During the opening of the event, Luis Enrique Fernández Pallarés highlighted the significance of absenteeism linked to temporary incapacity, underlining that “it has become one of the main structural challenges of the Spanish labour market, both because of its quantitative dimension and its impact on the organisation of work and the sustainability of the system.” In this regard, he emphasised the need to approach the debate in a technical and rigorous manner, enabling the causes of the increase in temporary incapacity proceedings to be accurately identified and balanced solutions to be found.

María José López Álvarez went on to give an overview of the current state of temporary incapacity, providing data to contextualise the magnitude of the phenomenon, especially after the COVID-19 pandemic. For López Álvarez, “the analysis of absenteeism requires a proper differentiation between situations of legitimate health protection and possible dysfunctions in the management of the system”, putting forward as a first issue the causes that have led to the increase in temporary incapacity processes in recent years.

Similarly, Javier Pacheco pointed to a number of concurrent factors, including the employment cycle itself, the general deterioration of health observed in the population, the transformation of employment relationships derived from the arrival of new technologies and the National Health System’s lack of resources. “The phenomenon cannot be explained from a single cause, but rather as the result of structural changes in employment, health and work organisation,” said Pacheco.

Rosa Santos then spoke, and after noting that “Spain is a world leader in temporary incapacity due to common contingencies”, she pointed out that “the shortage of health professionals, the lack of coordination between administrations and the weakness of control mechanisms are the main causes to which, as an accelerator, the complements of the agreements to the benefits may be contributing.” According to her, “we are facing a phenomenon that compromises the health of working people and is having a direct impact on the productivity and competitiveness of companies while increasing the financial pressure on the National Institute of Social Security.” Rosa Santos put the Temporary Incapacity due to Common Contingencies bill, which is paid equally by the INSS and Spanish companies, at €33 billion.

In the final part of the debate, the moderators invited the speakers to make concrete proposals aimed at mitigating the current situation, insisting that “the scale of the problem calls for solutions that combine more efficient management of processes with full respect for the rights of workers.” Among the measures proposed, Pacheco highlighted the need to develop the 5^th Agreement for Employment and Collective Bargaining, promoting the role of mutual insurance companies in traumatological processes, strengthening coordination between the workplace and health surveillance, and greater investment in health resources and prevention. For his part, Santos agreed on the need to strengthen the health system’s resources and coordination, and proposed, among other things, bringing forward the monitoring of sick leave from the start of the process, particularly in cases of repeated sick leave due to various pathologies, with the collaboration of the mutual insurance companies if deemed necessary.

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Daniel Cifuentes opened the seminar by highlighting absenteeism as one of the main challenges facing companies today, due to its high rates. The Pérez-Llorca partner noted that “absenteeism has become one of the biggest concerns for companies, not only because of its economic impact, but also because of its organisational and people management implications.” He also announced that the government will set up the Temporary Incapacity Observatory, as a measure aimed at analysing and alleviating this problem.

On the subject of collective bargaining, Cifuentes analysed the recent proposals from CCOO and UGT, the main Spanish trade unions, on the 6^th Agreement for Employment and Collective Bargaining, while Yolanda Valdeolivas went on to discuss their main novelties and possible practical impact. At this point, the speakers preliminarily introduced the issue of gender pay equity, which was expanded upon later on in the session.

The event also addressed new trends in whistleblower protection, highlighting the creation of a specific channel on the Independent Authority’s website for receiving disclosures and the challenges that its implementation will pose for companies.

With regard to the outlook for the labour market, the speakers made reference to both the International Labour Organisation’s annual report on artificial intelligence and the survey published by the Spanish Chamber of Commerce, highlighting the technological and organisational transformation that companies are undergoing. In this context, Valdeolivas noted that “the increase in contributions approved for 2026 and the strengthening of certain administrative obligations create a more demanding scenario for companies.”

In the event’s second section, dedicated to the case law chronicle, the speakers carried out an exhaustive review of the most significant decisions handed down by the Constitutional Court, the Court of Justice of the European Union, the Spanish Supreme Court and the Spanish High Court during the months of October, November, December and January. They analysed rulings made on a number of matters, including employer contributions to the Public Treasury, temporary disability supplements, work-life balance, changing collective agreements, substantial modifications to working conditions, parental leave under Article 48 bis of the Workers’ Statute, freedom of association, privacy of salary data and various issues related to working time.

Then, following the usual ‘Pérez-Llorca Labour Law Update’ session format, Cifuentes and Valdeolivas presented the top three most significant judgments from recent months. This time, first place went to judgments on absenteeism and its impact on salary, highlighting the Supreme Court rulings of 14 and 16 January 2026, which consider it discriminatory to exclude periods of Temporary Incapacity from the accrual of attendance bonuses or variable remuneration, as opposed to rulings from the Spanish High Court, such as the one handed down on 6 October 2025, which endorse the proportional apportionment of incentives when the absence is not unduly penalised.

In the final part of the session, the speakers addressed the key aspects of Directive 2023/970, which strengthens pay transparency obligations. As Valdeolivas explained, this regulation does not replace the existing regime in Spain, but rather adds new obligations aimed at strengthening the culture of transparency. In this respect, the firm’s Of Counsel noted that “the Directive introduces a paradigm shift by extending the right to information, which no longer focuses exclusively on the legal representation of workers but also extends to individual workers.” She also warned that, given the specificity of its mandates, certain provisions could be susceptible to direct application if not correctly transposed by 7 June 2026.

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Manel Hernàndez began the seminar by setting out the latest and most significant judicial rulings, the impact of the new Sustainable Mobility Law on the workplace and a review of the most recent case law from the Spanish Supreme Court and the Spanish High Court. In this regard, Hernàndez stressed that “companies are facing a particularly intense start to the year from a regulatory point of view, with major changes that require advance planning and a strategic approach”.

Yolanda Valdeolivas then addressed the main regulatory developments from the beginning of the year. In this context, he highlighted the repeal of Royal Decree-law 16/2025, with the consequent absence of automatic updates to matters such as the minimum interprofessional wage (SMI) and contribution bases. However, he pointed out that the government has announced an agreement with business and trade union representatives to increase the minimum wage by 3.1%, to €1,221, an increase that is expected to be approved soon by Royal Decree.

Valdeolivas also detailed the changes announced regarding Social Security, including the increase in the maximum contribution base to €5,101.20, the increase in the Intergenerational Equity Mechanism to 0.90%, as well as the progressive application of the Additional Solidarity Contribution on salaries that exceed this maximum base. “We are facing a scenario of sustained increases in labour costs that are forcing companies to review their remuneration and contribution policies,” said Pérez-Llorca’s Of Counsel.

One of the central points of her speech was the analysis of the Pay Transparency Directive, which must be transposed by 7 June 2026. As Valdeolivas explained, this regulation will strengthen the principle of equal pay for work of equal value and will impose new obligations on companies in terms of pay transparency, both at the pre-employment stage and internally and in terms of workers’ right to information. In this respect, she stressed that “the focus is not so much on the existence of wage differentials, but on whether they can be justified on objective and non-discriminatory grounds”.

Manel Hernàndez went on to discuss the implications of the Sustainable Mobility Law, promoted by the Ministry of Transport, for the workplace. According to him, the regulation introduces the obligation for certain companies to have a Sustainable Mobility Plan, which must be operational as of 5 December 2027 and be negotiated with the workers’ legal representatives. In Hernàndez’s words, “mobility is no longer a purely logistical issue but a business responsibility with a direct impact on work organisation.”.

These plans, which will affect companies with workplaces with more than 200 employees, or 100 employees per shift, must include measures to promote more efficient and sustainable mobility, including active mobility, public transport, shared mobility or the use of vehicles with a lower environmental impact, as well as the possibility of implementing working from home as a tool to reduce travel.

Lastly, following the usual ‘Pérez-Llorca Labour Law Update’ session format, the top three most significant judgments from recent months were presented. This time, first place went to the judgment of the Spanish Supreme Court handed down on 22 December 2025, which establishes that, in dismissals due to supervening incompetence, it is up to the company to prove that it has tried to adapt the job or relocate the worker, or that such adjustments represent an excessive burden. In this context, París pointed out that “the Supreme Court requires companies to make a particularly rigorous evidentiary effort before resorting to contract termination”.

The session concluded with a question and answer session, in which attendees were particularly interested in the practical impact of the Wage Transparency Directive and the challenges that its transposition will pose for organisations in the coming months.

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Daniel Cifuentes began the seminar by reviewing the most significant regulatory developments, including the new draft Royal Decree on working time registration, which aims to develop article 34.9 of the Workers’ Statute. As Yolanda Valdeolivas noted, “this reform aims to provide greater legal certainty as to what is considered working time and to ensure more effective control of overtime.”

The firm’s Of Counsel also pointed out the significance of the Sustainable Mobility Bill, which will oblige companies with more than 200 workers, or more than 100 per shift, to negotiate sustainable mobility plans, and the Strategic Plan of the Labour and Social Security Inspection Authorities for 2025-2027, aimed at controlling working hours, equal pay and the prevention of psychosocial risks. This part of the session also covered the guidance document on reasonable adjustments for people with disabilities, which came into force in May 2025, and the recent European Working Conditions Survey, which, according to Valdeolivas, “shows an improvement in the quality of employment in Europe, but also highlights persistent inequalities in terms of gender and working conditions.”

Cifuentes then went on to review the most significant rulings handed down by the Supreme Court, the Spanish High Court and the Constitutional Court over the past few months. These included decisions on the consideration of certain activities as own-activity contracts, the justification of travel for per diem purposes, the adaptation of working hours for the care of disabled descendants and possible discriminatory situations arising from temporary disability. The Pérez-Llorca partner highlighted in particular the Spanish High Court ruling of 4 July 2025, the first to analyse workers’ legal representatives’ right to information on the use of algorithms in the workplace. “This is a pioneering ruling that will set the standard for trade union transparency and control over automated labour management systems,” Cifuentes stressed.

Cifuentes also covered decisions examining employer conduct that may violate freedom of association or constitute a substantial modification of working conditions, as well as others concerning collective bargaining and the proper use of trade union credit. In this regard, a number of rulings on pay, remote working and effective working time were also addressed, along with a resolution on transfers as a form of geographical mobility.

Then, following the usual ‘Pérez-Llorca Labour Law Update’ session format, Cifuentes and Moya presented the top three most significant judgments from recent months. This time, first place went to the Supreme Court Ruling handed down on 16 July 2025, which deals with severance pay for unfair dismissal. The ruling establishes that the compensation established in Article 56 of the Workers’ Statute cannot be increased through the courts to include additional compensation based on the specific circumstances of the case, as this would violate Article 10 of Convention 158 of the ILO and Article 24 of the revised European Social Charter. “This is a judgment of particular practical significance, which reaffirms the criterion of legal certainty in compensation matters,” Cifuentes said.

To end the session, Cifuentes and Moya offered a practical guide on how to deal with a dismissal, addressing the main risks that may arise from a termination decision. They analysed the thresholds that determine whether there is a collective dismissal, the procedures and deadlines for communicating this dismissal, as well as economic and contractual aspects such as variable remuneration, taxation of severance pay, post-contractual non-compete agreements and implications for data protection. “The aim is for companies to make informed decisions, taking into account not only the immediate costs, but also the associated legal risks,” Moya concluded.

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In her speech, Yolanda Valdeolivas reviewed the latest pension reforms, highlighting the new features introduced by Royal Decree-law 11/2024, which has been in force from 1 April 2025. Among them, she explained the changes in active retirement, which makes it possible to combine pension and work depending on the delay in retirement age; partial retirement, which requires the hiring of a full-time replacement; and delayed retirement, which provides financial incentives for voluntarily delaying retirement.

Valdeolivas also analysed trends in working hours, marked by the collapse of the Working Time Reduction Bill, which failed to achieve the necessary parliamentary support. In this context, she noted that the government seems determined to strengthen the rules on registering working hours, which is seen as one of the key measures in the coming months.

Valdeolivas also explained the reform introduced by Royal Decree-law 9/2025, which extends the birth and childcare leave financially compensated by a Social Security benefit by three additional weeks, so that one of the extended weeks can be taken until the child is 12 months old, while the other two are recognised until the child is 8 years old, with no change to the parental leave regime. There is also more protection for single parents, who accumulate the leave that would have corresponded to the other parent.

Case law chronicle: Gold, silver and bronze

Manel Hernàndez went on to present a selection of the most significant rulings handed down by the Supreme Court and the National High Court between June and September 2025, on matters such as salary supplements, the employer’s disciplinary powers and accidents at work.

Hernàndez highlighted three key rulings, awarding them gold, silver and bronze medals in order of their significance:

• Gold medal: Supreme Court ruling of 16 July 2025, which confirms that it is not appropriate to judicially increase the compensation for unfair dismissal, considering that the compensation provided for in the Workers’ Statute is sufficient.
• Silver medal: Supreme Court ruling of 1 July 2025, which allows for the unilateral submission of an Equality Plan when trade unions are unjustifiably absent from negotiations.
• Bronze medal: Spanish High Court ruling of 30 June 2025, which specifies that, in collective dismissals, providing extensive documentation alone is not sufficient; rather, this documentation must be intelligible, so as to enable the representative committee to obtain sufficient and verified information on the causes of the dismissal.

The session concluded with a question-and-answer session in which participants discussed the practical implications of these new regulations and case law for both companies and workers.

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Yolanda Valdeolivas began the session by reviewing the main throughlines of the planned labour reform, such as the new registration of working hours and termination due to permanent disability, underlining the impact they will have on employers’ obligations. “We are witnessing a legal paradox: measures are being demanded in court that do not yet derive from an existing regulation,” she warned. She also pointed out that the lack of support for SMEs compromises the effectiveness of reforms in risk prevention, especially those concerning mental health or gender. On wages and working hours, respectively, Pérez-Llorca’s Of Counsel highlighted the average increase of 3.35% and the progressive reduction towards 37.5 hours per week. Daniel Cifuentes went on to present the most significant rulings of the past few months on maternity, paid leave and protection of privacy, among others. He discussed this topic in depth, covering important decisions relating to collective bargaining and trade union representation rights. These included the scope of company agreements and the validity of remote voting in trade union elections.

Cifuentes then presented the top three most significant judgments of from the past few months. Firstly, he analysed the Supreme Court’s ruling on 22 July 2024, which confirmed that recordings of private conversations are valid as long as they are made by one of the participants and do not breach privacy rights. These recordings can be used as evidence in legal proceedings, provided that their authenticity (i.e. that they have not been tampered with) is proven and that the person making the recording is part of the conversation. In this context, the Pérez-Llorca partner highlighted the case of the disciplinary dismissal of an employee for recording all of their conversations within the company. “The decision of the High Court of Justice of the Canary Islands established that the hidden and constant recording of all conversations leads to the inevitable loss of confidence on the part of the company, which led to disciplinary dismissal for breach of contractual good faith,” said Cifuentes.

To conclude the session, Cifuentes and Moya offered a practical guide on how companies should act when faced with internal whistleblowing in the light of the Whistleblowing Regulation. Moya explained that, due to the abusive way in which some workers are using the complaint channels, “what we are always suggesting is to carry out a preliminary analysis before opening an investigation directly, considering the cost to the company.” Cifuentes stressed that the duty to investigate arises as soon as the company becomes aware of facts that may affect the safety and health of workers, regardless of the channel through which the information was received: “The company must be prepared to react to any indications, even if a formal complaint has not been lodged through the established channels.”

With regard to the structure and scope of investigations, both experts agreed on the need to ensure the objectivity of the procedure. Moya recommended having a collective and independent body, with mechanisms to avoid conflicts of interest, especially when the Human Resources department may be involved. “The law allows for a great deal of flexibility, but it is important that the procedure is clearly regulated,” he said.

Finally, key issues such as the length of the procedure, confidentiality of files, and balancing the anonymity of complainants with the right to a fair defence for those under investigation were addressed. “Although in practice it is difficult to preserve complete anonymity, the important thing is that we are not the ones who reveal it directly,” said Cifuentes. Both agreed that the best practice is to document the interviews in verbatim records that are signed by the parties and returned with any comments they deem appropriate. With regard to time limits, Moya clarified that “although the law establishes a maximum duration of three months, which may be extended, in labour matters it is essential to keep a continuous record of the proceedings so as not to compromise the statute of limitations or the validity of the procedure.”

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During the session, the experts addressed some of the most controversial issues surrounding the use of artificial intelligence in the workplace. These included the obligation of companies to train their employees in the use of this technology, the protection of corporate knowledge against the use of AI systems, and the adequacy of data protection rules in relation to digital communications and the geolocation of workers.

Luis Enrique Fernández Pallarés introduced the speakers and opened the discussion by highlighting the challenges posed by artificial intelligence in the legal field. He noted that the current regulatory framework is still emerging and unbalanced across jurisdictions, despite progress in the EU: “We have strong regulation in Europe, but its effectiveness is relative in an increasingly globalised world.”

During his speech, Salvador del Rey Guanter emphasised that artificial intelligence is no longer the technology of the future, but of the present, although it can sometimes be perceived as an abstract concept. He analysed the complex regulatory framework, describing it as “mixed”, integrating both labour law and general regulation, and highlighted the gradual entry into force of the EU’s AI Act, as set out in Article 113 of said Act.

Del Rey Guanter underlined the disruptive nature of AI in the field of industrial relations, especially insofar as business decisions may become partially or fully determined by automated systems. “We are introducing a machine that makes decisions on essential matters, which may even affect fundamental rights,” he said, alluding to the legal challenge this poses.

Following on from this, the professor emphasised the need for employees to receive digital literacy training on how to use these technologies, recalling the Right to Training set out in Article 4 of the Workers’ Statute and in Article 19 of the Law on Occupational Health and Safety. “Workers need to be aware of the risks that AI can pose to their fundamental rights, especially when they themselves power the systems by using them,” he said.

He also referred to Article 5 of the AI Act, which prohibits certain practices such as those using subliminal techniques to distort workers’ behaviour. Accordingly, he warned about the risks arising from the intensive use of AI systems with exponential learning capabilities, which can progressively influence professional performance.

Lastly, Del Rey Guanter addressed other relevant issues such as the right to privacy in the use of digital devices in the workplace, the impact of AI on patent, design and intellectual property regulations, as well as on the protection of business secrecy, citing article 65 of the Workers’ Statute.

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Manel Hernàndez opened the event by introducing the speakers and addressing the main trends that will shape employment law over the coming months. These included the impact of the US tariffs on strategic sectors of the Spanish economy, with a particular focus on labour planning for affected companies, as well as the concerning rise in absenteeism. “The 10.5% increase in sick leave due to common contingencies requires companies to combine control measures with respect for workers’ rights,” said the Pérez-Llorca partner. In this regard, he proposed a review of temporary incapacity allowances, as well as the adoption of individualised follow-up policies as preventive tools, always within the legal framework and with full respect for workers’ privacy.

Hernández also highlighted the Draft Law on Industry and its regulation on prior warnings in the event of industrial capacity loss. He pointed out that this regulation introduces the requirement to file a specific prior notification, nine months ahead of time, with the Secretary of State for Industry and the workers’ legal representatives when a company plans a reindustrialisation process. “This obligation affects scenarios such as a 65% reduction in the workforce, 500 redundancies at one site or the loss of 750 jobs in one region. We are talking about a notice period which, due to its length, can create unnecessary rigidities in business decision-making,”·he explained.

Then, following the usual ‘Pérez-Llorca Labour Law Update’ session format, Marc París analysed the top three most significant judgments from recent months. These included the Supreme Court ruling of 5 March 2025 on contract succession, which prevents companies from avoiding subrogation through prior agreed dismissals. “This strengthens the protection of workers against strategies that seek to circumvent the application of Article 44 of the Workers’ Statute,” Paris explained.

In the third part of the conference, Raúl Rubio gave a comprehensive overview of the new regulatory framework on artificial intelligence and its application to the workplace. He began his speech by reflecting on the current context, where technological progress has overtaken regulatory development. “We are facing a similar scenario to the one we are experiencing with data protection regulations, where technology is moving faster than the law, creating additional complexity when it comes to ensuring legal compliance,” said the Pérez-Llorca partner.

In this regard, Rubio provided a detailed analysis of the EU AI Act’s implementation timetable, highlighting 2 August 2025 as a key date, when the sanctioning regime will be fully operational. He explained that the regulation will be rolled out in several phases, starting with the entry into force of the general provisions and unacceptable practices in February 2025 and concluding in August 2027 with the implementation of the obligations for high-risk systems. On this point, he stressed that the Act has an extraterritorial scope, as it affects both European companies and those operating in the EU market, and uses linked to national security are expressly excluded.

During his speech, Rubio also elaborated on the regulatory model based on the risk levels of AI systems (unacceptable, high, limited or low) and its implications in the workplace. “Inferring emotions in work or educational settings will be prohibited, except in cases justified for medical or safety reasons,” he warned. Furthermore, he warned of the seriousness of failing to comply with the obligations imposed by the Act, which could lead to severe infringements. In this context, he mentioned that the Draft Law for the Proper Use and Governance of AI, which is currently being processed, will complement the European AI Act and develop the sanctioning regime in Spain.

To conclude the session, the firm’s partner highlighted the importance of establishing robust governance models to ensure the ethical and lawful use of AI in organisations. “The key is to clearly define the roles, responsibilities and chains of command of all those involved. Only then will we be able to build solid structures that integrate artificial intelligence into business processes with maximum legal guarantees,” he said.

The event ended with a question-and-answer session addressing the main practical challenges posed by the implementation of the new regulatory framework in human resources and people management policies.

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In general, employers can only unilaterally terminate employment contracts if they have just cause (which implies a very serious breach of the duties incumbent upon workers) or based on objective reasons. Employment contracts can only be validly terminated by: (i) mutual agreement between the parties; (ii) termination of the contract during the probationary period; (iii) expiry
of fixed-term contracts (definite or indefinite), upon reaching their term; (iv) expiry due to supervening, absolute, and definitive impossibility for the worker to perform their work or for the employer to receive it; (v) expiry upon the worker’s retirement due to old age or disability; (vi) expiry determined by the death of the employer or the dissolution or closure of the company (in the case of legal entities); (vii) insolvency and business recovery; (viii) dismissal with just cause (this may occur whenever a worker commits a disciplinary offence that is serious, and its consequences make it immediately and practically impossible for the employment contract to remain in force); (ix) collective redundancy; (x) dismissal due to the elimination of a job position; (xi) dismissal due to worker’s unfitness; (xii) abandonment of the job.

You can read the full guide here.

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With more than 25 years of experience, Juan José Soto Arias is a leading lawyer in this practice area, with a solid track record advising national and foreign companies in all areas of employment law, from M&A transactions to individual and collective labour disputes. He is also a professor of Employment Procedural Law at the Universidad Panamericana and has lectured at various academic institutions such as the Universidad Nacional Autónoma de México, the Universidad del Nuevo Mundo, the Universidad Humanitas, the Universidad del Valle de México and the New Element University.

Soto Arias joins Pérez-Llorca’s Mexican Employment team to strengthen a practice that is growing in importance in the Mexican economy and which currently consists of Luis Enrique Cervantes, Employment partner, and Santiago Villanueva, Social Security partner.

Jorge Mondragón, Country Chair of Pérez-Llorca Mexico, stressed the importance of this appointment: “Juan José’s arrival strengthens our ability to offer our clients comprehensive advice on employment law matters, in a context where talent management and regulatory compliance are at the heart of the business strategies of major companies operating or planning to operate in our country.”

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