Seniority Pay, Thirteenth Month, Severance: What the Law Guarantees in France, Spain and Italy

The two things people are sure are legal rights, and are not

A seniority payment — a supplement that rises with years of service — is a bargaining outcome almost everywhere, not a statutory one. The French labour code contains no such payment; where one exists it is because a branch agreement, a company agreement, a unilateral commitment or your contract created it, and the rules for reducing or removing it are the rules for whichever of those it is, not the rules of the code. The Spanish statute is explicit in the other direction: the worker may have a right to a seniority payment on the terms fixed by collective agreement or individual contract. That sentence is a pointer to a document, not a promise of money. In Italy the seniority steps that so many payslips show are a feature of national collective agreements, which is why they differ so sharply between sectors.

The thirteenth month is the same story with one real exception. France has no statutory thirteenth month; Italy's tredicesima is a collective-agreement institution so universal that everyone treats it as law, which is a good reason to check your own agreement rather than assume. Spain is the exception that proves the point: article 31 of the workers' statute genuinely gives every employee two extraordinary payments a year, one at Christmas and one in a month fixed by collective agreement. But notice what the article does and does not do. It creates the entitlement and leaves the amount to bargaining, and it lets a collective agreement spread the payments across the twelve monthly instalments instead — which is why some Spanish payslips show fourteen payments a year and others show twelve that are quietly larger.

France: a modest statutory floor, and everything else negotiated

The French statutory dismissal indemnity is owed after eight months of continuous service and is calculated at a quarter of a month's pay for each of the first ten years and a third of a month for each year beyond, on a reference salary taken as whichever is more favourable of the average of the last twelve months or the average of the last three, with annual bonuses prorated. Twelve years at a reference salary of 3,000 euros a month therefore produces 9,500 euros: 7,500 for the first ten years and 2,000 for the last two. Eight years produces 6,000; twenty years produces 17,500.

That is a floor and often nothing like the actual figure. A branch agreement can and frequently does provide more, and where it does the more favourable provision applies. A negotiated termination has its own indemnity that cannot be less than the statutory one. And the amounts a labour court awards for a dismissal without real and serious cause are a separate matter with their own scale. The general shape is a modest legal minimum sitting under a much larger negotiated structure — which is exactly why reading only the code produces a number that surprises people when the real settlement arrives.

Spain: the number depends on why you were dismissed

Spanish severance is a function of the legal characterisation of the dismissal, and the gap between the categories is large. A dismissal on objective grounds carries 20 days of salary per year of service, prorated by months, capped at twelve monthly payments, and the money has to be made available at the same time as the written notice. A dismissal declared unfair carries 33 days per year, prorated by months, capped at twenty-four monthly payments, with the employer choosing between reinstating the worker and paying. The end of a fixed-term contract, except formative contracts and substitution contracts, carries the proportional part of twelve days per year of service.

Worked on the same twelve years and a monthly salary of 3,000 euros paid over fourteen instalments — so an annual gross of 42,000 and a daily salary of 115.07 — that is 27,616.44 euros for an objective dismissal and 45,567.12 for an unfair one, neither of which reaches its cap. The end of a fixed-term contract on the same figures would be 16,569.86. The lesson is that in Spain the negotiation after a dismissal is rarely about the multiplier, which the statute fixes; it is about which article you fall under, and that is a question about the reasons the employer wrote down.

Italy: not severance at all, but deferred pay

The Italian institution that everyone translates as severance is not one. Under article 2120 of the civil code, an employer sets aside for each employee, for each year of service, an amount equal to that year's remuneration divided by 13.5, and the accumulated fund excluding the current year's quota is revalued each 31 December by 1.5 % plus 75 % of the increase in the consumer price index for worker and employee households measured by the statistics institute. On a salary of 3,000 a month over thirteen payments — 39,000 a year — the annual accrual is 2,888.89 euros, about 7.41 % of pay, and twelve years produce 34,666.67 before any revaluation. The employee receives it on leaving. On any leaving: dismissal, resignation, retirement, the end of a fixed term.

That design changes what the word severance means. In France and Spain the payment is compensation for losing a job, so it is conditional on how you left; in Italy the payment is money you already earned and did not receive, so the reason you left is irrelevant. What Italy does have on top, for a dismissal held unlawful, is a separate indemnity, and this is the one figure in this article that cannot be stated as a fixed formula: the rigid calculation originally written into the 2015 growing-protections decree was struck down by the Constitutional Court in 2018, and the amount is now set by the judge within a statutory range that later rulings have continued to revisit. Look up the current bounds before relying on any number you find quoted.

Where to look, in the right order

Start with the collective agreement, not the statute, because in two of these three countries the statute is the smaller number and in all three it is the one that will not be improved by asking. Find the agreement's name on your payslip — it is normally printed there — then look for three things in it: any seniority scale and how it accrues, whether extra payments exist and whether they are prorated across the year, and whether it sets a dismissal indemnity above the statutory one. Only then read the statute, so that you know which of the two you are entitled to.

Two habits are worth adopting whatever your country. First, keep a copy of the payslip that shows the change every time a seniority step or an extra payment appears or moves, because when a dispute arises the question is what you were actually paid and when, not what the agreement says in the abstract. Second, when a job offer quotes an annual figure, ask how many instalments it is paid in and whether the extra payments are included in it. Fourteen payments of one amount and twelve of a larger one can be the same annual gross and are not the same monthly cash, and in Italy the number of instalments also changes the deferred-pay accrual, because that accrual is a fraction of the whole year's remuneration.

Frequently asked questions

My French payslip shows a seniority bonus. Can it be taken away?

It depends entirely on where it came from, which is why identifying the source matters more than the amount. A payment created by your individual contract cannot be removed without your agreement, because it is a contractual term. A payment created by a branch or company agreement changes when that agreement changes, through the procedure that agreement and the law provide. A payment created by a unilateral employer practice can be ended by the employer, but only by following the steps that apply to withdrawing a practice, which include informing the staff representatives and each employee individually and allowing a reasonable notice period. Find out which of the three you have before assuming it is safe.

Is Italian deferred pay better than French or Spanish severance?

It is different rather than better, and the difference cuts both ways. Its great advantage is certainty: you accrue it every year regardless of how the job ends, so resigning does not forfeit it and a short tenure still produces a proportional amount. Its disadvantage is that it is your own deferred money rather than compensation for a loss, so a worker who is dismissed unfairly receives no more of it than a colleague who resigned on good terms. In France and Spain the payment is compensation, so its size depends on the manner of departure — much larger where the dismissal is held unlawful, and nothing at all if you resign.

Do these payments count towards contributions and tax?

Extra monthly payments do, everywhere — they are ordinary pay and are treated as such, which is why in Spain the contribution base is the same whether the extra payments are paid twice a year or spread across twelve. Termination payments are the complicated case: they generally get a different and more favourable treatment, but the rules are detailed, they distinguish between the statutory portion and anything above it, and they change with budget legislation more often than the underlying labour law does. Before agreeing a figure in a settlement, ask specifically what will be withheld from it, because the gross and the net can be a long way apart.

Can I ask for my Italian deferred pay before I leave?

Article 2120 of the civil code provides for an advance under conditions it sets out itself, tied to length of service, to specified purposes and to limits on how many employees may take one in the same year. The conditions are precise and a collective agreement can improve them, so this is a case where the right question is put to the payroll department in writing rather than answered from a general article. Note also that the accrual can be directed to a supplementary pension fund instead of staying with the employer, which changes both what it earns and how it is taxed — a decision worth taking deliberately rather than by default.

Why is the Spanish figure so much larger than the French one?

Because the statutory floors were set with different jobs in mind. The French statutory indemnity is deliberately a minimum, expected to be improved by branch agreements, and the negotiated settlements that follow real dismissals are often considerably larger. Spain puts more of the total into the statute itself and less into bargaining, and prices the employer's characterisation of the dismissal directly — 20 days if the reason stands up, 33 if it does not. Comparing the two statutory numbers alone therefore overstates the difference; comparing what people actually receive requires knowing the collective agreement in the French case and the litigation outcome in the Spanish one.