Labour reform: what your company must do in the event of permanent disability

From April 30, 2025, companies can no longer automatically terminate the contract of an employee declared to be in a situation of permanent disability (total, absolute or severe disability) without first assessing adaptation or reassignment measures. This is established by Law 2/2025, which reforms the Workers’ Statute and the General Social Security Law, introducing a new paradigm in managing staff with newly acquired disabilities.

This legal change, aligned with European regulations and international treaties on the rights of people with disabilities, brings new obligations for employers, especially concerning non-discrimination and equal opportunities in the workplace.

What changes in the Workers’ Statute with the reform?

Law 2/2025 introduces three key changes in the consolidated text of the Workers’ Statute (hereinafter WS):

End of automatic dismissal

Automatic contract termination due to any type of permanent disability is eliminated. Under Article 49.1 of the WS, the company may now only terminate the contract if:

• Reasonable adjustments are not possible without undue hardship.
• There are no vacant positions compatible with the employee’s condition.
• The employee rejects a suitable position.

Contract suspension with job reservation

In cases where the permanent disability can be reviewed due to improvement, the contract is suspended for up to two years, with job reservation. This is set out in Article 48.2 of the WS.

Determination of undue hardship

In companies with fewer than 25 employees, undue hardship will be presumed if the cost of adjustments exceeds the greater of the following two amounts: the dismissal compensation or 6 months of the employee’s salary.

Deadlines and obligations

• The employee has 10 days to express their intention to remain in the company.
• The company has up to three months to implement adaptation measures or to proceed with termination in a reasoned and documented manner.

What changes in the General Social Security Law with the reform?

The reform also amends Article 174.5 of the General Social Security Law to align the benefits for temporary and permanent disability with the new obligations regarding workplace adaptation.

Reassignment and pension suspension

If the company adapts the position or reassigns the employee, the disability pension payments are suspended, encouraging a return to work.

Extension of economic effects

In situations of medical discharge with a permanent disability proposal, or after reaching the maximum duration of temporary incapacity (545 days), economic effects continue until a final decision on the classification is issued.

Effective date and regulatory development

Law 2/2025 came into force on April 30, but regulatory development on several key aspects is still pending. The Government is required to present and regulate:

1. Compatibility between employment and permanent disability
   Within six months, a legislative proposal must be prepared to allow certain cases of permanent disability to be compatible with professional activity, reinforcing the principle of labour inclusion.
2. Adaptation of special regimes
   Within a maximum of twelve months, a specific proposal must be presented to adapt the legal framework of the Civil Guard, National Police, and Armed Forces, including the possibility of reassignment or change of post due to disability.

What risks do companies face if they fail to adapt?

• Penalties for discrimination and violation of fundamental rights.
• Labour disputes and legal claims, processed on an urgent and priority basis.
• Reputational damage, especially in public tenders or corporate responsibility programmes.

✅​ At Adlanter, we help you implement this new regulation safely, clearly and without complications. Explore our advisory services in dismissals and labour disputes to protect your company and support well-informed decision-making.