Since May 1, 2025, in Spain, permanent disability has ceased to be a case of automatic termination of the employment contract. With the reform of article 49 of the Workers’ Statute, this termination is conditioned to a series of factors and subject to compliance with certain requirements, which we explain in this post.
On April 30, 2025, the much announced reform of article 49 of the Workers’ Statute was published in the Official State Gazette, through Law 2/2025, of April 29, amending the revised text of the Workers’ Statute Law, approved by Royal Legislative Decree 2/2015, of 23 October, on the termination of the employment contract due to permanent disability of workers, and the revised text of the General Social Security Law, approved by Royal Legislative Decree 8/2015, of October 30, on permanent disability.
This law is the response of the Spanish legislature to the conclusion reached by the High Court of Justice of the European Union (CJEU), in a judgment of January 18, 2024, analyzing two preliminary rulings raised by the High Court of Justice of the Balearic Islands.
In this judgment, the analysis of which is essential to understand the new regulation, the CJEU determined, supported by various passages in its judgment of February 10, 2022, that article 49.1 of the Workers’ Statute was contrary to article 5 of Council Directive 2000/78/EC of November 27, 2000, relating to the establishment of a general framework for equal treatment in employment and occupation, which provides for the need to implement reasonable accommodation for persons with disabilities to access or maintain employment, unless it would impose a disproportionate burden on the employer. Specifically, it considered that, for the employer to be able to terminate a contract of an employee who was declared to have a permanent disability arising during the employment relationship, it had to first make reasonable adjustments to enable the employee to maintain their job or demonstrate that such adjustments could constitute a disproportionate burden.
Consequently, the executive power of Spain initiated the procedures for the adaptation of the Workers’ Statute to this judgment, and the result has been Law 2/2025.
We summarize below the main issues to consider:
What is the most relevant change resulting from the reform? Cases of absolute, total permanent disability or severe disability cease to be grounds for automatic termination of the employment contract.
In what situations will permanent disability lead to the termination of the employment contract? The employment contract may be terminated by declaration of permanent disability in any of its degrees when the company is unable to make reasonable adjustments because it constitutes a disproportionate burden, when there is no vacant and available job in accordance with the professional profile and compatible with the new situation of the person, or when, if this possibility exists, the person rejects the change of job position properly proposed.
The rule introduces the concept of ‘disproportionate burden’, used by the CJEU in interpretation of article 5 of the aforementioned directive. However, it only clarifies when such a burden is considered to exist in companies with less than 25 employees. In these cases, it will be understood that the burden is disproportionate when the cost of adapting the job, without taking into account the part that may be covered with public aid or subsidies, exceeds the greater of the following amounts: (i) the compensation that corresponds to the employee in accordance with article 56.1 of the SW (compensation for unfair dismissal) or (ii) six months’ salary of the employee requesting the adaptation.
For the rest of the companies, the new regulation only specifies that to determine whether the burden is disproportionate, the cost of the adaptation measures will be taken into account in relation to (i) the size, (ii) the economic resources, (iii) the economic situation and (iv) the total turnover of the company, and that the burden will not be disproportionate when it is sufficiently mitigated by measures, public aid or subsidies.
What actions are derived for the company and the employee from their declaration of permanent disability? The employee has a period of ten calendar days from the date of notification of the resolution classifying the permanent disability to express in writing their desire to maintain the employment relationship. For its part, the company will have a maximum period of three months from the date of notification of said resolution to make reasonable adjustments or change the job position. When the adjustments would entail a disproportionate burden or there is no job vacancy, the company will have the same period for the termination of the employment contract, which must be communicated to the employee in writing and in a reasoned manner.
Another novelty of the reform is that, during the time in which reasonable accommodations or the change to a vacant and available position are resolved, the suspension of the employment relationship will be maintained.
What happens to the permanent disability pension if the termination is not appropriate due to adaptation to the position or relocation? The regulation provides that the permanent disability benefit will be suspended while the beneficiary performs the same job with adaptations or has been relocated to another that is incompatible with the receipt of the corresponding pension.
Many questions remain unanswered, such as, for example, what formulas for adapting the job will be valid, especially in cases of absolute permanent disability or severe disability; and to what extent may the company impose on the employee who expresses their desire to maintain the employment relationship. Therefore, we can affirm, without fear of being wrong, that a flood of controversies is approaching, which may clarify many queries that are not expressly answered by the new regulation, although they may also complicate the practical application of it. The matter has not ended here.
