclusion: Moving to Spain will make you happier and healthier, but there’s a downside (no brownie points for guessing what it is now).

So there you have it. In a nutshell: life in Spain is good, work in Spain is bad.

Does that mean that if you move to Spain for work you’re destined for a life of poverty and feeble working conditions? Absolutely not. 

In fact, your language skills – English or otherwise – could be what make you stand out in a competitive job market famed for its chronic unemployment.

And we’re not just talking about language teaching, there are plenty of companies with international operations in Spain that will be willing to pay (fairly) well for your services.
However, the overall consensus is that Spain has a lot to improve on when it comes to work matters.

If you’ve been thinking of moving to Spain but you’re unsure about what awaits you regarding work, here is some more detailed information that could help you make your mind up.

Lower than average salaries

The average Spanish salary before tax is €1,658/month compared to the EU28 average of €2,091/month. That makes Spain the country with the lowest pay in Western Europe, with only Portugal below it (€997/month).

Sure average living costs are on average lower than in neighbouring countries, but recent data by the Bank of Spain and the country’s National Stats Agency (INE) show that whereas wages have only gone up by 1.3 percent since 2013, rents have increased by 30 times that in the same period.

This is particularly true in big cities such as Madrid and Barcelona and popular tourist spots such as Ibiza, Mallorca and Tenerife.

Stunted career aspirations

It’s worth noting that the HSBC study mentioned earlier in which Spain came 33rd for “career progression” included 33 countries, so Spain came rock bottom in that category.

In the Internations study, three in ten expats (29 percent) said they were disappointed with their career prospects in Spain (vs. 24 percent globally).

According to Barcelona University economics professor Gonzalo Bernardos, there isn’t a system of meritocracy applied in Spanish companies.

This, along with the other drawbacks of working in Spain, means that the main reasons foreign professionals end up coming or staying in the country are either personal or because they set up their own business.

It’s perhaps understandable that in a country where unemployment and job instability have been a mainstay, there is an unspoken attitude of protectionism when it comes to who gets to move up the ladder.

Painfully slow bureaucracy

This is a serious problem for foreign professionals whose occupation has to be recognized and regulated by Spanish authorities and/or a governing body: doctors, vets, nurses, pharmacists, physiotherapists, architects, lawyers, engineers, academics etc

Spain has always had slow and long-winded bureaucratic processes but the arrival of thousands of Venezuelans escaping their crisis-hit country in the last few years has made matters much worse as the Spanish ministries charged with degree recognition struggle to keep up.

For a person with a non-EU qualification in one of these regulated occupations, the current waiting period is two years and in many cases even longer.

That’s compared to 3 to 4 months in countries such as the Netherlands or Germany.

For the recognition of an EU qualification the waiting period is less but the process could still end up taking 6 to 8 months.

Less job security

Even though Spain has put the worst of the economic crisis behind it (when a quarter of the country’s working population was out of work), the economic model remains the same: a service-based economy that’s largely reliant on tourism.

This means a lot of the work being created is still largely seasonal and fails to offer Spaniards, especially under 25s, any sort of job stability.

The proliferation of zero-hour contracts and “falsos autonomos” (‘fake self-employed people’ as they’re referred to in Spain, given that they’re working full-time without getting their social security paid for them by companies) has only meant that workers in Spain have fewer rights than ever.

A 2018 study by the European Trade Union Institute reported that Spain had the worst working conditions in the EU with only Greece and Romania receiving a worse score.

READ MORE: ‘Think hard before going self-employed in Spain’

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WORKING IN SPAIN

How much severance pay will I get if I’m sacked in Spain?

There could be changes on the way for Spain's redundancy pay system. But if you are sacked in Spain, how much are you entitled to, and can you claim extra compensation?

How much severance pay will I get if I'm sacked in Spain?

It’s something nobody wants, but if you’re let go from your job in Spain, you’ll need to know about two things: redundancy payments (el finiquito) which everyone is entitled to, and possible compensation payments (indemnización por despido) that depend on a variety of factors such as seniority, salary and the reason why the work relationship ended.

El finiquito

In Spain, el finiquito refers to the financial settlement an employee receives when their contract is finalised.

This redundancy pay, often accompanied by an official dismissal letter stating the end of a worker’s contract, is a lump sum of money that a company must pay to an employee.

El finiquito is always paid when you lose your job, but how much you are paid depends on various factors, including how much salary you have outstanding, how many days you’ve worked that month, and any unused holiday days you have accrued.

El finiquito can include compensation payment, which depends on whether the employee was fired and the type of dismissal. Companies can carry out three types of dismissals: objetivo (the worker has no blame), disciplinario (the worker is at fault) and colectivo (objective dismissal of a significant number of workers). But if the employee doesn’t agree with the reasons for being fired by their employer, they can raise the matter with a judge to determine whether their dismissal was justified (procedente) or wrongful (improcedente).

Unpaid salary

In Spain, redundancy pay is proportional to the time worked in the current month – as in the month you have been sacked, so far. That is to say, if you are sacked the number of days you’ve worked in the month until that day is included in the redundancy settlement.

Let’s look at an example.

Say you’re an employee in Spain who earns €1,300 a month. For whatever reason, you are laid off. Once you get over the shock, you should begin to calculate – how many days have I worked this month?

Say it was 17 – you had worked 17 days in the month you were fired. Well, your redundancy payment would work like this:

€1,300 / 30 days a month = €43.33 per day

Your daily salary would then be multiplied by the days worked in that month: €43.33 x 17 = €736.61.

That would mean you’re entitled to €736.61 of redundancy payment.

Extra payments

As many of you may know, in Spain employees generally receive fourteen payments a year. They get the twelve monthly payments, but also two extra payments known as pagas extraordinarias (literally meaning, extraordinary payments).

These are basically like bonuses, and usually come in the summer and winter period at a time negotiated between employers and employees, according to Article 31 of Spain’s Workers’ Statue Law.

To continue with our example from above, if you’re sacked on the 17th of November you’d have already received your summer bonus but not the Christmas one. In that case, it would be factored into your redundancy payment.

Let say your pago extraordinario was a bonus worth €1,500. If we divide €1,500 by 365 days = approximately €4.11 extra pay per day. Subsequently, at this amount, €4.11 must be multiplied by the days worked in the entire year – if you were sacked on the 17th of November, that’d be 317 – which would give you a nice Christmas bonus payment of €1,302.87 added to your redundancy payment package.

Unused holidays

If you have accrued holiday days but haven’t taken advantage of them before you’re sacked, you are entitled to have any outstanding holiday days owed to you paid into your redundancy package.

The calculation is proportional, and you must first calculate how many vacation days correspond to you for each month worked. Continuing our example from above (sacked on November 17th), to know how many holiday days you are entitled to you should calculate holiday days for the days worked per year so far, and divide the result by 365:

(30 x 317) / 365 = 26 days.

Say you’ve taken advantage of 15 of your annual holiday leave. That would mean you are entitled to 11 days of unused holiday accrued. At your daily rate of €43.33, 11 x €43.33 = €476.63 in unused holiday days to be added to your redundancy payment.

Compensation pay (Indemnización por despido) 

Though the vast majority of contract workers are entitled to redundancy pay, you may also qualify for compensation payment, known in Spain as indemnización por despido.

However, unlike a redundancy payment that is uniform and everyone receives, for compensation there are some other key factors that determine if and how much you could be entitled to.

Annual salary – including overtime payments, commissions, bonuses and other supplements, the average year of overtime, productivity pay and other bonuses such a car or house owned by the employer. Tax allowances, cash tips and social security contributions are exempt from calculations.

Seniority – The number of months and years you’ve worked for the company. Generally speaking, if you’re fired without being at fault you’re entitled to 20 days of wages for every year you worked for the company, with the lump sum limit set at 12 monthly wage payments. For wrongful dismissals, this amount can be 33 days for every year worked (a lump sum limit of 24 monthly payments) and for job contracts signed before 2012 it is 45 days of wages for every year worked (a maximum of 42 monthly wages).  

Type of contract termination – was it voluntary redundancy? Non-voluntary? Were you sacked for inappropriate behaviour? When a sacking is considered just or appropriate, there is no right to compensation, but you will still receive the redundancy payment. How exactly you were sacked can determine your compensation claim as only workers with despidos objetivos and improcedentes have the right to claim this type of compensation.

So for example, an employee who has worked for two years and three months for a company and has an annual gross salary of €14,000 is sacked and a labour court finds it was a wrongful dismissal. They were hired after 2012 so 33 days of wages correspond for every year worked (max 24 monthly payments). 

The calculation would be:

33 days x 2 years = 66 days

3 extra months = (33 x 3)/12 = 8.25 days

66 + 8.25 = 75 days of compensation pay

€14,000 gross annual salary/365 = €38.3 daily wages

€38.3 daily wages x 75 days of compensation = €2,887.5 of compensation pay for unfair dismissal

Changes coming?

An ongoing claim at the European level by one of Spain’s biggest trade unions, the UGT, could force some changes to the Spanish compensation and severance payment systems in the near future. The European Committee on Social Rights, the body processing the UGT claim on dismissal pay settlements, has stated that the claim has a ‘high probability’ of winning because Spanish legislation could be found to contravene Article 24 of the European Social Charter.

If successful, the UGT’s claim could force changes to the law that would result in a more personalised system of redundancy payments intended to benefit workers on an individual level, but some experts warn that it risks increasing inequality in the workplace and employment market. Bernardo Pérez-Navas, partner of Laboral de Garrigues, explained to Spanish newspaper El Mundo that “The current compensation calculation system is based on the application of an objective scale through two criteria linked to the employment relationship: salary and seniority. This provides unquestionable legal certainty and frees the worker from having to prove the damages suffered, their quantification and the causal relationship. In addition, it guarantees the equality of all workers.”

Some employment experts believe that if the UGT’s claim is successful and compensation payments are made more personalised, it would create a legal maze for claimants and result in more uncertainty and even possible litigation between employers and employees because the onus would be on the employee to prove their rights and any damages suffered. “It cannot be directly concluded that such a change will necessarily be beneficial for workers,” Pérez-Navas said.

 

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