Spain: The permanent incapacity ceases to be grounds for automatic termination of the employment contract from May 1, 2025

Law 2/2025, of April 29, 2025, which amends the revised text of the Workers' Statute Law, approved by Royal Legislative Decree 2/2015, of October 23, regarding the termination of the employment contract due to permanent incapacity of employees, and the revised text of the General Social Security Law, approved by Royal Legislative Decree 8/2015, of October 30, regarding permanent incapacity, has been published in the Official State Gazette of April 30, 2025. The regulation enters into force the day after its publication in the BOE (May 1, 2025).

Law 2/2025 eliminates the automatic termination of the employment contract of persons who are recognized as having a permanent incapacity in the degrees of total, absolute or great incapacity, being conditioned to the will of the employee and to the possibility of the company to adapt the job position, or to the existence of a vacant and available job position, in accordance with their professional profile and compatible with their situation.

Specifically, the law introduces the following changes in the rules indicated below:

Amendments to the Workers' Statute (WS):

• A new letter n) is included in article 49.1 of the ET to condition the termination of the employment contract due to a declaration of great incapacity, absolute or total permanent incapacity of the employee to the fact that it is not possible to make the reasonable adjustments for creating an excessive burden for the company, when there is no vacant and available job position in line with the professional profile and compatible with the new situation of the person, or when there is such a possibility and the employee rejects the change of job position suitably proposed.
• The employee will have a period of ten calendar days from the date of notification of the resolution in which the permanent incapacity is qualified to express in writing their will to maintain the employment relationship.
• On the other hand, the company will have a maximum period of three months from the date of notification of the decision classifying the permanent incapacity to make reasonable adjustments or change the job position. When the adjustment involves an excessive burden or there is no 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.
• To determine whether the burden is excessive, the cost of the adjustment measures will be taken into account in relation to (i) the size, (ii) the economic resources, (iii) the economic situation, (iv) the total turnover of the company and (v) when it is sufficiently alleviated by public measures, aid or subsidies.
• For companies employing less than 25 employees, it will be understood that the burden is excessive when the cost of adapting the job, without taking into account the part that may be covered by 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 ET (compensation for unfair dismissal) or (ii) six months' salary of the employee requesting the adaptation.
• The prevention services will determine, in accordance with the provisions of the applicable regulations and after consultation with the workers' representatives in matters of occupational risk prevention, the scope and characteristics of the adjustment measures, including those relating to training, information and monitoring of the employee’s health, and will identify the jobs that are compatible with the employee’s new situation.
• Article 48.2 of the WS is amended to provide for the continuation of the suspension of the employment relationship, with job reservation, during the time in which the reasonable adjustments or the change to a vacant and available position are resolved.

Amendments to the General Social Security Law (GSSL):

• Article 174.5 of the GSSL is amended to introduce a new paragraph to establish that when the declaration of permanent incapacity in the degrees of total, absolute or great incapacity does not determine the termination of the employment relationship, because the company carries out the reasonable, necessary and adequate adaptation of the job position to the new situation of incapacity declared or because the employee has been assigned to another position, the permanent incapacity benefit will be suspended during the performance of the same job position with adaptations or another that is incompatible with the receipt of the corresponding pension, in accordance with article 198.

Amendment of the Law Regulating the Social Jurisdiction (LRSJ):

• Article 120 of the LRJS is amended to incorporate an urgent and preferential procedure in the cases of termination derived from article 49.1.n) of the WS.

Adaptation of terminology

• The terminology in the WS, the GSSL, the Law regulating the social protection of employees in the maritime-fishing sector, and its implementing regulations, is adapted by replacing the terms 'great disability' and 'non-contributory disability' with 'great incapacity' and 'non-contributory incapacity'.

In the next six months, the Government will present a proposal to amend the Social Security regulations on permanent incapacity and its compatibility with work. The same proposal is proposed for the personnel of the Civil Guard, the National Police Corps and the Armed Forces within twelve months.