Employment - Legislative and case law developments

1. Royal Decree 416/2026 approves a new regulatory framework for flexible retirement, extending it to self-employment and introducing an incentive scale for the compatible pension amount

Royal Decree 416/2026 responds to the low uptake of flexible retirement and seeks to establish it as an effective instrument to facilitate a return to work without having to forgo part of the pension. Flexible retirement will no longer be inexorably tied to part-time employed work, as pensioners will also be permitted to combine their pension with self-employment, provided they were not registered as self-employed in the three years prior to the triggering event. Where the pension is combined with part-time employed work, working hours must amount to between 33% and 80% of those of a comparable full-time employee, with the possibility of increasing the compatible pension by an additional 15% or 25%, depending on the working time percentage, where the activity begins at least six months after the triggering event.

2. Conditioning access to variable remuneration on the same number of flight hours, regardless of a working time reduction for childcare responsibilities, constitutes indirect discrimination on grounds of family care

The Supreme Court has declared that requiring employees who have reduced their working hours for childcare responsibilities to meet the same number of flight hours as full-time employees in order to access variable remuneration constitutes discrimination on grounds of family care. The airline must pro-rate both the required hours and the variable pay in proportion to the working time reduction, without prejudice to the employee's right to receive the full variable remuneration where they manage to reach the full threshold notwithstanding the reduction. The ruling has broad practical significance for any company that structures variable remuneration around quantitative targets, as it imposes an obligation to automatically and proportionally adjust those thresholds whenever an employee benefits from any work-life balance measure that reduces their working time; the nullity declared extends both to the company's practice and to the collective agreement provision that prevented pro-rating.

3. Imposing a single inefficient digital communication channel infringes employees' right to use alternative means of communication

A trade union brought collective conflict proceedings before the National Court seeking a declaration that employees were entitled to submit sick notes, absence justifications, sabbatical requests and similar communications through any available means, including email and in-person channels. The Supreme Court upheld the National Court's ruling, reasoning that imposing an exclusive communication channel is only lawful where that channel guarantees effective, two-way communication without placing a disproportionate burden on employees. The Supreme Court does not question the validity of digitalisation tools or employers' power to implement technology platforms; what it declares unlawful is their exclusive imposition when they do not function with the minimum required efficiency.

4. A company-level agreement only prevails unconditionally over a sectoral agreement where the sectoral bargaining unit has become inactive

The Supreme Court has reiterated that declaratory collective conflict actions aimed at determining which collective agreement applies are not subject to the one-year limitation period under article 59 of the Workers' Statute for as long as the agreement whose application is in dispute remains in force. It further declared that a company-level agreement negotiated whilst an active sectoral bargaining unit already existed cannot claim absolute priority under article 84.1 of the Workers' Statute, but only the relative priority under article 84.2, and that, pursuant to the Sixth Transitional Provision of Royal Decree-Law 32/2021, the company agreement lost its wage priority from 1 July 2023, with the sectoral agreement taking precedence on pay matters from that date.

5. No additional requirements — such as cohabitation with the family member or formal carer status — may be imposed on employees wishing to take carers' leave

The Supreme Court has declared null the practice of conditioning the enjoyment of carers' leave on the employee proving cohabitation with the family member concerned or formal carer status beyond the kinship relationship and justification of the triggering event. When transposing Directive 2019/1158, the national legislature deliberately chose not to incorporate the additional controls that article 6 of the Directive expressly allows, thereby expanding upon the level of protection afforded by EU law. As a result, any requirement imposed by an employer beyond kinship and justification of the triggering event is contrary to law: employers may not demand cohabitation certificates, formal proof of carer status or any other additional verification not expressly provided for in the legislation.

6. A company spreadsheet tracking trade union credit hour usage for workforce planning purposes does not constitute planning of trade union activity and does not infringe trade union rights

The Supreme Court accepted the use of a spreadsheet recording trade union credit hour usage by members of the European Works Council, drawing a clear distinction between the employer's organisational power — which includes gathering information on credit hour usage — and interference in the content or direction of trade union activity. The ruling confirms that companies may implement systems to record trade union credit hour usage for organisational purposes, subject to the essential limitation that such records must not be used as an instrument of control or pressure over the content of trade union activity.

7. A myocardial infarction suffered by a teleworker at home during flexible working hours must be classified as a workplace accident; the burden of proving that the employee had finished her working day or begun her lunch break falls on the employer and, where applicable, the mutual accident insurance company

The Supreme Court, sitting in plenary, addressed the classification of a teleworker's death from cardiogenic shock at her home, declaring that the flexible working arrangement governing the employment relationship cannot operate to the detriment of the employee, and that the reasonable doubt as to whether the infarction occurred during working time cannot fall on those claiming death and survivorship benefits. Whilst the burden of proving that an accident occurred during working time falls, in principle, on the employee where work is performed offline and hours are undetermined, the fact that the deceased had an empty stomach was sufficient to establish the evidentiary basis for the presumption of work-related causation, so that it was for the employer and the mutual insurance company to demonstrate that the employee had ended her working day or begun her lunch break at 3:00 pm. The ruling, handed down in plenary, has particular significance for companies with teleworking staff: the absence or deficiency of the mandatory working time record cannot operate to the detriment of the teleworker or her dependants, and shifts the burden of proof to the employer and the mutual insurance company.

8. Breach of the COVID-19 ERTE employment safeguard clause requires the company to repay all social security contribution exemptions enjoyed in full, with no possibility of proportional repayment

The Supreme Court, Administrative Chamber, has established as binding doctrine that breach of the employment maintenance obligation under the Sixth Additional Provision of Royal Decree-Law 8/2020 entails the full repayment of all employer social security contribution exemptions obtained, regardless of the number of dismissals and with no possibility of applying a proportional or nominal criterion. The Court considered that the employment safeguard clause operates as a condition of the benefit: breach retroactively removes the justification for all exemptions obtained, and a contrary interpretation would hollow out the clause's deterrent function and allow companies to shift part of the cost of dismissals onto the social security system. This ruling definitively settles the debate on the scope of repayment in COVID-19 ERTEs.

9. Contact Centre companies are required to grant employees an additional day's rest for each public holiday that coincides with their weekly rest day, to be taken within fourteen days

The National Court, Social Chamber, has declared unlawful the widespread practice in the sector of granting no compensation when a public holiday falls on an employee's scheduled weekly rest day, holding that a public holiday not enjoyed as such generates an autonomous entitlement to a compensatory rest day that must be scheduled and taken within the following fourteen days. The Court drew a distinction between weekly rest — which is restorative in nature — and public holidays, which are an autonomous statutory entitlement: when the two coincide, the public holiday is not absorbed; companies in the sector will need to review their rota planning to automatically incorporate this compensatory entitlement within the timeframe set by the National Court.