Labor and Employment | Second Quarter 2025

In this newsletter, we provide a summary of the most relevant developments in legislation and case law in the second quarter of 2025 in Spain. We will cover in detail the recent amendments regarding individual terminations of employment relationships, collective dismissals, working time, leaves of absence, remuneration, remote working and suspension of contracts due to maternity. We also include practical recommendations regarding work management in the case of weather alerts and an updated follow up of the reform process of the working day.

Please read our summary, which we have specially designed to facilitate strategic decision making at your company. 

Labor measures for managing the heatwave

• Given the high temperatures and the issue of weather alerts, companies must be aware of their corresponding obligations in relation to prevention of health and safety risks and the protection of workers’ safety. Therefore, companies must anticipate events, have action plans implemented and record all the measures adopted.

Indiviadual termination of employment contract

Restrictions on terminating employment contracts due to permanent incapacity

• Act 2/2025 has amended the Workers Statute, effective from May 1, 2025, abolishing the possibility of the automatic termination of the employment contract based on a declaration of permanent incapacity, whether absolute permanent disability or major disability, when (i) the worker has expressed an interest in continuing with the employment relationship, and (ii) it is possible to reasonably adapt the provision of work to the worker’s residual capacities. More details

Contract termination due to employer breach

• Since April 3, 2025, Act 1/2025, regarding termination of the employment contract at the request of the worker with right to compensation, expressly establishes that there is a delay in the payment of wages as justification for termination if the payment date exceeds the 15-day deadline. It also establishes that there are grounds for termination if the employer owes three full monthly payments in one year or if there are delays in six months, even if not consecutive. The act also abolishes the possibility for the courts to consider mitigating circumstances such as the low amount of the debt and makes it possible to consider other outstanding payments or serious delays in payments to justify the compensated termination.

 Compensation for unfair dismissal 

• The European Committee of Social Rights has settled the claim submitted by the Workers’ Commissions, concluding that the compensation for dismissal established under Spanish law does not guarantee sufficient compensation or compensation that has a dissuasive effect, thus breaching the European Social Charter. This decision reaffirms what had already been established regarding the claim submitted by the Spanish General Union of Workers. 

Collective dismissal

Business groups

• The judgment by the Court of Appeals of January 21, 2025, on collective dismissals, marks a milestone in the management of these processes in business groups. It highlights the importance of substantiating and rigorously recording the grounds justifying a dismissal, providing clear criteria for its correct processing. Also, it is one of the first rulings on this matter that addresses the consequences of omitting the obligation to give notice of six months established in the Sixth Additional Provision of Royal Decree 1483/2012. 

Contribution to the Public Treasury (CPT)

• The CPT limitation period (four years) does not necessarily start on the date of the labor authority’s certificate sent to the State Public Employment Service, but rather when the authorities have all the data necessary to settle the contribution, because the start date of the period cannot depend on administrative delays or on the authority’s unilateral will. This is what the Supreme Court stated, repeating doctrine, in its judgment of April 3, 2025.

Leave of absence 

• In its judgment of March 12, 2025, the Supreme Court declares that workers on leave of absence have preference to recover their job position over temporary workers that could become permanent workers under a collective agreement, because the preferential right to reinstatement of workers on leave of absence, although subject to the existence of vacancies, is a rule under law and has priority over collective bargaining rules.  

Remuneration

• Supreme Court judgment of April 9, 2025 considers it valid to make the vesting of stock options subject to the worker’s permanency during the entire vesting period, unless the contract is terminated due to the employer’s unilateral decision on a date close to the end of the vesting period. 

Contract suspension due to maternity

• Following the Constitutional Court’s judgments at the end of 2024 (judgment of November 6, 2024, and subsequent) in which it declares the right of single-parent families to increase the number of weeks of contract suspension due to childbirth, the Supreme Court, in its judgment of May 8, 2025, has unified doctrine concerning contract suspension for maternity in the case of single-parent families, which is increased by 10 weeks to 26 weeks. 

Working time

• According to the Supreme Court (judgment of April 21, 2025), in principle, time spent traveling from the client’s premises to home after finishing the working day is not considered working time, unless there are exceptional circumstances.

Remote working

• The Supreme Court has validated (judgment of April 2, 2025) that the remote work contract can oblige workers to provide their email address and telephone number, provided this is necessary for contract performance and is limited to emergency situations, without breaching the data protection rules. 

Sustainable mobility

• Decree 132/2024, approving the Air Quality Plan, Horizon 2027, the short-term action plan for high levels of air pollution and the regulatory determinations to achieve air quality objectives, published in Catalonia, makes it mandatory for certain companies, depending on the number of workers at the work center (500 or 200 depending on the location of the center), to prepare sustainable mobility plans before August 9, 2025, promoting more efficient and environmentally friendly travel. More details

Future labor reform

• The parliamentary processing of the reform concerning maximum working hours, working day register and digital disconnection continues underway, with amendments submitted to the wording. Considering the procedure’s time frame, the final wording is not likely to be approved in the short term. More details

For more information, please contact our Knowledge and Innovation Area specialists.