The Supreme Court orders the return of severance pay if the new company is ordered to readmit
Reinstatement can require repayment of compensation already received. That is the consequence of the contractor-transfer case reported by elEconomista in its account of a Supreme Court judgment dated 7 October 2026.
Reinstatement can require repayment of compensation already received. That is the consequence of the contractor-transfer case reported by elEconomista in its account of a Supreme Court judgment dated 7 October 2026.
A termination whose basis falls away
The outgoing employer had collectively dismissed the worker and paid the statutory compensation. The incoming contractor refused to take over the staff but was ultimately ordered to reinstate the worker after the dismissal was held void and a business transfer was found.
According to the report, the court treats reinstatement as preserving the continuity of the contract. The basis for compensation linked to termination therefore disappears, requiring full repayment.
The reasoning relies on undue payment under article 1895 of the Civil Code and articles 123.3 and 124.11 of the Law Regulating the Social Jurisdiction. Repayment is linked to the reinstatement judgment becoming final.
This information summarises the news report: the full judgment has not been checked here and its case-law identifier is not provided. It should not be extended to every change of contractor irrespective of the circumstances.
Source: elEconomista, 3 November 2026. Consulted on 4 November.
Related links
Fuentes
- eleconomista.es. Accessed 4 November 2026.
The specific data in this article come from the official sources cited.
