Spanish courts have begun to rule on whether AI can justify an objective dismissal, offering their resolutions essential criteria for Human Resources departments planning digital transformation processes with an impact on their workforce.
Artificial intelligence has ceased to be a theoretical debate and has become a factor that is already conditioning termination decisions in companies.
Article 52.c) of the Workers’ Statute allows employment contracts to be terminated when economic, technical, organisational or productive reasons concur. The implementation of AI can fit into these causes when it involves a significant alteration of the production process. However, judicial doctrine has been demanding rigorous proof that the decision responds to a real business need; that is, AI might not be, on its own, an autonomous cause for dismissal.
In this regard, the Labor Chamber of the High Court of Justice of Castilla y León issued, on September 15, 2025, the judgment that expressly recognises the impact of AI as a relevant factor in the concurrence of objective grounds for dismissal.
In the case under study, it was established that the net turnover of the company in question, dedicated to translation services, had been reducing each year, mainly due to the situation of the sector, whose competition had increased in recent years due to automatic internet translators and artificial intelligence. Specifically, the existence of economic losses was proven, as well as a continuous decrease in sales volume. In short, clients had stopped hiring their translation services, as they had started to carry out these tasks themselves using different machine translation tools.
On appeal, the court confirmed the validity of the objective dismissal based on the negative economic situation of the company, due to a real decline in activity and the technological transformation of the sector in which it operated.
The ruling sets out a key idea: AI can justify a dismissal when it has a real, measurable and accredited economic impact. However, it must be borne in mind that it is not simply a matter of the company implementing AI, but of the market being transformed by the effect of AI and this generates losses or reduction in revenue; in other words, the simple improvement of efficiency or the direct replacement of an employee by a machine to save costs, without the existence of an economic or organisational need being proven, would not constitute sufficient cause for the valid termination of the employment contract.
Taking into account the aforementioned judgment, as well as other possible judicial pronouncements that may soon be issued on this issue, companies must bear in mind a series of requirements when assessing the possible termination of an employment contract: existence of a real organizational or economic change, reduction or effective disappearance of functions, evidentiary rigor with objective and comparable data, direct relationship between the IA and the amortization of the post and, finally, that the selection of the affected worker obeys objective, reasonable and creditable criteria.
In short, although it is still a new subject, AI can be a relevant factor in the concurrence of objective causes for dismissal, but, as in any dismissal, rigorous justification and an individualized analysis are required.
