Employment and pensions

News on employment contract termination and permanent disability in Spain

Published on 31st Jan 2024

The Court of Justice of the European Union ("CJEU") has declared that the automatic termination of an employment contract due to the employee's total permanent disability is contrary to Directive 2000/78. Therefore, the CJEU requires employers to take reasonable and appropriate measures to preserve employment  before proceeding with the employee's dismissal

Judgment of the CJEU in case C- 631/2022 dated 18 January 2024

On the one hand, article 49.1.e) of the Workers Statute provides that the employment contract can be terminated "on the death, severe disability or total or absolute permanent disability of the employee".

On the other hand, according to Article 5 of Directive 2000/78, the employer needs to take reasonable adjustments before terminating the employment contract of an employee with disabilities. This requirement is aimed to preserve employment of the disable employee.

In light of on the above, the CJEU declares that article 49.1 e) of the Workers Statute breaches Article 5 of Directive 2000/78, since:

  1. does not impose an obligation on the employer to take appropriate measures to enable disabled employees to continue to provide services; and
  2. it equates total permanent incapacity (which disqualifies the employee from their usual occupation but may engage in another occupation) with absolute permanent incapacity (which disqualifies the employee from any occupation), making the employee's incapacity an automatic cause for termination, even if the affected person could carry out another activity.

Finally, the CJEU points out that the adoption of appropriate measures cannot create an excessive burden of costs for the Company. Therefore, account will be taken in each specific case of: (i) the financial costs involved; (ii) the size, financial resources and volume of business; and (iii) the availability of public funds or economic aid.


* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

Connect with one of our experts

Interested in hearing more from Osborne Clarke?