Analysis by Puigverd Assessors on the Reform of Termination of Contract due to Permanent Disability

Here’s the American English translation:

The entry into force of Law 2/2025 on May 1, 2025, has revolutionized labor legislation in Spain by amending significant aspects of the Workers’ Statute and the General Social Security Law. One of the most notable changes is the elimination of the automatic termination of employment contracts in cases of permanent disability, highlighting the importance of promoting labor inclusion.

Previously, a worker declared with total, absolute, or severe permanent disability could see their employment relationship terminated immediately and without further procedures. Under the new regulatory framework, companies must consider alternatives before making such drastic decisions. This involves evaluating the possibility of making adjustments to the employee’s job or, if that is not feasible, offering a reassignment to a position that better suits their new situation.

The process that companies must follow after the declaration of permanent disability consists of several steps. First, the worker has a period of 10 calendar days to express their desire to remain with the company. Then, the company has a maximum of three months to assess the situation and determine whether reasonable adjustments or reassignments are possible. Only in cases where these measures cannot be implemented without imposing an excessive burden on the company can the termination of the contract proceed, always with proper justification.

“Reasonable adjustments” refer to the necessary adaptations that allow a person with a disability to perform their functions in a fair work environment. The law establishes clear criteria for determining when a burden is excessive, particularly focusing on small businesses with fewer than 25 employees. In these cases, the burden will be considered excessive if the cost of the adjustment exceeds the legal severance pay or the equivalent of six months’ salary of the worker, excluding public aid.

This legislative change represents both a challenge and an opportunity for companies. It is essential for employers and entrepreneurs to proactively assess the possibility of making the necessary adjustments and to adequately document each phase of the process. This not only ensures compliance with the new regulations but also protects the company against future inspections or litigation.

Law 2/2025 stands as a significant advancement in the protection of labor rights for people with disabilities, promoting a more inclusive work environment. Organizations like Puigverd Assessors are dedicated to providing advice to companies to ensure their compliance with this new legislation, fostering labor practices that align with the principles of equality and non-discrimination.

via: MiMub in Spanish

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