SPAIN Trends and Developments Contributed by: Jacobo Martínez, Juan Alonso and Luis Aguilar Romera, Eversheds Sutherland Spain
interpreted as indirect evidence of undeclared over - time or breach of collective agreements, with potential consequences including sanctions, back-pay claims and the doubts as to the legal robustness of future dismissals or restructurings. Proposed working time reduction and emerging enforcement mechanisms under debate The Spanish government has put forward a proposal to gradually reduce the statutory working week from 40 to 37.5 hours, without any corresponding reduction in pay. The reform is structured in two phases: an initial cut to 38.5 hours, followed by a final reduction to 37.5 hours, to be applied universally across sectors and companies, unless a more favourable arrangement is established by a relevant collective agreement. This initiative is part of the coalition government’s broader social agenda. However, its parliamentary passage is far from assured. With no stable majority in Congress, the reform’s approval hinges on negotia - tions with coalition partners and other parliamentary groups. As such, delays, amendments or even the proposal’s ultimate rejection all remain possible. Despite this legislative uncertainty, the political momentum is already influencing collective bargain - ing. In several sectors, reductions in working hours are being negotiated independently of the proposed law. Employers should be aware that the public debate may shape employee expectations and collective demands, irrespective of the reform’s legal status. The draft legislation also introduces two noteworthy enforcement innovations. First, it envisages the crea - tion of a national digital platform for real-time record - ing and transmission of employees’ working hours to the labour authority. This would eliminate the cur - rent possibility of maintaining internal or decentral - ised records. Second, the proposal would modify the sanctioning regime: infractions related to working time, such as failure to track hours or exceeding lim - its, would be penalised per affected employee, rather than as a single company-wide offence. This could significantly increase the potential financial cost of non-compliance.
Although these measures are not yet in force and may be subject to legislative revisions, they clearly reflect a paradigm shift in enforcement policy. Employers should proactively evaluate their time-tracking sys - tems, ensure full traceability, and prepare for the potential centralisation of compliance monitoring. Dismissal after permanent incapacity requires documented adaptation efforts One of the areas where judicial interpretation has undergone the most significant transformation in the treatment of employees concerns the dismissal of employees declared permanently unfit for their origi - nal roles. Such a determination typically follows pro - longed illness or injury and leads to the recognition of permanent disability status by the Spanish social security system or a mutual insurance entity. Historically, employers often treated the formal declaration of permanent incapacity as sufficient justification for contract termination. This view no longer holds legal ground. Courts now demand that employers undertake a comprehensive, case-specific assessment prior to dismissal. This includes evaluat - ing whether the position can be reasonably adapted, through modifications in tasks, equipment, schedules or workplace conditions, or, where appropriate, offer - ing reassignment to an alternative position compatible with the employee’s abilities. These efforts must be documented, individualised and demonstrably reasonable. Vague assertions that adaptation is “not feasible” are inadequate. Where a suitable role exists within the organisation and the employer fails to consider or offer it, the dismissal may be deemed null and void on grounds of discrimination based on disability. Such a ruling entails serious legal consequences, including reinstatement, full back pay and, in some cases, compensation for moral dam - ages. Importantly, this duty applies regardless of whether the employee is already receiving a disability pen - sion, or the incapacity has been officially recognised. What matters is whether the employer made a good- faith effort to preserve the employment relationship. Companies should handle such cases with height - ened diligence, ensuring that all reasonable paths to
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