On January 3, 2024, the Boletín Oficial del Estado (BOE) [Official State Gazette] published Organic Law 1/2025 of January 2, introducing measures to enhance the efficiency of the Public Justice Service. This regulation changes the labour laws in Spain, directly affecting businesses by modifying the Workers’ Statute (ET) and the Law Regulating Social Jurisdiction (LRJS). It will take effect on April 3, 2025.
Below, we analyse the main changes introduced in the Workers’ Statute.
Amendment to Article 50 of the Workers’ Statute: Termination of the Contract Due to Employer Breach
Article 50 of the Workers’ Statute regulates cases where a worker can request the termination contract when there is a serious breach by the employer.
One reason to request this termination is non-payment or late payment of wages, which previously led to legal uncertainty due to a lack of clear criteria.
Organic Law 1/2025 establishes a distinct framework for defining serious wage delays in specific situations:
- Failure to pay wages within 15 days of the agreed date
- Accumulation of three unpaid monthly wages within a year, even if they are not consecutive
- Repeated delays in salary payment over six months, even if they are not consecutive.
Until now, case law has analysed wage delays on a case-by-case basis to determine if they justified contract termination. With the new reform, objective criteria clarify when workers can legally end their employment and receive compensation equivalent to unfair dismissal.
Implications for Businesses
- Increased risk of litigation: Clear criteria for contract termination due to non-payment or late wages increase the likelihood of workers resorting to this measure in case of employer breaches.
- Financial costs: Companies could face significant compensation payments equivalent to unfair dismissal if they fail to meet their wage obligations.
- Corporate reputation: Wage violations and potential contract terminations could negatively impact a company’s image in the labour market.
Ensuring timely compliance with wage obligations will be crucial, as any breach could lead to contract termination at the worker’s request, resulting in compensation costs and potential legal claims.
Amendment to Article 53 of the Workers’ Statute: Restoration of Automatic Nullity in Certain Dismissals
Another key amendment introduced by Organic Law 1/2025 is the correction of Article 53 of the Workers’ Statute, restoring the automatic nullity of certain dismissals, which had been affected by an error in the Gender Parity Law.
Starting April 3, 2025, restoration of the nullity of dismissals for workers who have exercised rights related to work-life balance, specifically in the following cases outlined in Articles 34.8 and 37 of the Workers’ Statute:
- Work schedule adjustments for work-life balance: Protection of employees who request modifications to their working hours to accommodate family responsibilities.
- 5-day paid leave: In cases of hospitalisation, serious illness, accidents, or surgery involving family members up to the second degree of kinship or affinity.
- Reduced working hours: due to premature birth or postnatal hospitalisation of a child.
- Lactation leave: The right to absences or reduced working hours to care for children under nine months old.
- Reduced working hours for family care: Applicable in cases involving children under 12, people with disabilities, or dependent family members.
Implications for Businesses
- Review of dismissal policies: Companies must ensure that their dismissal decisions do not affect workers who have exercised work-life balance rights, as they could be declared null and void.
- Mandatory reinstatement: In cases of null dismissals, companies must reinstate the employees, which may lead to additional costs and operational disruptions.
- Training and awareness: Organisations must provide essential training to HR teams and middle managers, focusing on work-life balance rights and the legal repercussions of violating these rights.
Businesses must review and update their internal policies to comply with these changes, uphold work-life balance rights, and prevent practices that lead to null dismissals.
Conclusion
Organic Law 1/2025 introduces significant changes that require businesses to take a proactive approach. Failure to comply with wage obligations and work-life balance rights could lead to serious legal and financial consequences, including high compensation payments or the mandatory reinstatement of dismissed workers.
Macrin Zorrilla
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