Employment Litigation for Companies in Spain: Key Factors for Defending Business Decisions

An employment dispute does not begin when a company receives a claim. In many cases, the defence in employment litigation depends on decisions taken months earlier: how a business action was documented, how a measure was communicated or what evidence was preserved throughout the employment relationship.

For companies, entering judicial proceedings means bringing an internal decision before the courts, where it will be analysed from a strictly legal and evidentiary perspective. A business decision may respond to a legitimate organisational need and may have been correctly considered from a management perspective, yet still face significant difficulties if there is no appropriate strategy for defending it before the courts.

In employment proceedings, courts do not only examine whether the company had grounds to act. They also assess whether those grounds can be proven, whether the action respected the employee’s fundamental rights and whether the measure adopted was proportionate. For this reason, preparing for employment litigation begins long before the hearing takes place.

Employer Defence Begins Before Judicial Proceedings

When a company adopts a decision with potential employment consequences, it should consider from the outset how that decision could be defended if subsequently challenged before the Employment Courts. This is particularly relevant for high-impact decisions such as disciplinary dismissals, objective dismissals, substantial modifications to employment conditions under Article 41 of the Employees’ Statute, collective restructuring processes or disputes involving fundamental rights.

The documentation generated during the employment relationship can become the decisive element in the proceedings. An internal communication, performance assessment, organisational report or previous investigation may acquire significant evidentiary value when the court has to assess the company’s actions.

For this reason, day-to-day employment management should incorporate a preventive approach. Judicial defence is not built solely during the proceedings, but through the way in which the company makes, implements and documents its decisions.

What Does a Court Analyse in Employment Litigation?

Each employment proceeding has its own particularities, but there are certain common elements that are usually decisive when assessing the lawfulness of a business decision:

• Proof of the facts: First, the courts assess whether the facts relied upon by the company have been sufficiently proven. It is not enough to state that there was misconduct, an organisational need or an economic reason; the company must demonstrate that those circumstances actually existed when the measure was adopted.
• Causal link: The court will assess the direct connection between the proven facts and the measure adopted. A company may prove that it was experiencing losses, but if the elimination of the specific position does not have an appropriate and proportionate relationship with addressing that situation, the decision may be overturned.
• Proportionality and good faith: Consistency between the reason, the previous documentation and the company’s final action is one of the essential elements of any employment defence. Decisions involving an obvious disproportion between the objective pursued and the burden imposed on the employee may be rejected.

The Importance of Evidence in Employment Litigation for Companies

Evidence is the factor that most directly influences the outcome of employment proceedings. In the vast majority of cases, the difference between a business decision upheld by the courts and one declared unfair or null and void lies in the company’s ability to prove the facts.

Under the general rules on the burden of proof, the claimant must prove the facts supporting their claim, while the defendant must prove the facts that prevent, extinguish or otherwise undermine their legal effectiveness, in accordance with Article 217 of Law 1/2000 of 7 January on Civil Procedure. However, in employment proceedings, this principle is affected by the availability and ease of producing evidence applicable to each party, with the company facing greater evidentiary requirements because it controls the relevant means and holds the internal documentation.

Accounting documentation, professional communications, technical reports, activity records and witness statements may be decisive. Evidence should not be understood merely as a reactive element in response to a dispute, but as an active part of the company’s management.

The Dismissal Letter and Defence in Employment Proceedings

Dismissals represent a significant part of employment litigation involving companies and, in these cases, the dismissal letter has an essential and irreplaceable role. The company must understand that the facts communicated in the dismissal letter will strictly define the scope of the subsequent judicial debate.

Under Article 105.2 of Law 36/2011 of 10 October regulating employment jurisdiction, the company may not rely at trial on grounds for opposing the claim other than those contained in the written dismissal communication. A generic letter based on vague or insufficiently specific statements exposes the company to a finding of unfair dismissal, preventing it from relying at trial on evidence concerning facts that, although real, were not set out in the letter.

By contrast, a clear and detailed communication containing dates and objective information, and consistent with the available documentation, allows the company to build a strong and defensible legal position.

Defending a Disciplinary Dismissal

In disciplinary dismissal cases, the company bears the burden of proving the reality of the facts attributed to the employee and that those facts constitute serious and culpable misconduct, in accordance with Article 54 of the Employees’ Statute.

The courts apply what is known as the gradualist doctrine, assessing factors such as:

• The objective seriousness of the conduct.
• The employee’s hierarchical position and level of responsibility.
• The existence of previous incidents, warnings or disciplinary sanctions.
• The actual impact of the conduct on the reciprocal relationship of trust.

For the defence to be effective, the company must provide solid evidence, such as previous internal investigations, IT audits or witness evidence, demonstrating that the conduct occurred and that, due to its seriousness, continuation of the employment relationship was no longer possible.

A simple subjective loss of trust, without an established factual basis, will be considered insufficient by the courts.

Defence in Objective Dismissals and Restructuring Processes

Proceedings arising from individual or collective objective dismissals present a very different evidentiary challenge. In these cases, the company must demonstrate the actual existence of the economic, technical, organisational or production-related grounds (ETOP) relied upon.

• Individual objective dismissals: The company must prove the relevant ground and explain why eliminating that particular position helps overcome the negative situation or improve the organisation of resources.
• Collective dismissals: Compliance with the requirements governing the consultation period under Article 7 of Royal Decree 1483/2012 of 29 October becomes particularly important. The parties must negotiate in good faith with the aim of reaching an agreement. In addition, companies with more than 50 employees must provide an external redeployment plan meeting the requirements of Article 9 of Royal Decree 1483/2012 of 29 October. Failure to provide the required documentation or the absence of genuine negotiations may result in the collective dismissal being declared null and void, as reflected in case law, including the judgment of the High Court of Justice (Roj: STSJ M 11478:2025 · ECLI: ES:TSJM:2025:11478).

Fundamental Rights and the Risk of Nullity in Employment Litigation

One of the most sensitive aspects, and one carrying the greatest financial risk for companies in employment litigation, is an allegation by an employee that fundamental rights have been violated. This may result in the measure being declared null and void, mandatory reinstatement, back pay and compensation for moral damages.

In these cases, a special rule governing the burden of proof applies. Under Article 96.1 of Law 36/2011 of 10 October regulating employment jurisdiction and Article 30 of Law 15/2022 of 12 July on equal treatment and non-discrimination:

“1. In accordance with the provisions of procedural laws and laws regulating administrative proceedings, where the claimant or interested party alleges discrimination and provides well-founded indications of its existence, the defendant or the party alleged to be responsible for the discriminatory situation shall provide an objective and reasonable justification, sufficiently supported by evidence, for the measures adopted and their proportionality.”

Therefore, if an employee provides even a minimum indication of discrimination, for example on grounds of illness, health condition, sexual orientation or trade union activity, the company cannot simply deny the allegation. It must demonstrate unequivocally that the dismissal or disciplinary measure was based on reasons completely unrelated to discrimination, providing an objective, reasonable and proportionate justification.

The Role of Human Resources in Preparing for Employment Litigation

Human Resources departments play a fundamental role in preventing and managing judicial disputes. The information maintained by HR, the way in which decisions are documented and the coordination with business managers determine the company’s ability to defend itself.

Before reaching trial, it is essential to:

1. Thoroughly review all available documentation and the employee’s file.
2. Identify the strengths and weaknesses of the company’s position.
3. Analyse the potential risks of nullity or unfair dismissal.
4. Coordinate the preparation of the necessary witness and expert evidence.

Proper coordination between Human Resources, company management and external legal advisers allows a conflict situation to be transformed into a structured and robust defence strategy.

Common Mistakes Companies Make in Employment Proceedings

• Acting reactively: Only looking for evidence once the company has already received a claim, when much digital or witness evidence may already have been lost or weakened.
• Lack of prior documentation: Taking disciplinary or termination decisions based on verbal warnings that have left no documentary record.
• Inconsistent application of criteria: Applying a severe sanction to conduct that had previously been tolerated or accepted in relation to other employees, potentially breaching the principles of equality and proportionality.
• Defects in notification: Failing to provide a copy of the dismissal letter to the employee representatives or failing to make the severance payment available simultaneously in objective dismissals without duly substantiated financial liquidity issues.

Judicial Defence as a Continuation of Proper Employment Management

Employment litigation should not be understood as an isolated event within the relationship between a company and an employee. The company’s position before the courts will be the direct result of all the decisions previously taken: how the dispute was managed, what documentation was preserved and what objective criteria were used.

Effective employer defence combines in-depth legal knowledge, rigorous strategic analysis and appropriate preparation of evidence from the very beginning of the dispute.

At Suárez de Vivero, we advise national and international companies on employment litigation, defence before the courts, dismissals, collective disputes, disciplinary proceedings and strategic employment risk management.