# Severance pay



## maxd (Mar 22, 2009)

We just paid 10k euro to make 2 people redundant. Now some cleaners on full time contract are being cheeky because they want to be sacked too.

God, is there any way to get out of paying this crazy redundancy pay in this socialist hell hole!


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## Xose (Dec 10, 2008)

maxd said:


> We just paid 10k euro to make 2 people redundant. Now some cleaners on full time contract are being cheeky because they want to be sacked too.
> 
> God, is there any way to get out of paying this crazy redundancy pay in this socialist hell hole!


It's that thought process with micky mouse companies that keeps Zappatero where he is today. Have you not made provisions in the gravy days for redundency? - or has the Lamborghini Murciélago taken that fund?


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## maxd (Mar 22, 2009)

Xose said:


> It's that thought process with micky mouse companies that keeps Zappatero where he is today. Have you not made provisions in the gravy days for redundency? - or has the Lamborghini Murciélago taken that fund?


See socialsts everywhere 

If were were to sack everyone it would basically wipe us out and then there would be no business. Spain sucks for employers.


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## Stravinsky (Aug 12, 2007)

maxd said:


> See socialsts everywhere
> 
> If were were to sack everyone it would basically wipe us out and then there would be no business. Spain sucks for employers.


Errrr .... not too different from the UK for medium sized companies then  But then you're an employer and you are bound to say that 

I employed 25 staff in the UK and it was a bloody nightmare, I ended up more of a wet nurse than an MD!


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## maxd (Mar 22, 2009)

Stravinsky said:


> Errrr .... not too different from the UK for medium sized companies then  But then you're an employer and you are bound to say that
> 
> I employed 25 staff in the UK and it was a bloody nightmare, I ended up more of a wet nurse than an MD!


Ah, you mean the Socialist people's Republic of the United Kingdom. Unfortunately we have the pleasure of doing business there too.

But look at this:

UK redundancy pay less than half the EU average

UK redundancy pay less than half the EU average


Belgium is about the worst place. The social costs are just mind boggling there and we have the pleasure of a tax inspection this week due to us wanting to write off furniture over 3 years insteas of 5. Nice, but I guess someone has to pay for students beer money and the unemployed.


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## Xose (Dec 10, 2008)

maxd said:


> See socialsts everywhere
> 
> If were were to sack everyone it would basically wipe us out and then there would be no business. Spain sucks for employers.


Hardly socialist. Fair, absolutely. You want to take on someone with a permanent contract, you're responsible to that family's food on the table with that contract. You break it, you buy it - simple.

What would you do then - "Oh that little plan of mine didn't work out, OK you lot, off you go... thanks for your help on equal profit sharing in the past".

It's called manpower planning.

It's a ***** isn't it. Nice big juicy contract - BUT, do we risk taking on more people? No worries, we'll just take the money but if it fails, they can take the risk. Right?!


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## maxd (Mar 22, 2009)

Xose said:


> Hardly socialist. Fair, absolutely. You want to take on someone with a permanent contract, you're responsible to that family's food on the table with that contract. You break it, you buy it - simple.
> 
> What would you do then - "Oh that little plan of mine didn't work out, OK you lot, off you go... thanks for your help on equal profit sharing in the past".
> 
> ...


That is why they and we pay social security isn't it?


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## Xose (Dec 10, 2008)

maxd said:


> That is why they and we pay social security isn't it?


What?! - I know that's what Social Security has ended up covering, HUGELY bad business risks, mostly by banks. But I'm fairly sure that's not what it's there for 

Wow, that would have been great back in the day. I remember it as if it was yesterday. "Now's the time to take on staff" - "Bloody hell, you sure??!!", says the partner. Yeah, no worries. What's the risk?!

I would have loved that


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## Stravinsky (Aug 12, 2007)

maxd said:


> Belgium is about the worst place. The social costs are just mind boggling there and we have the pleasure of a tax inspection this week due to us wanting to write off furniture over 3 years insteas of 5. Nice, but I guess someone has to pay for students beer money and the unemployed.


In Benelux countries its more normal to offer contracts, often lasting only 6 months. In that way the companies escape the risk of redundancy ... I guess thats the price the people pay for high redundancy costs!


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## maxd (Mar 22, 2009)

Xose said:


> What?! - I know that's what Social Security has ended up covering, HUGELY bad business risks, mostly by banks. But I'm fairly sure that's not what it's there for
> 
> Wow, that would have been great back in the day. I remember it as if it was yesterday. "Now's the time to take on staff" - "Bloody hell, you sure??!!", says the partner. Yeah, no worries. What's the risk?!
> 
> I would have loved that


Well, how about also collecting for the VAT man, paying business taxes on top social payments as well + paying for licences that the city hall keeps on inventing. Etc Etc. 

Actually, you are right we only found out about Spanish severance when the downturn came. Also our Spanish MD was not very thorough when he started offering ever fekka...err I mean valued employ a full time contract. He has now gone and we are left to clean and pay for the peices. The joys of being a business owner I guess.

So, if anyone knows how we can weasel out of it, instead of discussing social policy, please let m know


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## Pesky Wesky (May 10, 2009)

Stravinsky said:


> In Benelux countries its more normal to offer contracts, often lasting only 6 months. In that way the companies escape the risk of redundancy ... I guess thats the price the people pay for high redundancy costs!


Isn't that one of the problems in Spain, that people are given a series of 3 month contracts until they can't legally do it any more and then they get another person to do the same job?? Or is that supposedly illegal now?
In one company that I've been going to for 6 years they've had at least 8 receptionists, if not more...


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## mrypg9 (Apr 26, 2008)

maxd said:


> Well, how about also collecting for the VAT man, paying business taxes on top social payments as well + paying for licences that the city hall keeps on inventing. Etc Etc.
> 
> Actually, you are right we only found out about Spanish severance when the downturn came. Also our Spanish MD was not very thorough when he started offering ever fekka...err I mean valued employ a full time contract. He has now gone and we are left to clean and pay for the peices. The joys of being a business owner I guess.
> 
> So, if anyone knows how we can weasel out of it, instead of discussing social policy, please let m know


Oh dear, maxd, we seem to be going through a bad patch.  It seems you didn't do your homework very thoroughly. Surely as a business owner you should have carefully scrutinised the employment regulations before you dipped your toes into Spanish waters, so to speak. As an internet trader operating in several states surely you checked out EU rules and regulations before setting up offshoots in Spain and elsewhere?
If you have time on your hands in future you could perhaps do a little reading in political theory and economy. How on earth any one can describe the UK as 'socialist' is beyond me. Tony Blair's Government faithfully followed Tory spending plans for its first term. It gave independence to the Bank of England - a neo-con policy if ever there was one. PFI socialist??? Almost complete lack of financial regulation socialist?? Removing the 10% tax band socialist?? You are probably unaware that the tax burden on most ordinary families was higher at the end of the Thatcherite period of Government than at the start. I''m sure that you don't know that the first sell-off of state assets took place under the Labour Government of James Callaghan when Dennis Healey sold off British Petroleum.
As for the welfare claimants you rightly complain about: the percentage of workless households increased from 6.5% in in 1975 to 19.1% in 1994. Between 1995 and 1997 there was an increase of 15% in the number of unemployed lone parents. 
We have the neo-liberal Tories to thank for the growth of our dreadful underclass. It would seem that under Cameron, the Tories are at last reverting to the 'one-nation' philosophy of Conservatism which served the country well for many prosperous decades.
EU states such as Denmark, Norway, Germany and France are much more 'socialist' (as you would presumably see it) in their tax and benefit structures. The first two especially are high tax, high wage, high social benefit economies. Their inhabitants enjoy a very high standard of living and good quality of life.
We too were owners of a medium-sized concern in the UK, as you know. We too moaned about taxes, about all the red tape and regulations, about the difficulties of recruiting and retaining a highly-qualified and motivated work force. But we paid our taxes, remunerated our employees well and invested in new plant and equipment to improve our profitability. Yes, we paid a great deal in taxes etc . but we nevertheless managed to accrue sufficient funds when we decided we'd had enough of working to be able to live a good life before we were too old to enjoy it.
The difficulties you are currently dealing with are part of the normal course of business life. How you deal with them will depend on your expertise and experience. If you are planning for long-term success, you will have to contribute as well as take. That's how successful businesses flourish and stay in business. 
Ranting on about what you mistakenly perceive to be 'socialism' won't improve matters. The current UK Government is not 'socialist' - it is merely appallingly incompetent and thankfully won't be around much longer.
Attack it for what it is, not what it isn't.
And anyway, if all fails, remember you are living in Prague and can live to a higher standard there on much less than in the UK. Life must be even better in Bulgaria or Romania for a recipient of funds in euros or even sterling.
Although that's not enough to tempt me back there..
And just a thought: how is doing all in your power to evade paying business taxes whilst enjoying the infrastructure provided from state funds different in moral character from attempting to obtain benefits to which you are not entitled?


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## mrypg9 (Apr 26, 2008)

maxd said:


> So, if anyone knows how we can weasel out of it, instead of discussing social policy, please let m know



'Weasel out of it'??? You mean, how can we bend or break the law to avoid our responsibilities? And you are talking about 10k euro here, not megabucks. 
Come on, maxd, you are behaving like a benefit cheat. 
Respectable businesspeople operate within the law and are careful to maintain a reputation for trust and probity. The way you treat your employees will affect your reputation with your customer base. 
If there are legitimate ways to avoid your responsibilities as an reputable employer, surely your lawyer would have advised you by now?


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## mrypg9 (Apr 26, 2008)

maxd said:


> Actually, you are right we only found out about Spanish severance when the downturn came. Also our Spanish MD was not very thorough when he started offering ever fekka...err I mean valued employ a full time contract. He has now gone and we are left to clean and pay for the peices. The joys of being a business owner I guess.
> 
> QUOTE]
> 
> ...


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## JBODEN (Jul 10, 2009)

mrypg9: I smell ears burning!


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## maxd (Mar 22, 2009)

mrypg9, People make stupid decisions without our knowledge. Happens all day every day here, there and everywhere. I am sure you have made your fair share of dumb ones in your time too. 

Cleaners are on full time contracts because OF THE SPAINISH LAW. We want reliable people who do not steal from us or our guests and changing them every few momnths does not instill a sense of loyalty. Like I say, they have seen nice redundancy pay now from others and are being cheeky so they can have a peice of that too.

Do not see your point? We give our managers a lot of autonomy and on one had we have peace and quiet but on the other we are open to them messing up. It is easy to say sitting in your armchair in Marbella that things should have been done differently.


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## Xose (Dec 10, 2008)

maxd said:


> mrypg9, People make stupid decisions without our knowledge. Happens all day every day here, there and everywhere. I am sure you have made your fair share of dumb ones in your time too.
> 
> Cleaners are on full time contracts because OF THE SPAINISH LAW. We want reliable people who do not steal from us or our guests and changing them every few momnths does not instill a sense of loyalty. Like I say, they have seen nice redundancy pay now from others and are being cheeky so they can have a peice of that too.
> 
> Do not see your point? We give our managers a lot of autonomy and on one had we have peace and quiet but on the other we are open to them messing up. It is easy to say sitting in your armchair in Marbella that things should have been done differently.



SPANISH LAW ?! You're having a bubble mate!! The gross margin you mean.

Ever heard of Adecco?!!

I know several companies who's core team is about 10% of their peak headcount. They take the contract (cleaning personnel is one of the types, cable jockeys etc., etc.) and hire temp agency people.

Guess what though - the margin's aren't quite the same. But then you'd know that, wouldn't you?! 

Out of control rapid expansion is one of the most common causes of positive book/negative cash flow failures. In any country, get it wrong, you go down. It's the capitalist way you are obviously so fond of.


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## maxd (Mar 22, 2009)

Xose said:


> SPANISH LAW ?! You're having a bubble mate!! The gross margin you mean.
> 
> Ever heard of Adecco?!!
> 
> ...



Agencies workers are unreilable. Once you have trained them they leave and you start again. Then you go in a circle. We needed reliablity. Now we get opportunism. Being rude, turning up late etc and something really really bad that I cannot go into here. You can sack them but that is what they want. Who can blame them, the system gives 45 days for every year worked.


Check this calculation out. Spain is 5 times the UK:

Based on minimum statutory paid notice and severance pay for a white-collar employee aged 40, made redundant after 10 years on a salary of £20,000, the average redundancy pay across the EU was £11,163.


But using the same comparison the redundancy pay would be just £5,000 in France and the Netherlands and £5,128 in the UK. In Spain and Italy the payment would be £25,464 and £18,276 respectively, and £15,000 for both Belgium and Austria



I know you do not care but imagine a company is burning cash in the recession now, and a lot are. To be strong and survive you need to cut down your labour force but the law says you have to pay mega bucks to get rid of them. The result is downsizing will kill you.

Luckily, we are not in that situation but A LOT of Spanish companies and all the talk of labour reform is just hot air but in the end Spain is going to a lot worse place for it.


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## mrypg9 (Apr 26, 2008)

maxd said:


> mrypg9, People make stupid decisions without our knowledge. Happens all day every day here, there and everywhere. I am sure you have made your fair share of dumb ones in your time too.
> 
> Cleaners are on full time contracts because OF THE SPAINISH LAW. We want reliable people who do not steal from us or our guests and changing them every few momnths does not instill a sense of loyalty. Like I say, they have seen nice redundancy pay now from others and are being cheeky so they can have a peice of that too.
> 
> Do not see your point? We give our managers a lot of autonomy and on one had we have peace and quiet but on the other we are open to them messing up. It is easy to say sitting in your armchair in Marbella that things should have been done differently.


There are dumb decisions and dumb decisions. Not knowing basic matters of business practice is beyond dumb. 
Asking people how to avoid your legal and moral responsibilities on a public forum is also beyond dumb. This forum is not like expats.cz. People on here are respectable types, not fly-by-nights and big fish in little ponds with big ideas and scant knowledge.. They are business owners, former business owners and also employees. I'm sure they were impressed by your request for ways to 'weasel' (your words) out of your obligations as they too may be facing redundancy.
Some people may also think it dumb to advertise your woes publicly. Telling everyone that you need to make redundancies doesn't exactly help business confidence. Announcing that you wish to find ways of depriving your employees of their legal rights gives a poor image of any business. You say you want reliable and honest employees yet you tell us all you want to behave in a dishonest way to those you have had your use of. How can you expect loyalty from your employees when you behave like that? 
As for your cleaners -surely you have them on temporada contracts where their entitlements are restricted?
You are a property management company that rents out apartments from owners for a fee. There may well be many people out there who would be put off usiing your services if they knew a) that you were in a position where you have to cut costs and b) that you were prepared to engage in such unethical practices.
So to answer your question: no, we didn't make 'dumb' decisions when running our businesses. We acted in accordance with the law and treated our employees fairly. We were proud of our reputation for integrity and fair dealing with all. I regard rogue employers and benefit cheats as one of a kind.
Internet trading is a fascinating phenomenum -few if any fixed assets, flexible and internationally mobile. Few lasting successes, many failures. But there is still an obligation to trade ethically. Some things such as reputation are of great value to most people.


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## mrypg9 (Apr 26, 2008)

maxd said:


> Agencies workers are unreilable. Once you have trained them they leave and you start again. Then you go in a circle. We needed reliablity. Now we get opportunism. Being rude, turning up late etc and something really really bad that I cannot go into here. You can sack them but that is what they want. Who can blame them, the system gives 45 days for every year work
> 
> 
> Check this calculation out. Spain is 5 times the UK:
> ...


You are digging a hole for yourself. Your employees are obviously aware of your attitude towards them and are reacting accordingly. If your employees steal or break the terms of their contract and labour law you can sack them on the spot for serious breaches - no comeback, no compensation. How can you say 'that is what they want'? They will get no redundancy and because they have been sacked they may not be eligible for some benefits. They will get no reference to help find another job. So how on earth can anyone 'want to be sacked'?????
And I'm not sure about your claim of 45 days for every year worked. But if that were so, then solid businesses make provision for that, as Xose has already told you. It's one of many factors that affect your pricing structure.
Not all companies shed staff in times of recession. If your staff are trained and qualified it is often counterproductive. Look at the example of Germany: (a very socialist country, by your definition, although Angela M. would be surprised to learn you view her as a red) the majority of German Mittelstand firms kept their workers during the tough times which could be why they are out of recession.
The bottom line is this: if your business is in such dire straits that you are unable to operate without cutting to the bone or resorting to dubious tactics then you have either made errors of judgment with your business model and strategy or you are just unlucky, another casualty of the downturn, a downturn many ascribe to economic policies of the kind you seem to advocate.


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## mrypg9 (Apr 26, 2008)

JBODEN said:


> mrypg9: I smell ears burning!


Tak, pan Boden, masz pravdu. (Excuse spelling...)


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## maxd (Mar 22, 2009)

Mary just to clarify:

1) We are not going bankrupt. It was a bit off of you to twist that in people's minds. Rates in Spain have gone down for accommodation as they have in the rest of the world. Costs need to be cut in all businesses, so we need to downsize.

2) I am asking if we can Legally reduce the crazy spanish severance pay, which is the highest in europe. Is it not the duty of every business owner to reduce their costs Legally if they can.

3) We are not an internet operator. We operate buildings and individual apartments in 12 Europeans. So really a bricks and mortar business with over 500 properties managed.

Finally as for the full time contracts, they were done by the local manager without our knowledge. Saying "surely you ould have them on temporary contracts"just is rubbing salt into my wounds and makes me sound like a right numpty. Of course I am mad!

On the whole our business is still very successful.


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## maxd (Mar 22, 2009)

Aha just one more answer:

"They will get no redundancy and because they have been sacked they may not be eligible for some benefits. They will get no reference to help find another job. So how on earth can anyone 'want to be sacked'?????"

Spain does not work like that. You are still entitled to redundancy even if sacked, although I believe it CAN be reduced.


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## mrypg9 (Apr 26, 2008)

If anyone implied that your company was in danger of bankruptcy, you did, max. You posted three things on this forum: 1) that you had employed an inept Spanish manager who had taken on staff presumably with your approval but who it seems lacked elementary business knowledge 2) you were in a position which necessitated shedding staff 3) you asked for advice on how to -your words -'weasel out of this'. You also posted a load of piffle about socialism but that's irrelevant.
It's up to people to draw their own conclusions from what you told us, if they're interested enough.
Your business is carried out on the internet and involves managing other people's and your own mainly leasehold properties. It's a good field to be in but like all such businesses has its risks.
Such companies are easy to start up, especially in Eastern/Central Europe. A few £ thousands start-up goes a long way in countries where rents and costs are low and regulations of all kinds often lax. The problem is that your main selling point is low charges. And because it's so easy for competitors to enter an already crowded field, you can find yourself engaged in a downward spiral of cost cutting until you either win or go under.
You have been in business in your current form for around two years, as I read from an old post of yours. It's unfortunate for you that you entered a wider European market just at the start of the global meltdown. But business is about planning for bad as well as good times.
We took over a business that had been running for almost forty years, the kind of business that required a huge capital investment on plant, equipment and machinery of all kinds as well as the maintenance of extensive workshops and offices. We also had to employ highly qualified and experienced technicians. Men who can build HGVs and other specialised vehicles to order for various sectors of the economy don't come easily - or cheaply. Instead of using our profits for personal display, we reinvested to further strengthen our position in a competitive sector. We could have indulged in any luxury vehicle we desired - we had links and worked with F1 companies- but settled for more modest but good vehicles and this only because it was essential for our Company's image. 
Our experience has left us with different values than those of internet-based companies. We had bad times as well as good, of course, but we kept our skilled workforce because we value loyalty and it works both ways.
Im simply can't imagine that I or my fellow Directors would have publicly advertised our woes and asked for advice as to how to reduce benefits due to our employees.
And that's what you did.
I think enough has been said on this. And whilst I have all day to sit in my armchair or lie by my pool in Marbella, you have a business to run. I can't imagine any of our team spending time on internet forums whilst working - they were far too busy.


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