Objective dismissal linked to the use of artificial intelligence in the workplace raises new challenges for employment law in Spain. Artificial intelligence, task automation and algorithmic management can transform how work is organised, reduce the need for certain functions or require new professional skills. However, technology alone does not constitute an independent legal ground for dismissal.
Under Spanish employment law, objective dismissal allows an employer to terminate an employment contract unilaterally when certain legally defined grounds exist and the dismissal is not based on the employee’s culpable conduct. Its validity depends on two key elements: the employer must prove the legal ground invoked and must comply with the formal requirements designed to prevent the employee from being left without a proper defence.
In the age of artificial intelligence, automation and algorithmic management may support objective dismissals based on economic, technical, organisational or production-related grounds — commonly known in Spain as ETOP grounds (causas económicas, técnicas, organizativas o productivas). They may also trigger the specific ground of lack of adaptation to technical changes in the role. In both cases, companies must act with particular diligence, transparency, and care, especially regarding potential discrimination risks and automated decision-making.
Formal Requirements for Objective Dismissal in Spain
The formal validity of an objective dismissal is based on the Spanish Workers’ Statute. First, the employer must provide the employee with a written dismissal letter that sets out the cause of the dismissal in sufficient detail.
In addition, the company must make available to the employee, at the same time as the dismissal letter is delivered, statutory compensation amounting to 20 days’ salary per year of service, capped at 12 monthly payments. The only case in which immediate payment may be omitted is when the dismissal is based on economic grounds, and the company expressly states in the dismissal letter that it is unable to pay the compensation at that time.
The employer must also give 15 days’ notice. During this notice period, the employee is entitled to six paid hours per week to look for new employment. Where the dismissal is based on economic, technical, organisational or production-related grounds, a copy of the notice letter must also be provided to the workers’ legal representatives for their information.
The Dismissal Letter in Automation and AI Processes
In objective dismissals based on ETOP grounds, Spanish courts require the dismissal letter to be particularly detailed. This is because the business reasons justifying the termination are usually unknown to the employee.
It is not enough to rely on generic expressions such as restructuring, digital transformation, automation or implementation of new technologies. The dismissal letter must specify the difficulties, changes, or business needs that justify the dismissal.
- Where the dismissal is based on economic grounds, the letter must specify losses, a decrease in income or sales and the periods affected. It is not always necessary to attach full accounting statements, but the information must be sufficiently clear. If there is an established group of companies and the group’s financial situation is relevant, referring only to one isolated company may not be sufficient.
- Where the dismissal is based on technical, organisational or production-related grounds, the communication must accurately describe the circumstances that negatively affect efficiency, the organisation of work or demand. In particular, when production-related grounds are invoked, it is especially important to identify the specific event that has created the workforce surplus, such as the loss of a contract, a decrease in activity or the reduction of certain services.
AI, Automation and ETOP Grounds
Artificial intelligence may affect objective dismissal through economic, technical, organisational or production-related grounds. The key point is to translate the technological project into verifiable business facts.
Technical Grounds
Technical grounds may exist where the company implements new tools, artificial intelligence systems or automation solutions that modify the means or instruments of production.
To justify the dismissal, the company must identify the technological change, explain its necessity or usefulness and establish a causal link between that change and the redundancy of the position.
For example, technical grounds may be invoked where tasks previously performed manually are now carried out by automated systems, thus leading to a real and demonstrable reduction in the need for labour in those functions.
Organisational Grounds
Organisational grounds may arise when the implementation of AI systems changes the work systems, working methods or the way production is organised.
A mere arbitrary reassignment of duties is not sufficient. There must be a genuine business reorganisation, supported by objective and documented reasons.
In this context, the company must explain how the department changes, which tasks disappear or are transformed, which new functions arise and why the affected position is no longer necessary within the new structure.
Production-Related Grounds
Production-related grounds may exist when artificial intelligence or technological transformation in the sector causes a change in demand or in business activity.
In these cases, the company must prove the specific impact on the affected area, providing comparable figures whenever possible.
For example, production-related grounds may exist when demand for certain services decreases because the market has adopted automated solutions, or where the need for specific professional profiles is reduced due to a structural change in the products or services offered.
Economic Grounds
Economic grounds may apply where technological transformation linked to AI generates losses, a persistent decrease in income or sales, or a negative financial condition.
In this scenario, artificial intelligence is not an autonomous legal ground for dismissal, but rather a factor that may explain the company’s economic evolution.
Lack of Adaptation to Technical Changes in the Rôle
A second possible route is the employee’s lack of adaptation to technical modifications introduced in their position.
Here, the core issue is not the elimination of a role due to workforce surplus, but the employee’s inability to adapt to a relevant and reasonable technical change that alters the way their usual duties are performed.
To rely on this ground, the company must prove:
- The existence of a real technical modification affecting the role
- The employee’s lack of adaptation
- The prior offer of training aimed at facilitating that adaptation.
The time devoted to such training must be treated as effective working time and must be paid.
The company cannot use this route to disguise an ETOP restructuring unrelated to the employee’s suitability. Nor can it characterise a genuine lack of adaptation as a broader business restructuring. Both legal mechanisms are based on different assumptions and requirements.
Transparency, Algorithms and Discrimination Risks
When artificial intelligence is involved in people management decisions, the company must also consider its transparency and information obligations towards workers’ legal representatives.
This duty is particularly relevant where algorithmic systems influence working conditions, performance assessments, task allocation, the selection of employees affected by a restructuring process, or decisions relating to access to, continuation in, or termination of employment.
Companies must also assess the risk of direct or indirect discrimination arising from the use of automated criteria, historical data or apparently neutral variables that may adversely affect certain groups.
How to Document an Objective Dismissal Linked to AI
For an ETOP objective dismissal linked to automation or artificial intelligence to be defensible before the Spanish courts, the company must prove that the legal ground invoked actually exists and is sufficiently significant to justify the measure.
In practice, it is advisable to document:
- The technological project
- The tasks affected
- The impact on the specific position
- The available economic, production-related or organisational data
- The alternatives considered
- The training offered to the employee, where applicable
The dismissal letter must clearly explain the connection between the implementation of AI and the need to terminate the employment contract. Generic references to digitalisation, efficiency or technological transformation should be avoided.
Recent Case Law on AI and Objective Dismissal in Spain
Spanish courts are increasingly examining disputes in which artificial intelligence, automation or technological transformation play a relevant or decisive role in the grounds for dismissal.
Objective dismissal has been considered justified, for example, where there was evidence of an actual decrease in demand and losses linked to the transformation of the sector through new technologies and AI — High Court of Justice of Valladolid, 15 September 2025.
It has also been upheld where the implementation of AI tools changed the internal demand for certain functions or technologies, and made the position effectively unnecessary — High Court of Justice of the Basque Country, Employment Chamber, 26 March 2026.
Similarly, in a context of digitalisation and technological reorganisation of a department, the courts have accepted objective dismissal where tasks were automated and different professional profiles were required — High Court of Justice of Madrid, Employment Chamber, 16 April 2026.
In any event, these rulings confirm that the mere existence of artificial intelligence or a digitalisation process does not automatically validate the termination. The company must prove a real, reasonable, proportionate and sufficiently documented objective ground, as well as a specific connection with the affected position.
Conclusion
Objective dismissal in the age of artificial intelligence requires companies to connect technological transformation to a specific legal ground: economic, technical, organisational or production-related grounds, or lack of adaptation to technical changes in the role.
The company must carefully document the underlying facts, the supporting evidence and the causal link with the affected position, while strictly complying with the formal requirements for objective dismissal and with its transparency and information obligations regarding algorithms and artificial intelligence.
AI may justify a business reorganisation, but it does not replace the need for legal cause, evidence and employment law guarantees.
Frequently Asked Questions
Yes, but not simply because the company has implemented artificial intelligence. The employer must prove a lawful ground for objective dismissal, such as technical, organisational, production-related or economic grounds, or the employee’s lack of adaptation to technical changes in the role.
No. Artificial intelligence is not, in itself, an autonomous legal ground for dismissal under Spanish employment law. It must be linked to one of the legally recognised grounds and supported by facts, data and a clear connection with the affected position.
The dismissal letter should explain the specific legal ground, the technological or organisational change, its impact on the company and the causal link to the dismissal. A generic reference to automation, digital transformation or AI implementation is not sufficient.
Where appropriate, the company may rely on a lack of adaptation to technical changes in the role. However, it must prove that the change is relevant and reasonable, propose training and comply with the applicable legal requirements before terminating the contract.
The main risks include lack of transparency, insufficient justification, algorithmic discrimination and the use of AI as a generic argument to conceal an unproven or disproportionate business decision.
Yes. Where algorithms or AI systems affect decisions that may impact working conditions, access to employment or job retention, the company must comply with its information obligations towards workers’ legal representatives.
The implementation of artificial intelligence in the workplace can have significant employment law consequences. Before adopting termination decisions linked to automation processes, companies should carefully assess the applicable legal grounds, prepare robust supporting documentation and comply with all statutory guarantees.
If your company is considering an AI-driven restructuring or automation process in Spain,
