As mentioned earlier, special rules apply to certain categories of employee, including most notably senior executives and their special labor relationships, which are governed by Royal Decree 1382/1985, of August 1.

A senior executive is an employee who has broad management authority in relation to the company’s general objectives and exercises that authority independently and with full responsibility, reporting only to the company’s governing body.

The terms of employment for such executives are subject to fewer constraints than those for ordinary employees.

As a general rule, the parties (employer and senior executive) have a wide margin of maneuver in defining their relationship by contract.

Senior executives can be dismissed without cause (i.e., contractual withdrawal by employer), serving notice at least 3 months in advance, in which case they are entitled to an indemnity of seven days’ pay per year worked, up to a maximum of six months’ pay, or such other indemnity as may have been agreed on.

The senior executive may freely cancel his contract serving at least three months of advance notice.

Certain causes for cancellation are classified which entitle the senior executive to the agreed indemnity and, failing an agreement, that established for the event of cancellation of the contract unilaterally by the employer.

Alternatively, a senior executive can be dismissed on any of the grounds stipulated in general labor legislation (objective causes, disciplinary reasons).

If the dismissal is adjudged to be unjustified, the senior executive is entitled to 20 days’ pay per year worked, up to a maximum of 12 months’ pay, unless otherwise agreed to by contract.

It should be noted that the statutory minimum indemnity for senior executives is lower than that for ordinary employees. However, in practice senior executive contracts usually provide for indemnity payments that are higher than the statutory minimum.