Two jurisdictions, two timelines and one business risk
There are situations in which a company discovers conduct by an employee that does not belong exclusively to the employment sphere. It is not a matter of lateness, ordinary disobedience or an internal conflict. The conduct may have criminal relevance: misappropriation, dishonest management, disclosure of confidential information, bribery, fraud, document forgery, computer damage or any other behaviour affecting the company’s assets, reputation or operations.
In such cases, the initial temptation is often to wait. To wait for the criminal investigation to move forward. To wait for the investigated person to give evidence. To wait for formal charges. To wait for judgment. In short, to wait for the criminal jurisdiction to remove uncertainty before adopting an employment decision as serious as disciplinary dismissal.
That reaction may appear prudent from a general procedural perspective. In other jurisdictions, the existence of criminal proceedings may justify the suspension or conditioning of parallel proceedings where the criminal facts are decisive for resolving the main dispute.
However, in the social jurisdiction, the rule operates differently. Save for exceptional cases, employment proceedings are not stayed merely because parallel criminal proceedings exist. Above all, the company must not forget that its disciplinary powers are subject to their own time limits within the social jurisdiction.
The practical consequence is severe: an employee may be criminally convicted for acts committed against the company and, nevertheless, obtain a finding that the dismissal was unfair if the company imposed the sanction out of time. The criminal jurisdiction may establish guilt. The social jurisdiction may declare that the dismissal was time-barred. These conclusions are not contradictory, because they operate on different legal planes.
This is the point that many companies, and sometimes legal operators from outside the social jurisdiction, do not assess with sufficient precision. When conduct has both criminal and employment relevance, it is not enough to design a criminal strategy. An employment strategy must be activated in parallel. The company may appear in the criminal proceedings, cooperate with the authorities, claim liability and protect its patrimonial position. But it must also decide, within the employment deadlines, whether to initiate a disciplinary procedure, whether to suspend the employee as a precautionary measure, whether to offer a prior hearing, whether to gather internal evidence and whether to proceed with dismissal.
The autonomy of the social jurisdiction vis-à-vis criminal proceedings
The social jurisdiction has its own logic. Its function is not to determine whether a person has committed a criminal offence, but whether the business decision complies with the employment framework. In a disciplinary dismissal, the employment court assesses whether the alleged facts existed, whether they were sufficiently described in the dismissal letter, whether they were serious and culpable, whether the company complied with the applicable formal guarantees and whether the termination sanction was proportionate.
That analysis may coincide with facts that are also being investigated criminally, but it does not necessarily depend on the criminal judgment. The company may carry out a disciplinary dismissal if it has sufficient knowledge of conduct that is serious from an employment perspective, even if the criminal proceedings remain pending. Likewise, it may be required to act before a conviction exists, precisely because employment law does not automatically suspend disciplinary deadlines pending the outcome of the criminal process.
Article 60.2 of the Spanish Workers’ Statute provides that minor offences expire after ten days, serious offences after twenty days and very serious offences after sixty days from the date on which the company became aware of their commission; in any event, they expire six months after they were committed. This rule incorporates a double dimension: a short period linked to the company’s knowledge, and a long or objective period linked to the date on which the facts were committed.
The decisive question usually lies in determining when the company had sufficient knowledge of the facts. Not every suspicion, rumour or incomplete indication is enough. Case law has used the concept of “full knowledge” or complete, sufficient and precise knowledge of the facts to determine the starting point of the limitation period. But once that knowledge has been reached, the company cannot stop the clock simply because parallel criminal proceedings exist.
This distinction is essential. The company does not have to sanction on the basis of mere suspicion. It may investigate, gather information, activate internal protocols, analyse documentation and determine the real scope of the facts. But once it has sufficient elements to know the attributable conduct, the employment deadlines begin to run. If it decides to wait for the criminal judgment without adopting employment measures within the applicable time limit, it may lose its disciplinary power.
The illusion of the criminal judgment as the starting point
In many cases, the company interprets that the time limit for imposing a sanction should start with the criminal conviction. The internal logic of that position may seem understandable: until there is a conviction, one might think that there is not enough certainty; and if there is no criminal certainty, the company may feel insecure about adopting a disciplinary dismissal.
But that reading does not fit the operation of Employment Law. The company does not need a criminal conviction in order to assess a breach of contractual good faith, an abuse of trust or conduct incompatible with the continuation of the employment relationship. The employment standard is not identical to the criminal standard, nor are the protected interests exactly the same. Criminal Law judges the existence of an offence and its punitive consequences. Employment Law judges whether conduct has breached the obligations inherent in the employment contract.
For that reason, the date of the criminal judgment cannot automatically become the starting point of the disciplinary time limit. If the company already knew the facts before that date with sufficient precision, if there was internal documentation, acknowledgement, acceptance of facts, direct involvement of bodies with sanctioning powers or information allowing the facts to be reconstructed, the calculation may begin much earlier.
The difference between an initial suspicion and full knowledge is not always simple. But it cannot be artificially manipulated either. The company cannot indefinitely delay its employment decision while waiting for the criminal process to do the work that belongs to the internal disciplinary assessment. When the fact is known, the clock starts running. And when the clock starts running, inaction has consequences.
The case analysed: a criminal conviction that does not save a late dismissal
The ruling used as reference, Supreme Court Judgment of 20 May 2026, appeal 2189/2025, offers a particularly clear example of the tension between both jurisdictions.
According to the facts contained in the judgment under analysis, the employee held a position of special responsibility: department director and works manager. Criminal proceedings were initiated, apparently for an offence of bribery related to the award of a public works contract. In view of that situation, the company suspended the employee from work and pay on 3 August 2023. Subsequently, on 29 January 2024, after the criminal conviction had been delivered, the company carried out the disciplinary dismissal.
At first sight, the sequence may appear reasonable to anyone observing the matter from a criminal-law perspective. The company waits for a conviction and, once the conduct has been criminally confirmed, adopts the termination decision. However, from an employment-law perspective, the analysis is different. The question is not only whether the employee was convicted. The question is whether, when the company dismissed the employee, the employment offence was still actionable or had already expired.
The company reportedly argued that the sixty-day period for imposing the sanction should begin with the criminal conviction. The Supreme Court, according to the information provided, rejected that argument. The time limit does not necessarily begin with the criminal judgment, but when the company has full knowledge of the facts. In the case analysed, that knowledge had allegedly arisen earlier: specifically, on the date on which the employee accepted the facts forming the subject of the accusation and the company voluntarily paid the amount of the financial penalty arising from that acceptance.
That moment, identified as 13 April 2023 according to the information provided, allowed the company to know the relevant facts in full. From that date, the employment limitation period had to be calculated. If the dismissal was carried out on 29 January 2024, the disciplinary sanction arrived out of time. The result is legally uncomfortable but coherent: the criminal conviction may stand, while the employment dismissal may be unfair.
The company wins the criminal narrative, but loses the employment case by overlooking the rules on expiry and limitation.
Suspension from work and pay does not replace dismissal
A particularly relevant element of the case is the suspension from work and pay agreed on 3 August 2023. In cases of serious conduct with parallel criminal proceedings, many companies use internal precautionary measures to temporarily remove the employee from their duties, protect the investigation, avoid reputational risks or preserve ordinary business activity.
These measures may make sense, provided that they have sufficient collective, contractual or legal basis and are applied proportionately. But they must not be confused with the final sanction. A precautionary suspension does not automatically interrupt the limitation periods applicable to the offence. Nor does it allow the company to postpone the disciplinary decision indefinitely if it already has sufficient knowledge of the facts.
Suspension may be a containment tool. It is not a solution to the problem of time limits. If the company knows the conduct, it must act within the timeframe imposed by Article 60.2 of the Spanish Workers’ Statute. Otherwise, the suspension may end up being a bridge towards an out-of-time dismissal.
This point is especially important in senior or high-responsibility positions within the organisation. Where the person concerned manages public works, procurement, finance, suppliers, purchasing, licences, strategic information or institutional relations, the reputational and patrimonial impact may be very high. But precisely for that reason, the company must quickly coordinate the criminal and employment strategies. The seriousness of the facts does not eliminate limitation. In some cases, it makes it more urgent.
The cost of failing to coordinate both jurisdictions
The case analysed includes a fact that clearly illustrates the economic risk of late management: the unfairness of the dismissal reportedly gave rise to compensation exceeding EUR 500,000, due to the high salary attached to the management position and the long service accrued.
That figure is important because it breaks a frequent business intuition. Sometimes it is assumed that, if the facts are criminally serious, the employment risk is absorbed by that seriousness. It is not. The company may suffer patrimonial, reputational or institutional damage as a result of unlawful conduct and, at the same time, be required to pay very significant compensation if it failed to respect the employment deadlines.
From a business perspective, the problem is not only legal. It is strategic. A case poorly managed at the intersection between criminal and employment law can multiply its costs: criminal proceedings, defence, appearance as a party, civil liability claims, reputational deterioration, internal measures, employment litigation, compensation for unfair dismissal and possible internal impact on the workforce.
Moreover, this type of case often affects profiles with responsibility, high salaries and significant length of service. That increases the cost of unfair dismissal. When the employee holds a key managerial or technical position, the company cannot afford fragmented management. It needs a coordinated strategy from the very beginning.
The lesson is clear: criminal proceedings may be long; the employment deadline is not.
How a company should act when facts may have criminal relevance
When a company detects potentially criminal conduct committed by an employee, the first decision should not be to wait, but to organise the information. It is necessary to distinguish between suspicion, indication, sufficient knowledge and available evidence. That distinction will allow the company to decide whether to open an internal investigation, activate compliance procedures, preserve documentation, adopt precautionary measures, file a complaint or criminal action, offer a prior hearing and assess disciplinary dismissal.
The internal investigation must be swift, documented and proportionate. The company must identify who became aware of the facts, when they became aware, what information was available and which body had sanctioning powers. These dates may be decisive in future litigation. If limitation is later disputed, the court will not only analyse the date of the criminal judgment, but the moment at which the company could have had full knowledge of the facts.
The prior hearing in disciplinary dismissal must also be handled carefully. Following the Supreme Court doctrine on Article 7 of ILO Convention No. 158, the company must offer the employee the possibility of responding to the allegations before adopting the termination decision. This step must be integrated into the employment strategy without unduly compromising the criminal strategy. The issue is not to disclose sensitive information imprudently, but to comply with employment guarantees through a sufficiently clear allegation.
The dismissal letter must be drafted with particular precision. In these cases, it is not enough to state that there is a criminal investigation or a conviction. The company must describe the relevant employment facts, their connection with the contract, the damage or risk caused, the employee’s position of trust and the reason why the conduct justifies termination. The letter must not depend exclusively on the criminal classification, because the employment court will examine the employment cause.
Finally, the company must prevent the criminal strategy from absorbing the employment strategy. The criminal proceedings may strengthen the company’s position, but they must not paralyse it while the employment disciplinary deadlines are running. Coordination between criminal lawyers, employment lawyers, compliance and management is essential.
Full knowledge: the date that decides the case
The expression “full knowledge” is one of the most relevant elements in these situations. It does not mean a vague suspicion or an incomplete report. But it does not require a final criminal judgment either. It sits at an intermediate point: the moment at which the company has sufficient, precise and complete information to know the attributable conduct and assess a disciplinary response.
Determining that date requires analysing the internal reality of the company. It may be the completion of an internal investigation, receipt of an audit report, conclusion of an internal protocol, a confession, an acceptance of facts in criminal proceedings, receipt of conclusive documentation or the arrival of the facts before a body with sanctioning powers. Each case requires a detailed reconstruction.
In the ruling discussed, the Supreme Court reportedly placed full knowledge on the date on which the employee accepted the facts forming the subject of the accusation and the company voluntarily paid the financial penalty arising from that acceptance. From that moment, according to the criterion described, the company already knew the relevant facts in full. It could not wait for the criminal conviction to start the calculation.
This conclusion has a significant practical impact. In matters with a criminal dimension, companies must carefully document when they access the decisive information. It is not enough to state that actual knowledge arrived with the judgment if earlier acts, documents or internal decisions demonstrate otherwise.
Limitation is not defeated with intuition. It is defeated with a well-constructed timeline.
The balance between criminal-law prudence and employment-law urgency
Managing a criminal-employment case requires balance. Acting too soon, without sufficient information, may lead to a poorly grounded dismissal. Waiting too long, when full knowledge already exists, may lead to a time-barred dismissal. The company must move between these two risks with a clear methodology.
Criminal-law prudence advises against rushing into categorical statements without sufficient basis. Employment-law urgency requires the disciplinary procedure not to be left dormant once the facts are known. The solution is not to subordinate one jurisdiction to the other, but to treat them as autonomous planes that must be coordinated.
In practical terms, this means opening two lines of work. The criminal line, aimed at the complaint, appearance as a party, proof of the offence and recovery of liabilities. The employment line, aimed at the internal investigation, preservation of company evidence, disciplinary analysis, compliance with formal guarantees, the prior hearing and the potential dismissal letter.
Both lines may communicate, but they must not be confused. A criminal judgment may be relevant, even decisive, in some respects. But it must not be the only milestone of the employment strategy. The company that waits until the criminal process is over may discover that, when it wants to dismiss, it can no longer validly do so.
Business discipline also has deadlines
The company’s disciplinary power is not indefinite. That is the underlying message. Even in the face of serious conduct, even in the face of criminally relevant facts, even in the face of offences committed against the company itself, Employment Law requires action within the applicable time limit.
This rule may appear severe from a business perspective. But it responds to a logic of legal certainty. The employee cannot remain indefinitely exposed to a sanction for facts that the company already knows. The organisation, in turn, bears the burden of investigating and deciding diligently. If the conduct is serious enough to dismiss, it must also be urgent enough to activate the employment response.
Limitation does not deny the seriousness of the facts. It does not acquit criminally. It does not erase the damage. It simply prevents the company from using, too late, a disciplinary power that should have been exercised within the legal time limit. That nuance is essential to understand why a criminal conviction can coexist with an unfair dismissal.
The company may be right on the merits and lose because of time.
Legally ordered management from day one
Cases that cross Criminal Law and Employment Law require companies to work with particularly rigorous internal discipline. It is not enough to react to the scandal or wait for the criminal proceedings to move forward. It is necessary to build a reliable chronology from day one, preserve evidence, identify the moment of full knowledge, assess precautionary measures, comply with the guarantees of disciplinary dismissal and decide within the applicable time limit.
The case discussed shows that the most intuitive strategy is not always the safest. Waiting for the criminal judgment may appear prudent, but it may be lethal from an employment-law perspective. A company that does not act in time may end up paying very significant compensation to an employee who has been declared criminally liable for serious facts.
In the business environment, the management of these matters does not allow for watertight compartments. Criminal law, employment law, compliance, human resources and management must operate in a coordinated manner. Each decision in one jurisdiction may have effects in the other. Each date may be decisive. Each internal communication may become evidence of the company’s knowledge.
The lesson is simple, but demanding: when conduct has both criminal and employment dimensions, both proceedings must be managed separately, in coordination and simultaneously. The criminal jurisdiction may take years. The employment disciplinary power may expire in sixty days.
At Suárez de Vivero, we advise companies, international groups and management teams on the employment management of conduct with criminal relevance, complex disciplinary procedures, internal investigations, coordination with criminal-law teams and judicial defence of high-impact disciplinary dismissals.
Frequently asked questions on Criminal Law and Employment Law in disciplinary cases
Should a company wait for the criminal judgment before carrying out a disciplinary dismissal?
Not necessarily. In the social jurisdiction, the existence of parallel criminal proceedings does not, as a general rule, suspend the employment time limits for imposing a sanction. If the company already has full knowledge of the facts, it must assess the disciplinary response within the time limits set out in Article 60.2 of the Spanish Workers’ Statute.
What time limit does the company have to sanction a very serious offence?
Article 60.2 of the Spanish Workers’ Statute provides that very serious offences expire sixty days after the company became aware of their commission and, in any event, six months after they were committed. The key issue is usually determining when sufficient knowledge of the facts existed.
What does “full knowledge” of the facts mean?
It means that the company has sufficient, precise and complete information to know the attributable conduct and assess a disciplinary response. It is not equivalent to an initial suspicion, but it does not necessarily require a criminal judgment either. It may arise after an internal investigation, a confession, an acceptance of facts in criminal proceedings, a conclusive report or the arrival of the facts before a body with sanctioning powers.
Can a dismissal be unfair even if the employee has been criminally convicted?
Yes. The criminal conviction and the employment classification of the dismissal belong to different legal planes. If the company dismisses out of time, fails to comply with formal guarantees or drafts the dismissal letter incorrectly, the dismissal may be declared unfair even if the facts have criminal relevance.
Does suspension from work and pay interrupt the limitation period for the offence?
Not necessarily. Suspension may be a precautionary or disciplinary measure depending on the case and its legal basis, but it should not be assumed that it automatically interrupts limitation indefinitely. The company must carefully analyse the applicable deadlines and adopt the disciplinary decision within the relevant timeframe.
How should the criminal and employment strategies be coordinated?
The company must manage both avenues separately but in coordination. The criminal route is aimed at investigating the offence, appearing as a party and claiming liabilities. The employment route must focus on the internal investigation, the prior hearing, the disciplinary assessment, compliance with deadlines and the potential dismissal letter.
What should the dismissal letter contain in these cases?
It must describe the relevant employment facts with precision: what happened, when, how it became known, what position the employee held, what contractual duties were breached, what impact the conduct had and why the company considers that there has been a breach of contractual good faith. It is not advisable to base the letter solely on the existence of criminal proceedings.
What risk does the company assume if it waits too long?
The main risk is that the offence expires and the dismissal is declared unfair. In profiles with high salaries and significant length of service, the economic consequence may be very substantial, even where the conduct has been criminally sanctioned.
