Agreements after a dismissal: why signing on the same day can be costly
An agreement signed together with the dismissal letter, with no time to think it over and ambiguous wording, may not prevent a later claim.
In this case, the company went from agreeing to €20,000 to a court-set compensation of €64,267.03.
Closing an exit with a settlement agreement is a common way to avoid trial. But the employee signing does not always mean the matter is closed. Spain’s Supreme Court has reviewed what such an agreement needs in order to have a true releasing effect, and which details leave it without value.
The case: signed on the same day and not ratified afterwards
A sector manager at Leroy Merlin España, with fifteen years of service, received a disciplinary dismissal letter. That same day he signed an agreement in which the company acknowledged the dismissal was unfair and offered him compensation below the statutory amount, with a commitment to formalize it later at the administrative conciliation.
- September 2021Disciplinary dismissal letter and signing of the settlement agreement, on the same day.
- ConciliationThe employee does not ratify the agreement and files a claim for unfair dismissal.
- March 2022The Social Court of Tarragona upholds the agreement and dismisses the claim.
- February 2025The High Court of Justice of Catalonia (TSJ) denies the agreement a releasing effect and declares the dismissal unfair.
- June 2026The Supreme Court dismisses the company’s appeal and the TSJ judgment becomes final.
The company had to choose between reinstating the employee or paying the statutory compensation, deducting the €20,000 already paid.
Why the agreement didn’t work
The text looked complete: it acknowledged the dismissal was unfair, itemized the amounts, included a broad waiver of claims and stated that the employee had been able to seek advice. Even so, two things failed.
Simultaneity
Dismissal and signing coincided in time. The statement that the employee had been able to seek advice was not enough: the Supreme Court describes it as a statement that amounts to no more than a ritual expression, because there is no evidence he was given real time to think it over.
Ambiguity
One clause said the agreement took full effect from signing. Another made payment depend on what happened at the conciliation, “provided the employee agreed”. That contradiction worked against the company.
The six requirements the Supreme Court reviews
The judgment organizes the Chamber’s doctrine on when a settlement agreement ends the employment relationship and closes the door to further claims:
- A clear document, with an itemized breakdown of each amount, including compensation for the termination.
- A real payment or an unequivocal willingness to pay on the company’s part.
- A time margin between the decision to dismiss and the signing.
- Consent free of defects. It is better guaranteed if the person is assisted by employee representatives or has time to analyze the document.
- Compensation below the statutory amount is valid if it is the knowing counterpart of a genuine settlement.
- If it refers to the conciliation, it must be clear that the termination effect does not depend on what happens there.
The settlement will be fully releasing when there is a certain margin of time — not compatible with simultaneity — between the decision to dismiss and the signing of the document.
STS 532/2026, of 10 June, Social Chamber (appeal 2081/2025) — courtesy translationAnd the Supreme Court sums it up this way:
The private termination agreement contains a true settlement with releasing value when it identifies the dispute, sets out reciprocal concessions, shows the employee’s unequivocal acceptance, serves the purpose of avoiding litigation and is not subject to a suspensive condition of later ratification.
STS 532/2026, of 10 June, legal ground three — courtesy translationWhat the judgment does not say
It is worth reading it precisely so as not to draw conclusions that go too far:
The comparison with the contrast judgment is revealing. In that case, also involving the same company, the employee had one day to think about whether to sign, and the agreement made clear that its effectiveness did not depend on the conciliation. That agreement was held valid. The differences are subtle, but decisive.
How to make an exit agreement watertight
- Don’t present it together with the letter. Leave a reasonable margin between communicating the dismissal and signing, and keep a record of it.
- Itemize each item. Compensation, outstanding salary, holidays and extra pay, each one separately.
- Remove contradictions. If you refer to the conciliation, make it clear that the agreement is effective from signing no matter what happens afterwards.
- Make advice available. Offer the chance to be assisted by employee representatives or by a professional.
- Pay what was agreed. Actual payment reinforces the validity of the agreement.
Frequently asked questions
Is an agreement with compensation below the statutory amount valid?
Yes, if it responds to a genuine settlement: both parties give something up to avoid the risk of trial. What doesn’t work is a formality with no real margin for decision.
How much time should be left between the dismissal and the signing?
The judgment sets no period. It requires a margin that is not compatible with simultaneity and that allows the person to assess what they are signing.
Is it enough to include in the agreement that the employee has been able to seek advice?
No. The Supreme Court considers that sentence a ritual expression if there is no evidence that real time was given.
What happens if the employee does not ratify the agreement at the conciliation?
It depends on the wording. If the agreement makes clear that it is effective from signing, the lack of ratification does not void it on its own. If its effectiveness depends on the conciliation, it can be left without effect.
Official sources
- Judgment of the Supreme Court, Social Chamber, 532/2026, of 10 June (appeal 2081/2025), ECLI:ES:TS:2026:2660