Incapacity for work, reasonable accommodation and termination of contract
In the field of temporary incapacity (TI), following the entry into force of Law 15/2022, illness is considered a cause of discrimination. This means that the dismissal of an employee on sick leave cannot automatically be considered valid, but may be declared null and void if the real reason for the decision is the employee's illness or state of health. Consequently, companies have the obligation to clearly justify that the causes of dismissal are unrelated to the situation of TI, as in cases of fraud, simulation or carrying out activities that are incompatible with recovery.
In relation to permanent incapacity (PI), the traditional regulation of Article 49.1.e) ET contemplated the automatic termination of the contract due to total or absolute permanent incapacity. However, the Court of Justice of the European Union, in its ruling of 18 January 2024 (Ca Na Negreta S.A. doctrine), has considered that this provision violates European law if the company has not previously tried to make reasonable adjustments to the job or to assess the possibility of relocating the worker to another job compatible with his or her limitations. Only if these measures prove impossible or constitute an excessive burden for the company may the contract be terminated.
Added to this doctrine is the jurisprudential differentiation between supervening unfitness and permanent incapacity. The former, provided for in Article 52.a) ET, refers to the lack of aptitude to perform a specific job and gives rise to objective dismissal with compensation from the employer. Permanent incapacity, on the other hand, recognised by the Social Security, affects the habitual profession and allows access to a public financial benefit. Despite this distinction, the Spanish courts have begun to require that also in cases of unfitness, the company must prove that it has previously explored adaptation measures, in order to prevent the dismissal from being considered discriminatory.
In this context, the Draft Law of 13 September 2024 introduces a profound reform of articles 49 ET and 174 LGSS. The employment contract will no longer be automatically terminated in the event of a declaration of permanent incapacity, but a specific procedure is established: the worker will have ten days to express his/her wish to continue in the company and the company will have a maximum period of three months to make the necessary reasonable adjustments or, in the event of impossibility, to justify the termination of the contract by means of a reasoned decision. Likewise, an essential role is attributed to the prevention services and the legal representation of the workers in the assessment of the adjustments, and the criterion of "excessive burden" is incorporated to determine the limits of this employer's obligation.
On the other hand, the Supreme Court has introduced a relevant change of doctrine in its Ruling of 11 April 2024 (Plenary), by declaring that it is not possible to make the receipt of a pension for absolute permanent disability or severe disability compatible with the performance of an ordinary job, except in the case of sporadic or marginal activities that do not generate inclusion in the Social Security system. This limitation has not yet been extended to total permanent incapacity, although it is expected that this aspect will be addressed in forthcoming reforms within the framework of social dialogue.
In conclusion, there has been a paradigm shift in the way companies manage situations of incapacity: the automatic termination of the contract has disappeared, the obligation to assess reasonable adjustments before dismissal has been strengthened, and there is an open debate on the compatibility between incapacity pensions and employment.
