Employment - Legislative and case law developments

1. New Social Economy Law 1/2026

Law 1/2026 of 8 April on promoting the social economy radically reforms the legal framework governing cooperatives, social integration enterprises, and the social economy, with direct implications for the labour market. Key measures include introducing specific equality plans for worker-members, creating a new temporary contract to facilitate transition into ordinary employment, and strengthening mechanisms to combat the misuse of the cooperative model. 

2. EU Directive amends corporate sustainability reporting and due diligence requirements

Directive (EU) 2026/470 of 24 February 2026 has amended the European framework on due diligence and sustainability, incorporating employment-related provisions. Among other measures, it establishes a non-regression clause to ensure that existing levels of employment and social protection cannot be reduced, and recognises workers, trade unions and employee representatives as stakeholders with consultation rights in the due diligence process.

3. Non-permanent indefinite employment relationships incompatible with EU law

In its judgment of 14 April 2026, the Court of Justice of the European Union ruled on a preliminary reference submitted by the Spanish Supreme Court regarding the categorisations of the employment relationship between a worker and the Autonomous Region of Madrid. The Court declared that clause 5 of the Framework Agreement does not allow “non-permanent employment relationships of indefinite duration”, as it places workers in a precarious temporary situation that neither adequately penalises the abuse of successive fixed-term employment nor remedies the consequences of breaches of EU law.

4. Unlawful strike-breaking

The Constitutional Court has held that replacing striking workers with any available resources – whether human, technical or technological – that mitigate the effects of the strike infringes the fundamental right enshrined in article 28.2 of the Spanish Constitution, regardless of whether the company ordinarily uses those resources.

5. Collective redundancy declared null due to procedural defects in consultation process

The Supreme Court has upheld the nullity of the Red Cross’ collective redundancy proceedings by identifying two separate breaches. Firstly, the notification of the start of the consultation period was sent to the labour authority after the period had concluded. Secondly, a large quantity of documentation was provided in a disorganised manner – 154 documents with no index or explanation – which hindered genuine and meaningful consultation. 

6. Unfair dismissal: inapplicability of notice waiver clause

The Supreme Court has ruled that a contractual clause exempting an employer from the obligation to give notice in the event of dismissal does not apply if the dismissal is declared unfair due to a lack of valid grounds. Invoking this clause in those circumstances constitutes an abuse of rights and an attempt to circumvent the law. Consequently, compensation for unfair dismissal can be awarded alongside payment in lieu of notice. 

7. Limits on unilateral changes to working time through the working calendar

The Supreme Court has ruled that the working calendar must not contradict the maximum working time set out in a collective bargaining agreement or serve to unilaterally override its provisions, even where the aim is to allow employees to freely choose when to take their personal days. 

8. Limits on employer requests for private medical appointments

The Supreme Court has upheld that employers cannot require employees to provide a medical certificate as a condition for taking paid leave to attend private medical appointments. Specifically, employers cannot request that certificates indicate that the appointment falls within the remit of the public health system or that it could not have been scheduled outside working hours. Private practitioners are under no obligation to issue such statements, as they are legal rather than medical in nature. Furthermore, the information requested is very sensitive personal data, which cannot be disclosed under data protection law.

9. Extended notice periods for voluntary resignation are valid if no collective agreement applies

The Supreme Court has ruled that a contractual clause setting a three-month notice period for voluntary resignation, with a salary deduction for each day of delay to give notice, is valid when the applicable collective agreement is silent on this matter. In the absence of collective bargaining agreement provisions, the employment contract can be used to determine the notice period in accordance with article 3.1(c) of the Workers’ Statute, provided that the period is reasonable in light of the nature of the services provided and is not abusive. Furthermore, any infringement of the right to collective bargaining is ruled out, given that the company proposed the clause, rather than imposed it.

10. One act of sexual harassment in the workplace justifies disciplinary dismissal

The High Court of Justice of Catalonia has defined sexual harassment as any unwanted verbal or physical behaviour of a sexual nature that violates a person’s dignity, particularly when it creates an intimidating, degrading or offensive environment. In this case, the remark made by an employee to a young female work experience student, together with non-consensual physical contact, was objectively unacceptable in the workplace, all the more so given the victim’s age and position in the company. The fact that employee had previously been investigated for similar conduct was an aggravating factor that precluded any progressive disciplinary action.