Declarations of permanent disability and their impact on employment contracts

The approval of Law 2/2025, of April 29, 2025, amending the Workers' Statute (WS) and the General Social Security Law, is a laudable attempt to adapt Spanish regulations to the approach taken at an international level and in Europe, in relation to the protection of situations of disability in the workplace. In particular, the Spanish lawmakers take into account the judgment by the Court of Justice of the European Union (CJEU) of January 18, 2024 (case C-631/22), regarding the impact that a a declaration of permanent disability may have on an employment contract and its possible termination.

This laudable attempt, however, is distorted by a regulation in which the regulatory clarity and certainty of legal situations resulting from the application of the new law appear to be unattainable. Once again, the interpretation of the law leads us to a series of interpretation problems that make us crave stricter control of the quality of legislative production. Let’s take a look.

The new article 48.2 of the WS regulates, in particular, two different scenarios. The first, a declaration of permanent disability of the employee, in which provision is made for a review due to improvement "which allows the employee to return to work". In this case, the previous suspension of the employment relationship for a period of two years continues (from the date of the decision declaring the permanent disability). The second, although the law is not as clear as it could be, refers to declarations of disability in which there is no prospect of improvement. In this case, the suspension of the employment relationship is also (the expression indicates that we are dealing with different scenarios) maintained, and the job position is reserved, in the event that the employee, within ten days of notification of the resolution, expresses his or her willingness to continue the employment relationship, meaning that the steps established in new section n) of article 49.1 of the WS must be carried out.

This is where the interpretation problems arise: can the employee who has received a declaration of permanent disability with the prospect of improvement, proceed in the same manner that is established for when said prospect of improvement does not arise, stating within ten days his intention to continue the employment relationship? Do the provisions of Article 49.1 n) have to be implemented in such a scenario? Or, on the contrary, given that the law is silent, does this mean that the two-year suspension is mandatory and that the aforementioned provisions would only come into play once the suspension has ended? There would appear to be no logic in allowing employees, in cases of permanent incapacity with no prospect of improvement, to request the adaptation of the job position or a change to another position, and yet establish a two-year suspension of the employment contract when there is a prospect of improvement. In any event, if the employee requests the adaptation or a change of job position, the impossibility of such change or excessive cost of the adaptation do not appear to allow the termination of the employment relationship, in the terms of article 49.1.n), fifth paragraph of the WS, before the expiry of the two-year period established for the prospect of improvement.

In addition, the law does not clarify what happens if the two-year period elapses and the prospect of improvement is not confirmed. Is it possible to terminate the employment relationship, based on the fact that the wording of article 49.1.n) makes provision for  regulation of 48.2 ("without prejudice to article 48.2"), or does this necessarily lead us to article 49.1.n), where a ten-day period commences to express the intention to continue with the employment relationship from the notification of the decision that rules out the improvement and confirms the definitive nature of the disability? The latter seems to be the most reasonable solution, but it is certainly not expressly contemplated in the law.

With regard to the steps set out in article 49.1.n) of the WS, the first doubt is whether the lawmakers have established a specific sequence, which should be respected, or whether the possibilities contemplated are open. In the first case, reasonable adaptations would have to be made to the job position, so that it can continue to be performed by the employee. Only when such adaptations are not possible or constitute an excessive burden, could the existence of a vacancy be considered, which is in line with the professional profile of the employee and compatible with their new situation. In the second case, the company could directly choose to offer the new job position and rule out the possibility of adapting the previous position. Could the employee refuse the position and claim that the previous position could be adapted? Would the refusal of the job referred to in the first paragraph of Article 49.1n) be justified in that case, in which event the employer could not base his decision to terminate the employment relationship on that refusal?  (Note that the law refers to the adaptation of the job or the change in the position and not, for example, to the adaptation or, failing that, to the change in the position)

When the employee does not express, within ten days, his or her intention to continue the employment relationship, the company may proceed to terminate it, with effect, it must be assumed, from the notification of the decision declaring the disability. No time limit is mentioned: is the period of three months from said notification indicated in the fifth paragraph of the provision applicable? If so, the term would clearly appear to be excessive, so the termination should be immediate or be interpreted as automatic, simply in view of the declaration of comprehensive disability or total or absolute permanent disability.

It should be borne in mind that where it is impossible to adapt the job position or if a compatible position does not exist, the termination is not automatic, and must be notified to the employee in writing providing justification. This termination also raises interpretation problems: the law says that the company has three months to verify the possibility of adaptation or change, and "the same period" for termination when such a possibility does not exist. Does the same term mean that a new period of three months commences for the termination and, if so, from when? From the time that there is an express record that the adaptation or change is impossible, or that its cost is excessive? Or should the same term be interpreted to mean "within the same period"? This would imply that there would be a single three-month term, as from the notification of the resolution classifying the disability, in which all the steps in relation to the adaptation or change of job position would have to be complied with and it would be necessary to proceed, where appropriate, with the termination of the contract.

Finally, although other interpretation problems will undoubtedly arise, all issues relating to the termination of the contract in cases of permanent disability, including those that question the feasibility of the adaptations or change of job position, will be addressed through the dismissal procedure, will be urgent and processed on a preferential basis (new article 120.2 of the Law Regulating the Labor Jurisdiction). In any event, the new regulations do not transform termination due to permanent disability into a new case of objective dismissal, so the termination, or the court’s finding must be compliant with the law (because it is evidenced that the adaptation or change is unfeasible), will not entitle the employee to any compensation.