- Law 2/2025 came into force on 1 May and removes automatic termination of the contract for permanent disability.
- The employer must assess reasonable adjustments or a compatible post, and may terminate only if neither is possible, with a reasoned decision.
- Deadlines are short: 10 days for the employee to state their wishes and three months for the employer to decide.
On 30 April 2025 the BOE published Law 2/2025 of 29 April, which amends the Workers’ Statute and the General Social Security Act on termination of the employment contract for permanent disability. It came into force on 1 May and changes a rule that for decades operated almost automatically: until now, a declaration of total, absolute or severe permanent disability allowed the contract to be ended without further formalities.
From now on, the employer must first consider whether it can adapt the job or relocate the person. The reform responds to European case law, in particular the judgment of the Court of Justice of the EU of 18 January 2024, which held that terminating without first examining reasonable adjustments is contrary to the equal-treatment directive. For companies, it means a new procedure that is worth knowing and planning for.
What changes in the contract
The law creates a new ground for termination in article 49.1.n) of the Statute. The employer may terminate the contract for total, absolute or severe permanent disability only when reasonable adjustments would impose an excessive burden, when there is no vacant and available post matching the profile and compatible with the new situation, or when the person refuses a change of post that is properly offered.
While this is being resolved, the suspension of the contract with reservation of the post continues. Prevention services determine the scope of the adjustments, after consulting workers’ representatives on prevention. Cases of termination on this ground are also handled through an urgent court procedure with preferential processing, which speeds up possible litigation.
Deadlines and excessive burden
The employee has ten calendar days from notification of the decision to state in writing their wish to keep the employment relationship. The employer has at most three months from that notification to make the adjustments or change the post. If that is not possible, it has the same period to terminate the contract, with a reasoned decision communicated in writing.
The law defines excessive burden by the cost of the adaptation in relation to the size, resources, financial situation and turnover of the company, and it is not considered excessive if public aid sufficiently offsets it. In companies with fewer than 25 employees, it is deemed excessive if the cost, without aid, exceeds the greater of two amounts: the unfair-dismissal compensation or six months’ salary.
What to review
Companies should have a protocol for when an employee receives a disability decision: who receives it, who assesses the job with prevention, what vacancies exist and how the decision is documented. It is worth identifying in advance the jobs that can be adapted and the public aid available, because its existence influences the assessment of the burden. A common case is that of the person granted a total disability who could still perform other functions in the company with a change of post.
Ongoing cases and collective-agreement or contract clauses that provide for automatic termination should also be reviewed in light of the new rule. Social Security also provides that the pension is suspended while the person performs the compatible post. This is an area where labour advice is advisable, because a procedural error can end up in litigation.
Before ending a contract for disability, the employer will have to show that it looked for another solution.
This article is general information. It is not legal, tax or investment advice, and it does not take anyone’s particular circumstances into account.
