AGREED DISMISSALS

Sometimes, employees nearing retirement age propose a negotiated severance package to their employer so they can collect unemployment benefits until they are eligible to retire. While the company may benefit from saving on the employee’s salary and social security contributions, these practices constitute fraud, and the Labor Inspectorate investigates them and imposes significant penalties.

According to the law regulating labor law violations and penalties, collusion between a company and its employees to obtain undue benefits or benefits exceeding those to which they are entitled constitutes a very serious offense. This offense is punishable by a fine of at least €7,501; furthermore, the company will be directly responsible for the reimbursement of any amounts unduly received by the employee (for example, unemployment benefits).

Such an agreement is easy for the Inspectorate to detect. For these purposes:

• The dismissal letter is not usually very elaborate.
• The proximity of the affected person’s retirement age, as well as the fact that the dismissal is not being challenged in court, are indications that suggest possible collusion between the company and the employee.
• Likewise, it is common for the Inspectorate to summon both parties, and during questioning it is frequent that contradictions between their versions are detected.

Our professionals will answer any questions you may have regarding dismissals and possible fraud in this area.