Employment Spain Newsletter December
Below, we share a summary of the main legislative developments with relevance to labour law approved by the legislator in the final stretch of 2024 and the beginning of 2025 in case anyone had missed them during the Christmas holidays and the resulting digital disconnection. We also include a summary of the recent judgements of the Spanish courts that we consider to be of interest at the beginning of the year.
New legislation
1. Organic Law 1/2025, of 2 January, on measures for the efficiency of the Public Justice Service
On 3 January, Organic Law 1/2025, of 2 January, on measures for the efficiency of the Public Justice Service ("Ley Orgánica 1/2025, de 2 de enero, de medidas en materia de eficiencia del Servicio Público de Justicia", hereinafter, "LO 1/2025") was published, which is of fundamental interest and will have a major impact on the Spanish judicial system. LO 1/2025 will enter into force three months after its publication, i.e. on 3 April 2025.
Without prejudice to the amendments it makes to the Law Regulating the Labour Jurisdiction ("Ley Reguladora de la Jurisdicción Social") and the Spanish Civil Procedure Act ("Ley de Enjuiciamiento Civil"), which undoubtedly deserve a separate analysis, the twenty-sixth final provision of LO 1/2025 introduces significant changes to the Workers' Statute ("Estatuto de los Trabajadores", hereinafter, “WS”):
a) It is determined that the employee may request the termination of the employment agreement (with the right to compensation for unfair dismissal) for non-payment or continuous delays in salary, clarifying that the delay occurs in the following three circumstances: (i) if the payment is made more than fifteen days after the established date; (ii) if, within a period of one year, the employee is owed three full monthly payments of salary or (iii) if there are delays for six months, although these do not have to be consecutive.
b) The technical error in the Parity Law ("Ley de Paridad") is corrected and the cases of dismissal of employees who have requested or are taking (i) paid leave under article 37.3.b.) WS or (ii) an adjustment of working hours under article 34.8 WS are once again included as cases of null dismissal.
The above amendments to the WS will enter into force three months after their publication, i.e. on 3 April 2025.
2. Extension of the minimum wage from 2024 to 2025 and updating of maximum and minimum contribution bases
On 24 December 2024, was published the Royal Decree-Law 9/2024 of 23 December, adopting urgent economic, tax, transport and Social Security measures ("Real Decreto-ley 9/2024, de 23 de diciembre, por el que se adoptan medidas urgentes en materia económica, tributaria, de transporte y de Seguridad Social"), which came into force on 25 December 2024. The aforementioned Royal Decree-Law contains some relevant novelties, of which we highlight the following:
a) As was the case in 2024, we will have to wait for the outcome of the negotiations between the Ministry of Employment and the social agents to know the amount of the minimum wage for 2025, which will take effect retroactively from 1 January;
b) Until the General State Budget ("Presupuestos Generales del Estado") is approved, the minimum contribution bases are automatically adjusted by the increase in the minimum wage plus one sixth, while the maximum bases are adjusted by the pension revaluation percentage plus a fixed increase of 1.2 percentage points;
c) The Intergenerational Equity Mechanism ("Mecanismo de Equidad Intergeneracional") will increase from 0.70% in 2024 to 0.80% (0.67% to be paid by the company and 0.13% by the employee); and
d) The obligation set out in article 19 bis of the General Social Security Act ("Ley General de la Seguridad Social", hereinafter, "GSSL") is included, consisting of the introduction of a new additional contribution known as the ‘solidarity contribution’. By virtue of this contribution, employees whose salaries exceed the maximum contribution base established by the Social Security (for the year 2025, it will be 4,909 euros per month or, in other words, 58,908 euros per year, after being revalued by 4% with respect to 2024), will have to make an additional contribution. For a more detailed analysis, see the following link.
3. Royal Decree-Law 11/2024, of 23 December, to improve the compatibility of retirement pensions with an employment
On 24 December 2024, Royal Decree-Law 11/2024, of 23 December, was published to improve the compatibility of retirement pensions with an employment, which will come into force on 1 April 2025. Among other issues, the regulation introduces the following new features:
a) Active retirement: the requirement to accredit sufficient contributions for the pension to reach 100% of the regulatory base is eliminated, and it is sufficient to make the necessary contributions to qualify for a retirement pension.
b) Partial retirement: (i) the reduction of working hours is extended to a maximum of 75% for those who partially retire having reached the ordinary retirement age; (ii) the possibility of applying for early retirement is extended from two to three years before the applicable retirement age; (iii) in cases where access to partial retirement is earlier than two years before the ordinary retirement age, the reduction in working hours during the first year will be between 20% and 33%; and (iv) employment relief agreements will be indefinite and full-time, and must be maintained for at least two years after the end of partial retirement.
4. Incompatibility between Absolute Permanent Disability and Severe Disability and work activity
On 21 December 2024, Law 7/2024 of 20 December was published, having entered into force on 22 December 2024, which its thirteenth final provision amends article 198.2 GSSL and implements Management Criteria 11/2024 of the Spanish National Social Security Institute ("Instituto Nacional de la Seguridad Social", hereinafter "SNSSI"). Specifically, it specifies that, if the pensioner carries out work or activity that implies inclusion in any Social Security scheme, the managing body must suspend payment of his pension (which will be resumed when he ceases to work or activity), but an exception is introduced, relating to the severe disability supplement, which will not be subject to suspension.
5. Organic Law 5/2024, of 11 November, on the Right to Defence
On 14 November, Organic Law 5/2024 of 11 December on the Right to Defence ("Ley Orgánica 5/2024, de 11 de diciembre, del Derecho de Defensa") was published, which came into force on 4 December 2024. In labour matters, it introduces the following new features:
a) It strengthens the right of protection of employees against any negative repercussions they may suffer as a result of having taken any action (carried out before the company or before an administrative or judicial action) aimed at claiming their labour rights; and
b) Extends the guarantee of indemnity to the spouse, common-law partner and relatives up to the second degree of consanguinity or affinity of the employee who work in the same company, even if they have not taken any action to exercise their rights.
6. The new organ donation leave
In addition to the "weather leave" that allows employees to take up to four paid days off work in the event of a weather emergency, which has been in force since 30 November last year, another new paid leave for living organ donation will enter into force on 1 March 2025.
This leave, introduced by Law 6/2024 of 20 December for the improvement of the protection of living organ or tissue donors for subsequent transplantation ("Ley 6/2024, de 20 de diciembre, para la mejora de la protección de las personas donantes en vivo de órganos o tejidos para su posterior trasplante"), consists of paid leave for the time necessary to carry out the preparatory acts for organ and tissue donation (medical examinations, clinical examinations necessary to determine the suitability of donors, giving consent, etc.). Its purpose is to cover the necessary absences linked to the donation that are not covered by Temporary Incapacity.
Judgements
1. Special family household service staff shall be entitled to have a time record of their working day
Ruling of 19 December 2024 of the Court of Justice of the European Union, case C-531/23 (Loredas).
The Court of Justice of the European Union ("CJEU") has decided a question referred for a preliminary ruling by the High Court of Justice (hereinafter, "HCJ") of the Basque Country in a case concerning the dismissal of a domestic worker.
In particular, the question referred for a preliminary ruling concerned whether the exemption from the obligation to record the actual time worked for domestic employees established by Royal Decree 1620/2011 is contrary to European Union law.
The CJEU finds that it is, as it deprives domestic employees of the right to establish reliably the number of hours worked. It concludes that national legislation or administrative practice which allows the absence of a daily record for this group of employees with a special employment relationship manifestly infringes Directive 2003/88/EC of the European Parliament and of the Council of 4 November 2003 concerning certain aspects of the organisation of working time.
2. Entitlement of single parents to up to 26 weeks of parental leave for the birth of a child
Ruling 140/2024, of the Spanish Constitutional Court, 6 November 2024.
The Plenary Session of the Constitutional Court (hereinafter, the "CC") declared article 48.4 WS and article 177 GSSL unconstitutional for not providing for the possibility of extending leave due to child birth beyond sixteen weeks for biological mothers in single-parent families. Taking into account the interests of the children, it is considered that the lack of specific regulation for this type of family union cannot discriminate against children born into single-parent families, who enjoy a shorter period of care for their parents than those born into two-parent families.
The CC concludes that, in single-parent families, the leave due to child birth of sixteen weeks for the biological mother must be added to the ten weeks that would correspond to the other parent (as the first six weeks are excluded).
3. The statutory severance pay for unfair dismissal cannot be increased in court
Ruling 1350/2024, of the Spanish Supreme Court, Social Chamber, of 19 December 2024.
The Social Chamber of the Spanish Supreme Court (hereinafter, the "SC") ruled on the possibility of recognising a higher compensation for unfair dismissal than that legally established on the basis of the alleged violation of Article 10 of ILO Convention 158, which requires that the compensation must be adequate.
The SC dismissed the appeal, arguing that the provisions of article 56 WS for unfair dismissals comply with the provisions of article 10 of the aforementioned ILO Convention 158, citing several reasons, among which the following should be highlighted: (i) the SC has stated that the compensation set by law is adequate, (ii) article 12 of ILO Convention 158 also refers to salary and seniority, as does article 56 WS, and (iii) article 56 WS offers legal certainty and uniformity.
This ruling is relevant, as it overturns the doctrine of the HCJ of Catalonia recognising additional compensation to that legally established. However, it cannot be overlooked that Article 24 of the European Social Charter has not been taken into account since, in this case, the SC analyses a case of dismissal prior to the entry into force of the aforementioned regulation.
4. Travelling to and from the first customer's home does not count as working time
Ruling 1305/2024, of the Spanish Supreme Court, Social Chamber, of 27 November 2024.
In the present case, the aim was to clarify whether the time spent by employees travelling to the office of their first client, as well as the time spent returning to their own home, should be counted as actual working time.
The SC considers that the European doctrine set out in the ruling of the CJEU of 10 September 2015, C-226/14, (Tyco case), is not applicable, since, in the aforementioned case, it was determined that the time spent travelling from the home to the workplaces of clients and vice versa should be considered as working time on the basis that: (i) there was the elimination of a company's provincial offices, so that the employees had no fixed workplace to go to before going to clients and (ii) the aforementioned change caused a greater distance to be travelled by the employees.
However, in the present case, the workplaces have not disappeared, so the employees continue to have a fixed workplace, which means that these changes in the usual working dynamics have not been triggered.
The ruling is relevant because it reinforces the idea that working time should be the time during which the employee is actually at his or her job, carrying out his or her usual duties.
5. It is not compulsory to include in the remuneration registers data that would make it possible to know the individual wages of the employees
Ruling 1302/2024, of the Spanish Supreme Court, Social Chamber, of 21 November 2024.
Following a collective dispute brought by two trade unions against the company requesting, inter alia, that the remuneration data of the entire workforce be made available to the legal representatives of the employees, the SC considers that the company's remuneration register must not contain information that makes it possible to identify the individual remuneration of the employees. In this regard, it stresses that the purpose of the pay register is to reflect only the average values, differentiated by sex and grouped according to jobs of equal value.
Moreover, in accordance with article 8.1 of the Organic Law on Data Protection and the Guarantee of Digital Rights, for data processing to be based on compliance with a legal obligation, there must be a regulation with the status of a law that requires so. However, the SC considers that there is no rule in current law that clearly obliges the inclusion in the salary register of data that makes it possible to identify the individual remuneration of each employee.
6. The registration of an Equality Plan is endorsed if within three months as from its application date no express resolution is granted (positive administrative silence)
Ruling 1285/2024, of the Supreme Court, Social Chamber, of 20 November 2024.
In those situations in which the blockage in the negotiation of an equality plan has been accredited and this must be attributed exclusively to the impossibility or lack of response from the trade unions necessary for its elaboration, the positive silence operates, establishing the period of three months. This ruling confirms the doctrine previously established by the SC in its ruling 545/2024 of 11 April.
This current case law seems to be intended to solve the lack of participation of the social agents in the negotiation and to prevent companies from not having a registered equality plan for reasons beyond their control.
7. It is sufficient to make the working time registers available to the employees' legal representatives (ELR) on a monthly basis
Ruling 168/2024, of the Spanish National High Court, Social Chamber, of 9 December 2024.
A trade union, in a collective dispute claim, asks BBVA for immediate access at any time to the staff working time register.
The Spanish National High Court ("Audiencia Nacional") made an exhaustive interpretation of the literal wording of article 34.9 ET, which regulates the working time register, concluding that it does not imply an additional obligation to make the working time register available to the employees' representatives on a monthly basis, and therefore dismissed the trade union's request.
Likewise, the National Court once again emphasised the non-binding nature of the technical criteria drawn up by the Labour and Social Security Inspectorate ("Inspección de Trabajo y Seguridad Social") and of the guide on the working time register drawn up by the Ministry of Employment.
8. Dismissal for supervening unsuitability requires the employer to prove that the employee's job cannot be adapted or that there are no reasonable possibilities of relocation within the company
Ruling 5014/2024, of the High Court of Justice of Galicia, Social Chamber, of 6 November 2024.
In this case, an employee was dismissed after suffering a work accident, having been declared unfit for her job by the medical report of the external prevention service. The employee appealed this decision, claiming that she was dismissed because of her illness and requesting the nullity of the dismissal.
The ruling determines that the burden of proof falls on the employer, who must prove not only that the employee is unfit, but also that it is impossible to adapt the job to her limitations or to relocate her within the company. Therefore, the aforementioned report from the health and safety services is not enough, but it must be also proven that it is not possible to adapt the employee's office to his/her limitations.
On the basis of the above, the HCJ of Galicia declared the dismissal null and void for discrimination on the grounds of illness and, in addition, the employee was awarded a damages compensation for the breach of fundamental rights.
9. The collective agreement applicable to subcontractors is that of the main company's activity (application of the Omnitel doctrine)
Ruling 873/2024, of the High Court of Justice of Madrid, of 6 November 2024.
The relevance of this ruling lies in the application of the European doctrine established asa result of the ruling of the CJEU of 24 October 2024, C-441/23, (Omnitel case), which provides that the same salary conditions must be applied to the staff of contracting companies as they would have received if they had been directly hired by the company to occupy the same position.
As a result, the HCJ of Madrid declares that caretakers who are hired through a contracting company must be subject to the collective agreement that they would have received if they had been hired directly by the owner of the building.
10. It is not possible to request a reduction in working hours in order to protect oneself against possible dismissal
Ruling 634/2024, of the High Court of Justice of Madrid, of 18 October 2024.
An employee requested, the day after being informed that she was going to be dismissed for objective and organisational grounds, a reduction in the working day to look after a child under 12 years of age.
The HCJ of Madrid upheld the ruling of the lower court, which found that the request for a reduction in working hours was a fraudulent act whose sole purpose was to avoid the dismissal announced the day before, but eliminated the fine for procedural recklessness that had been imposed on the employee.
This ruling is particularly relevant in the light of the recent obligation to give employees a prior hearing in the event of disciplinary dismissal established in the SC ruling of 18 November 2024, which has already been the subject of a separate analysis. For a more detailed analysis, see the following link.
To keep on the radar
1. Social agreement for the reduction of working hours
On 20 December 2024, the social agreement for the reduction of working hours was signed in the framework of the dialogue between, on the one hand, the Ministry of Employement and Social Economy and the trade unions, Unión General de Trabajadores and Comisiones Obreras and, on the other hand, the Spanish Confederation of Business Organisations ("Confederación Española de Organizaciones Empresariales", hereinafter, "SCBO"). It should be noted that the SCBO did not participate in this signature, thus showing its disapproval of the project.
This agreement also includes the Bill on the Reduction of the Maximum Duration of the Ordinary Working Day, the Working Day Register and the Right to Digital Disconnection ("Anteproyecto de Ley de Reducción de la Duración Máxima de la Jornada Ordinaria de Trabajo, el Registro de Jornada y el Derecho a la Desconexión Digital").
Although it will have to await approval by the Council of Ministers and subsequent publication in the Spanish Official Gazzette ("Boletín Oficial del Estado") of the regulatory development, the following measures, among others, are included: (i) the reduction of the maximum working day from 40 to 37.5 hours without a reduction in salary; (ii) the tightening of the penalty regime for infringements in the area of the working day register and (iii) the reinforcement of measures to guarantee the right to digital disconnection.
With regard to the deadline, the First Transitional Provision of the Bill includes that the negotiating committees of collective agreements that include working hours in excess of 37.5 hours per week will have until 31 December 2025 to make the necessary adaptations.
2. Management Criteria 140/2024 of the National Social Security Institute on the granting of childbirth allowance to single-parent families
Following the publication of SC's ruling 140/2024 (analysed above), the SNSSI has issued Management Criteria 20/2024: Duration of the childbirth and childcare benefit in cases of single-parent families.
Its most relevant aspects, which complement the aforementioned court ruling, are as follows: (i) the extension of the entitlement by an additional ten weeks is corroborated; (ii) it firmly establishes those situations in which this entitlement will be recognised, which are: (a) applications made after the publication of the ruling, (b) those pending or refused, but which are still within the claim period or (c) that the claim has already been filed and (iii) the effects will not extend to final decisions or court rulings that are res judicata.
