Labor and Employment | Fourth quarter 2025

In this newsletter we highlight the main labor developments for the last quarter of 2025. This includes the (i) entry into force of the Spanish Sustainable Mobility Act; (ii) development of training employment contracts for the two contract types; (iii) update of contribution bases for 2026 and the temporary extension of the 2025 minimum wage; (iv) extension of the RED mechanism for the automotive sector and the new subsidy and training regime; (v) proposed royal decree on recording working hours; and (vi) stand-out case law from the last quarter of 2025. We also provide our recent guides on labor litigation, company collective bargaining and artificial intelligence (AI) literacy. 

Sustainable Mobility Act

• The anticipated Act 9/2025 of December 3, on Sustainable Mobility was published in the Official Gazette of the Spanish State ("BOE") on December 4. It entered into force on December 5 and introduced a comprehensive regulatory framework to promote sustainable mobility in Spain. One of the main obligations introduced is that companies that have workplaces with over 200 employees or have 100 employees per shift have 24 months to implement a sustainable mobility plan at work. Large workplaces,e.g., business parks, logistics centers, hospitals and shopping centers must regularly approve and review their sustainable mobility plans, designating a mobility manager.  It also introduced the general obligation to negotiate collective bargaining agreement measures to promote sustainable mobility at work. More details

Training employment contracts: new regulation and practical application

• Royal Decree 1065/2025 of November 26, 2025 (published in the BOE of November 27) develops the training employment contracts regulation, as established in article 11 of the Workers Statute (WS). Training contracts are split into two types of temporary contract: (i) the alternate training contract, which makes paid work compatible with occupational training, university studies, or programs from the Catalog of Training Specialties; and (ii) the work experience contract, aimed at acquiring experience appropriate to the level of studies.  Both offer employment relationships and are distinguished from the cases of interns and non-employment internships, due to the absence of an employment contract in these cases. More details

Extension of minimum wage and new social security contributions in 2026

• Royal Decree-Law 16/2025 of December 23 (BOE of December 24) updates—with effect from January 1, 2026—pension limits, maximum and minimum contribution bases for the social security system, the Intergenerational Equity Mechanism, and the additional solidarity contribution, as well as incorporating into the General Social Security Act, the premium payment for work-related contingencies, updated according to the 2025 Spanish National Classification of Economic Activities. The minimum wage from 2025 has also been temporarily extended until the 2026 minimum wage is approved (pending approval as of this newsletter’s publication date), and the new year also sees the extension of the restrictions on objective dismissals associated with public aid and temporary labor force adjustments linked to Ukraine. All of this will impact salary costs and social security contributions for companies throughout 2026. More details

Changes to employment, training, the RED mechanism and the registry of collective agreements

• Toward the end of 2025, the BOE published several provisions that updated the framework of active employment policies and workplace training. These had immediate effects on workforce management, the use of internal flexibility mechanisms and the financing of training. In particular, the RED mechanism was extended for the automotive industry until June 2026; a new subsidy and training regime has been established, scheduled to begin in February 2026; new statistical variables have been approved in the collective bargaining agreement registry; and the economic modules for employment training have been updated. More details

Proposed royal decree on recording working hours in Spain 

• After the unsuccessful attempt to pass the reform that sought to reduce the working schedule in Spain to 37.5 hours per week, tighten control of the working hours register and strengthen the right to digital disconnection, in October 2025, the government approved the proposed Royal Decree on recording working hours, that will implement the obligation to record working hours currently provided for in article 34.9 of the WS. The draft royal decree proposes that the recording be carried out digitally, ensuring data traceability and unalterability, and establishes a mandatory minimum content, as well as access and consultation for employees and their legal representatives and remote access for the Labor Inspectorate. It also establishes that companies must draft a document and record management protocol, including a regular evaluation system. More details

Significants judgments

• Spanish Supreme Court ("SC") confirms validity of link theory
  
  The SC’s Conflicts of Jurisdiction Division has resolved a conflict between the labor courts and the civil courts over the dismissal of a senior executive who, in addition and simultaneously to that position, was a member of the board of directors of three companies of a business group. The order by the SC (Chamber for Conflicts of Jurisdiction), no. 12/2025, of November 25, 2025 (ECLI:ES:TS:2025:10797A) assigns the competence to the commercial courts and, in doing so, confirms the validity of the link theory when senior management duties and management body duties coincide. More details

• Digital disconnection policy does not have to be negotiated in statutory collective agreements
  
  Under SC (Labor Division) judgment no. 1041/2025, of November 11 (ECLI:ES:TS:2025:5123), the right to disconnect must be subject to the provisions of the collective bargaining agreement and, in their absence, to any agreements reached with the workforce's legal representation. The company, after a meeting with the legal representation, must draft an internal policy defining the training modalities and actions, particularly focusing on remote working. In the case, the applicable sectoral collective agreement (consultancy) recognizes the right to disconnection in legal terms and in line with the company policies. This reinforces the compatibility of the collective bargaining agreements framework and the internal policies drafted following a meeting with the workforce's legal representation.

• Salary increase clauses and negative CPI: unified doctrine
  
  SC (plenary session of the Labor Division) judgment no. 1026/2025, of October 23 (ECLI:ES:TS:2025:4930) unifies the doctrine on the treatment of negative CPI in the salary review clauses of collective bargaining agreements. The ruling resolves an ongoing dispute in collective bargaining: whether, when there is no express provision, a negative CPI can reduce salaries or must be considered zero in the salary review formula. More details

• Reporting and consultation obligations with European Works Council (“EWS”) regarding transnational issues
  
  In judgment no. 966/2025, of October 17 (ECLI:ES:TS:2025:4767), the SC’s Labor Division clarifies the scope of the information and consultation proceedings with EWSs in the case of transnational issues arising from restructuring processes in an international business group during the pandemic. The SC confirms the transnational nature of the situation raised in the case, declaring that the company must not only inform but also consult the EWS. The judgment defines the concept of “transnational issue” in line with article 3.1.10 Act 10/1997 and with Directive 2009/38/EC: transnational issues are those that affect the group as a whole or, at least, two European Economic Area states, including those that, due to their scope and impact, are significant for European workers or involve activity transfers between states. Regarding the content of the rights, Act 10/1997 requires “appropriate” information that facilitates assessment of the impact and the preparation of consultations, and a “consultation” that facilitates the issuing of an opinion in a reasonable period.

• Procedure for standardizing applicable collective bargaining agreements
  
  According to SC (Labor Division) judgment no. 1244/2025 of December 11 (ECLI:ES:TS:2025:5748), it is lawful to implement a change of collective bargaining agreement through the procedure of substantial modifications to working conditions (article 41 WS) when it is intended to fully incorporate collective agreements into the applicable agreement for each activity and not make them inapplicable—in line with the SC’s doctrine—providing there is homogeneous activity and cause, as well as real negotiations with traceability.

• Paid leave for hospitalization, care and death must be calculated in working days
  
  SC (Labor Division) judgment no. 1084/2025 of November 13, (ECLI:ES:TS:2025:5330) resolved a dispute over the third collective bargaining agreement of the contact center sector (2023), which established the calculation in calendar days of paid leave for hospitalization/care and for the death of family members.  The SC confirms that the five days of paid leave for hospitalization/care and the two days for death must be calculated in working days, not calendar days, in line with a purposive interpretation of article 37.3 WS and Directive 2019/1158. The agreement can only improve the minimum legal requirements, and calculating in calendar days does not constitute an improvement when public holidays and rest periods are involved. This doctrine presents the challenge of proving that the situation of need persists throughout the duration of the leave, an issue that has started to cause tension based on the Spanish Court of Appeals’ judgment no. 131/2025 of October 6 (ECLI:ES:AN:2025:4068), according to which the need for leave is not cut short when the prescribed rest period ends, in cases of surgical intervention without hospitalization. 

Cuatrecasas trends guide

• Labor litigation trends in Spain (2025)
  
  This guide provides companies with an overview of developments in labor litigation in Spain from January to September 2025, and their impact on legal risk governance. Based on official data and technical criteria, the guide combines statistical analysis and examination of procedural changes introduced by Spanish Act 1/2025, to translate them into early trial and negotiation decisions, providing plans of action for company management, human resources and in-house legal departments. Access the guide here

• Keys for company collective bargaining in 2025
  
  This guide summarizes in 10 practical tips, how to negotiate useful, durable and defensible company agreements. Based on official data and real-world experience, it addresses the regulatory context following the reforms of 2021 and 2024, and current priorities: working hours, professional classification, remuneration, work-life balance, remote working, and equality. It provides criteria for organizing flexibility, reducing the number of lawsuits, and stabilizing costs. Access the guide here

• AI literacy obligation in European Union (EU)
  
  The EU’s AI Act (2024) imposes the obligation on companies to ensure that all individuals using AI on their behalf have a sufficient level of AI literacy from February 2, 2025. This guide analyzes the subjective and objective scope of the obligation, the internal document requirements, the oversight and penalty system (applicable from August 2026), and the support resources offered by the European Commission. Access the guide here

For further information, please contact our Knowledge and Innovation Group lawyers or your regular contact person at Cuatrecasas.