Employment - Legislative and case law developments

1. New developments in temporary contracts in the agri-food sector based on production reasons

Law 1/2025 of 1 April on the prevention of food loss and waste has amended the temporary contracts regime for production reasons in the agri-food sector. Companies now have more flexibility to offer temporary contracts to meet occasional, foreseeable and short-term needs.

2. Supreme Court recognises right to proportional part of bonus when employment contract is terminated during accrual period

The Supreme Court has analysed the validity of requiring an employee to be employed during the period of accrual of variable remuneration and on the payment date. The decision confirmed that accrued salary, including bonuses, cannot be made conditional upon situations arising after it has accrued and that payment cannot be decided at the discretion of either party.

3. Supreme Court clarifies difference between geographical mobility and substantial changes in working conditions when changing workplace

The Supreme Court has stated that permanently transferring employees to another workplace, without the transfer involving a change of residence, may constitute a substantial change in working conditions if it significantly affects them and no organisational or productive reasons are provided to justify such decision, such as the employer’s right to modify certain elements when there is no agreement to do so.

4. Right to reinstate employees on voluntary leave takes precedence over converting of temporary contracts into permanent contracts

The Supreme Court has ruled that the right to reinstate workers on voluntary leave takes precedence over converting their temporary contracts into permanent contracts, even if such conversions are in accordance with undertakings made in the company’s collective bargaining agreement. Therefore, the statutory right to reinstate a worker after voluntary leave takes precedence over collective bargaining obligations.

5. Supreme Court’s new case law on prior hearing requirement in disciplinary dismissals has no retroactive effect

The Supreme Court ratified the requirement that disciplinary dismissals include a prior hearing to allow workers to defend themselves against the accusations made against them. The Court confirmed the direct application of Article 7 of ILO Convention No. 158, although this formality only affects dismissals occurring after this decision (i.e. it has no retroactive effect).

6. Supreme Court rules absenteeism bonus void if it discriminates against some employees

The Supreme Court has ruled that an absenteeism incentive is void if it takes into account absences for any reason such as, illness, gender or association, and thus discriminates against some employees. The Court stated that this incentive can only be affected by unjustified absences or justified absences that do not involve discrimination.