Royal Decree 723/2026: new algorithmic transparency obligations in employment relations
Royal Decree 723/2026, which comes into force on 5 October 2026, implements Article 8.5 of the Workers’ Statute and replaces Royal Decree 1659/1998. Its aim is to update the information that the employer must provide in writing to each worker regarding the essential elements of their employment relationship, thereby partially completing the transposition of Directive (EU) 2019/1152.
1. Content of the new information obligation
The employer must inform each worker in writing of the essential elements of their employment relationship, either in the contract itself or by means of supplementary documents. In particular, Article 3.2.k) of the Royal Decree requires information to be provided on the existence of algorithmic or automated decision-making systems and, where these are used to determine, set, vary or amend working conditions, on their main guidelines, criteria and operating rules.
This obligation covers decisions regarding the duration and organisation of the working day, the allocation of tasks, wages, career progression, the place of work and the termination of the contract, amongst others. As this is an open-ended list (‘such as’), it may extend to other decisions having an equivalent impact on working conditions.
In particular, the list set out in Article 3.2.k) may extend to performance appraisal, shift allocation, productivity measurement, the determination of variable incentives or any other decision having an equivalent impact on working conditions.
The concept of an algorithmic or automated system in the Royal Decree is broader than that of an artificial intelligence system; it may therefore encompass shift optimisation tools, scoring systems or automated task-allocation formulas. Nor is it necessary for the system to make the final decision: tools that support, recommend or condition a human decision are also included where they have a significant influence on working conditions.
2. Relationship with the GDPR
The GDPR applies when the system involves the processing of personal data, not merely because an algorithm is used. In such cases, the company must comply with both the data protection obligations and those set out in the Royal Decree. Articles 13 and 14 of the GDPR require information to be provided on the processing and, where applicable, on the existence of automated decisions, their logic and their possible consequences.
I. Right of access
Article 15(1)(h) of the GDPR allows employees to request information on certain automated decisions, including profiling, as well as on the logic applied and their intended consequences. This right does not replace the obligation under the Royal Decree: whilst Article 15 requires a request and is limited to the processing of personal data, Article 3(2)(k) of the Royal Decree obliges the company to provide information ex officio, as part of the initial employment information.
II. Solely automated decisions
Article 22 of the GDPR applies where a decision is based solely on automated processing and produces legal effects or significantly affects the individual, in which case the relevant safeguards must be observed (human intervention, the opportunity to express one’s point of view and the right to challenge the decision). Even where there is genuine human intervention and Article 22 does not apply, the company may still be obliged to provide information in accordance with the Royal Decree if the system is involved in decisions regarding working conditions. If human oversight is merely formal, both sets of rules may apply simultaneously.
III. Impact assessment
The company must consider carrying out an impact assessment where the processing is likely to result in a high risk (systematic evaluation, monitoring or automated decision-making with significant effects). However, the fact that a system is covered by Article 3(2)(k) of the Royal Decree does not automatically require such an assessment: it will be necessary to analyse the characteristics, purpose and specific risks of the processing in each individual case.
IV. Meaningful human intervention
From an employment perspective, it is worth emphasising that the human intervention required by Article 22 of the GDPR must be significant: carried out by a person with the competence and authority over the decision who assesses all the available information. If the intervention is limited to automatically validating the algorithm’s result, the process is considered a fully automated decision. This assessment must be carried out at every stage of the process and not merely in relation to the final decision (for example, in recruitment processes, the initial automated screening constitutes an autonomous decision even if the hiring decision is made by a human).
3. Relationship with the Artificial Intelligence Regulation
The AI Regulation only governs systems that possess a certain degree of autonomy and inferential capacity, and not all of these are classified as high-risk. In the workplace, the AI Regulation imposes three specific information obligations, all of which are limited to high-risk AI systems. The Royal Decree, by contrast, has a broader scope: it also covers algorithmic or automated tools that are not AI systems.
I. Prior information in the workplace (Art. 26.7)
Before using a high-risk AI system in the workplace, the employer must inform the legal representatives and the workers concerned. Unlike the Royal Decree, this obligation applies only to high-risk AI systems and does not require details of the guidelines, criteria or operating rules.
II. Information to individuals affected by a decision (Art. 26.11)
Where a high-risk AI system listed in Annex III makes or assists in making decisions concerning natural persons, the employer must inform them that they are subject to the system. This obligation is not limited to the workplace.
III. Right to an individual explanation (Art. 86)
A person affected by a decision in which a high-risk AI system has been involved may request a clear and meaningful explanation of that specific decision. This is a specific and reactive right, distinct from the general and preventative obligation under the Royal Decree to provide information on the existence of the system and its operating rules.
In the workplace, this right is particularly relevant in recruitment processes where a candidate is rejected, in decisions regarding the termination of a contract, or in any other decision with significant consequences for the worker. It may give rise to individual claims supplementary to the collective safeguards set out in Article 64.4.d) of the Workers’ Statute.
4. Relationship with the Workers’ Statute
Article 64.4.d) of the Workers’ Statute recognises the right of legal representatives to be informed of the parameters, rules and instructions of AI algorithms or systems that affect working conditions, access to employment or the retention of employment. It is, therefore, a collective right to information.
Royal Decree 723/2026 introduces an additional obligation of an individual nature, by requiring that each worker receive the relevant information on these systems in writing. Both obligations are complementary: informing the legal representatives does not replace individual information, nor vice versa.
Recent case law has significantly strengthened the scope of the collective right to algorithmic information. The judgement of the National High Court of 4 July 2025 (case no. 182/2025) ruled that an employer’s refusal to provide information on the parameters and rules of the algorithm used to allocate shifts and days off infringes freedom of association, extending the duty to provide information to trade union representatives as well (Article 10.3.1 of the LOLS) and ordering the company to pay compensation of 6,250 euros.
This ruling is particularly significant because it confirms that a company’s lack of transparency cannot be justified by claiming that the tool was already known or that it was not technically AI: the mere use of an algorithmic system that affects working conditions is sufficient to trigger the duty to provide information.
Continue reading the Information Note.