Employment Newsletter January

Legislative Updates

1. Law 9/2025, of 3 December, on Sustainable Mobility

Law 9/2025, of 3 December, on sustainable mobility

On 5 December 2025, Law 9/2025 of 3 December on Sustainable Mobility, entered into force. Its purpose is to establish a new, cross-cutting regulatory framework designed to transform the transport model in Spain towards environmental, social and economic sustainability criteria. With regard to labour relations, it establishes the obligation to prepare, within a maximum period of two years, a sustainable mobility plan for work ("PMST"): 

• For companies with workplaces with more than 200 employees or 100 per shift
• For companies with high-occupancy workplaces (more than 1,000 employees in municipalities or metropolitan areas with more than 500,000 inhabitants). 

The PMST must include measures to reduce employee mobility during rush hour or during the working day and promote the use of low or zero-emission means of transport and collaborative mobility services. 

These plans must be agreed upon with employees' legal representatives or, in their absence, negotiated with the most representative trade unions in the sector to which the company belongs, which are authorised to negotiate the applicable collective bargaining agreement. 

These PMSTs must be reviewed every five years and a mobility coordinator or manager must be appointed.

Case law

1. The variable remuneration cannot be reduced due to sick leaves and leaves related to sickness or medical check-ups

Judgement of the Supreme Court, Social Chamber, No. 35/2026, dated 16 January 2026

In this case, the analysis focuses on whether the employer's practice consisting of excluding, from the calculation of a variable remuneration incentive, absences due to temporary disability (sick leave) and certain paid leaves under Article 37.3 of the Workers’ Statute ("WS") (due to hospitalization or sickness or relatives, to carry out employees legal representatives' task and to undergo medical check-ups of pregnant women) is valid or not. The collective dispute, brought by FeSMC‑UGT, was upheld by the Social Chamber of the National High Court ("NHC"), which declared the practice discriminatory, and therefore, null and void.

The Supreme Court (“SC”) notes that anti‑absenteeism policies are permissible provided they do not infringe the principle of equality and do not take into account absences due to illness or absences linked to sickness linked to work‑life balance or freedom of association. The SC declares the employer's practice discriminatory and also points out that Article 17 of the Workers’ Statute guarantees non‑discrimination in employment relations, and that Law 15/2022 expressly prohibits any difference in treatment or economic detriment on grounds of illness or health condition, as well as pay limitations based on protected features.

2. A change arising from the hierarchy of norms and from a legal or case-law change does not constitute a collective substantial modification

Judgement of the Supreme Court, Social Chamber, No. 1269/2025, dated 17 December 2025

The Court addresses whether the employer’s unilateral decision to consider hours of presence as effective working hours in accordance with current case law, constitutes a substantial modification of working conditions ("SMWC") and, consequently, whether the procedure for SMWC under Article 41.4 of the WS should have been carried out.

The Social Chamber of the High Court of Justice (“HCJ”) of Catalonia declared the measure null for failure to follow the SMWC procedure. The SC adopts HCJ's approach and concludes that the company merely aligned the working‑time regime with the new case‑law and collectively bargained framework that classifies “presence hours” as effective working time, without altering the calendar, working day, or shifts, while also offering compensation or remuneration for any excess hours.

3. The compensation right for moral damages due to the infringement of fundamental rights does not require that the parameters for quantification are established

Judgement of the Supreme Court, Social Chamber, No. 1280/2025, dated 17 December 2025

The judgement addresses whether, once a violation of a fundamental right is declared (in this case, the violation of the right to equality and non-discrimination in relation to the dismissal of an employee on sick leave), compensation for moral damages should be automatically granted.

The SC notes that, whereas the determination of compensation for pecuniary damages requires the setting of quantification bases, specifying non-pecuniary damage may be more difficult and costly. Clarifying and unifying its doctrine, the SC states that: (a) where the assessment of moral damage is difficult, the legislature itself dispenses with the need to detail the bases for its quantification (Article 179.3 of Law 36/2011, of 10 October, regulating the Labour Jurisdiction (“LRJS”)); and (b) the judge is required to fix the amount prudently to fulfill both compensatory and deterrent purposes (Article 183.2 LRJS). On this basis, the SC reiterates the key aspects governing the quantification of moral damage:

• in view of the difficulty of a detailed assessment, the requirements for determining the amount should be relaxed, which entails a broader margin of judicial discretion in quantifying moral damages;
• the fine amounts for violations of fundamental rights under Royal Legislative Decree 5/2000, of 4 August, approving the consolidated text of the Law on Social Order Infringements and Sanctions (“LISOS”), may serve as a merely indicative criterion (not direct application); and
• the specific circumstances of the case must be weighed (seniority, persistence, intensity, consequences, recidivism, context, etc.).

Applying this doctrine, the SC partially upheld the appeal and reinstated the compensation of €7,501 for moral damages.

4. The change of the collective bargaining agreement that was incorrectly applied must be implemented by means of a substantial collective modification

Judgement of the Supreme Court, Social Chamber, No. 1244/2025, dated 11 December 2025

The SC addresses whether an employer may, through the procedure for SMWC under Article 41 WS, replace the collective agreement that it had been applying to part of its workforce, when the former does not correspond to the actual and predominant activity of the company, or whether, such a change requires recourse to the opt-out procedure under Article 82.3 WS or is legally inadmissible.

The NHC found lawful the company’s decision to assign 115 employees to the State Collective Agreement for Consultancy Companies, replacing the provincial metal agreements that had been applied at various sites, after following the SMWC procedure.

The SC upheld the lower court's ruling. It reasoned that this was not a case of opting out or partial non-application of statutory conditions, but rather of full subsumption into another collective agreement framework, as it was proven that the previous agreement did not correspond to the company's actual activity. 

5. The change in the shift system to extend rest hours constitutes a substantial modification of working conditions

Judgment of the Supreme Court, Social Chamber, No. 1181/2025, dated 3 December 2025

The judgment addresses whether the employer’s unilateral decision requiring that, in preparing duty rosters, a minimum rest period of 12 hours between working days must be observed, constitutes a SMWC of the shift work regime that should have followed the procedure set out in Article 41 WS.

The SC considers that the unilateral change made by the employer cannot be justified on the grounds of compliance with an obligation regarding rest time between working days, as there is a legal regulation that allowed the daily rest time to be reduced to 7 hours provided it was compensated with a free shift or equivalent rest. Therefore, the change should have been made as a SMWC. 

6. It is not discriminatory to stipulate a leave entitlement for a defined category of employees where the differential treatment is objectively justified

Judgement No. 1163/2025 of the Social Chamber of the Supreme Court dated 2 December 2025

The case concerns whether the right to paid leave on Thursday afternoons for the care of children with disabilities should be recognised for the entire workforce of a banking entity, regardless of their working hours and place of work. The claim argued that granting the leave provided for in the Equality Plan to staff with split shifts and not to staff with single shifts (continuous working day providing services in the afternoon two days a week on a shift basis) constitutes indirect discrimination affecting women, as they are the ones who mostly exercise their right to work-life balance, and/or discrimination by association.

The NHC upheld the claim, considering that the measure constituted indirect discrimination on the grounds of sex.

The company lodged an appeal to the SC which concluded that there was no discrimination because there was an objective and reasonable justification due to: (i) the organisational differences between the two models and office hours; (ii) the organisational difficulties arising from that leave at those workplaces where the measure applies, can be addressed with the support of the other employees of the bank branch; and (iii) the existence of specific compensatory measures for employees with unusual working hours.

7. It is not discriminatory to pay the loyalty award only to staff with longer years of seniority

Judgement No. 1164/2025 of the Social Chamber of the Supreme Court dated 2 December 2025

The case analyses if the so‑called “loyalty and length‑of‑service award” for 25 years of service is a more beneficial employment condition for all the employees and not only for employees with seniority in the company (or a group) company prior to 1997.

The NHC dismissed the claim. The SC dismissed the appeal and concluded that the award is not a more beneficial condition applicable to all the employees because it was not proven that the company had been paying this bonus to the workforce as a whole. The Supreme Court further holds that there is no discrimination, since the difference in treatment is based on the greater seniority of some employees, which was limited and justified by the consolidation of personal rights and the maintenance of expectations in closed groups, compatible with private autonomy.

8. The requirement in a disciplinary dismissals for a prior hearing is not met when sending an email to a personal email address without proof of receipt

Judgment No. 2517/2025 of the Social Chamber of the High Court of Justice of the Basque dated 25 November 2025

The claimant employee was dismissed on disciplinary grounds for unjustified absences pursuant to Article 54.2 a) WS. The company sent an email to his personal email address requesting justification for the absences and subsequently, notified him of his disciplinary dismissal. The claimant challenged the disciplinary dismissal, alleging failure to comply with the prior hearing procedure under Article 7 of ILO Convention 158.

The Social Court dismissed the claim, considering that the email was a valid mean of communication that allowed the employee to defend himself before the dismissal. However, the HCJ of the Basque Country declared the dismissal unfair and considered that the mere referral to a personal account did not prove actual receipt, nor did it guarantee that the employee had a real opportunity to defend himself, especially since a corporate channel was not used. 

Keep an eye out 

1. Update of the minimum wage 

On 27 January 2026, the Congress of Deputies did not validate Royal Decree-Law 16/2025 of 23 December, which automatically extended the 2025 minimum wage ("SMI") for 2026. 

However, the absence of this extension has no significant practical implications, as the Directorate-General for Labour has published Interpretative Criterion 1/2026 on the consequences of not extending the 2025 SMI. As per this Criterion the absence of the extension of the 2025 SMI does not allow for a reduction in salaries already established in employment contracts and companies must maintain at least the salary levels that were being paid according to the 2025 SMI.

In any case, the Government, through the Ministry of Labour and Social Economy, has reached a preliminary agreement with the UGT and CCOO trade unions to increase the SMI by 3.1% in 2026, setting it at €1,221 per month in 14 payments. This increase will apply from the entry into force of the royal decree formalising the agreement, with retroactive effect from 1 January 2026.

2. Extension of paid leaves

On 15 December 2025, the Ministry of Labour and Social Economy reached an agreement with the trade unions to: 

• Extend bereavement leave to 10 working days (or 12 where travel is required) for the death of a spouse, civil partner, or relatives up to the second degree of consanguinity, and allow such leave to be taken continuously or intermittently within a period of four weeks; and
• Create new leave of up to 15 working days to accompany relatives in palliative care, as well as one working day to accompany them in euthanasia processes.

It is expected that the regulatory procedures for its incorporation into the legal system will begin in the coming months.

3. Draft Bill on the Statute for Interns

On 4 November 2025, the Council of Ministers approved the Draft Bill on the Statute for Persons in Non-Work-Related Practical Training in the Field of Business.

The future regulation aims to clearly differentiate training internships from labour relations, preventing their use as a mechanism for covert or low-cost employment. Among other obligations, it will establish the requirement for an individualised training plan, a direct link to the educational pathway, a specific mentoring system, and a limit of 20% of trainees on the total workforce.

4. EU directives pending transposition in 2026

• Directive (EU) 2019/1152 on transparent and predictable working conditions: The deadline for transposing Directive (EU) 2019/1152 expired on 1 August 2022, leading to the opening of infringement proceedings by the European Commission in September of that same year.

The transposition of the Directive is expected to entail changes to the duty to provide information on the essential elements of the employment relationship, as well as to the regulation of fixed-term contracts, part-time work and supplementary hour agreements, probationary periods and irregular working hours.

• Directive (EU) 2023/970 on pay transparency, which will introduce new obligations regarding salary information and equal pay, with a transposition deadline of 7 June 2026, extending information and transparency obligations in stages according to the size of the workforce and setting the threshold for the new pay gap at 5%.
• Directive (EU) 2024/2831 on improving working conditions on digital platforms, which reinforces the presumption of employment when there are indications of direction and control by the platform, with a final transposition deadline of 2 December 2026.

5. The government promotes a model of "democracy at work" with share ownership and participation on boards

The Ministry of Labour has presented a report on "workplace democracy", prepared by an international commission of experts, which will serve as the basis for a future legislative proposal to be negotiated within the framework of social dialogue with employers and trade unions.

The document proposes strengthening employee's participation in corporate governance and facilitating their access to ownership. Specifically, it proposes that companies with more than 25 employees transfer at least 2% of their shares to their workforce, a percentage that would rise to 10% in companies with more than 1,000 employees, through trusts or other vehicles. It also provides for the mandatory presence of employees on boards of directors: one-third of the seats in companies with between 50 and 1,000 employees and half in larger companies.

Notwithstanding its scope, the political feasibility of these measures is uncertain, given that the government agreement contemplated advancing participation in decision‑making but not access to corporate ownership.