Termination of a Contract by Mutual Agreement Does Not Allow for a Lawful Discharge of the Employee Contract for Specified Works.

18 December 2007

Comments on the Supreme Court ruling, Labour Court dated June 14, 2007.

This ruling affects the telemarketing sector above all and, in general, companies that use the temporary contract for works or services, with limits on the length according to the service contract signed with a third party, in order to carry out a specific campaign.

The Supreme Court sets case law which establishes that the discharge of the contract for works/service by the company will be considered null and void, when the contract is terminated by mutual agreement by the companies before the date originally set for the contract termination. The termination will be determined a wrongful dismissal with the accompanying legal obligation to rehire the employee or compensate him or her.

The ruling also says that when the contract is terminated for reasons beyond the control of the contractors, the contract for specified works can be validly terminated. Therefore, if the contract was discharged due to some fault of the contractor (for example: breach of contract) the termination of the temporary contract would be deemed a wrongful dismissal.

For more information: agomez@mmmm.es