The amendment to Article 49.1 of the Workers’ Statute (ET), in force since May 2025, represents a structural change in the management of permanent disability situations in the Spanish labour market.
Until now, companies could directly terminate an employment contract upon receiving a decision from the National Social Security Institute (INSS) recognising the worker’s situation of permanent disability or severe disability, provided there was no prospect of improvement within the following two years. This termination, previously considered valid, has now been subject to judicial review.
Why has the approach changed?
The turning point came with the judgment of the Court of Justice of the European Union (CJEU) of 18 January 2024 (Case C-631/22). In this case, the CJEU found that the Spanish practice violated Directive 2000/78/EC on equal treatment in employment and occupation.
The Court held that Spanish legislation allowed the termination of contracts without requiring companies to assess and, where appropriate, implement reasonable accommodations to permit the worker to continue working despite their disability.
As a result, Spain has amended Article 49.1 of the Workers’ Statute to bring it into line with European law and to strengthen the protection of workers with disabilities.
What must companies do now in case of permanent disability?
Under the new wording of Article 49.1 ET, a declaration of permanent disability (of any degree) or severe disability no longer constitutes an automatic cause for termination. From now on, the company must follow a prior procedure:
Worker’s statement
Within ten days of the INSS notification, the employee must inform the company of their intention to continue working.
Assessment of reasonable accommodations
If the employee wants to keep their job, the company has three months to study and implement, if applicable, the necessary reasonable adjustments to the position or to consider reassigning the employee to a suitable vacancy. This assessment must be conducted with the support of occupational risk prevention services and the involvement of employee representatives.
Limitations on reasonable accommodations
The company may reject adjustments if it can prove that they impose an excessive burden, considering its size, resources, and financial situation.
In companies with fewer than 25 employees, an excessive burden will be presumed if the cost of the adjustment exceeds the amount of compensation for unfair dismissal or six months’ salary—whichever is greater.
When can the contract be terminated?
The company may only terminate the contract if any of the following circumstances apply:
- The employee does not express their intention to continue working within the legal deadline.
- The company proves that it is impossible to make reasonable adjustments.
- The adjustments are technically possible but impose an excessive burden according to the established criteria.
Conclusion: more protection for workers, more obligations for companies
The amendment to Article 49.1 ET introduces a new requirement for diligence and planning on the part of companies, which must now act more cautiously before terminating a contract due to permanent disability.
An individualised assessment is essential, as is properly documenting all efforts to adapt or reassign the worker and seeking specialised legal advice to avoid the consequences of an unfair or null dismissal.
If your company needs to handle the termination of a contract due to permanent disability, we can help you to apply the current legislation correctly.
