End of automatic dismissal due to permanent disability: Law 2/2025 comes into force

The Official State Gazette published on April 30th the Law 2/2025, of April 29, which modifies the Workers' Statute (ET), the General Social Security Law (LGSS) and the Law Regulating Social Jurisdiction (LRJS) to eliminate the automatic termination of a contract when an employee becomes a permanent disability pensioner. The regulation—inspired by the UN Convention on Disability and the ruling of the Court of Justice of the EU of January 18, 2024—represents a turning point in the labor protection of nearly 20,000 people who obtain this recognition each year.

 

What changes from now on?

Before	From May 1, 2025
The contract was automatically terminated upon declaration of permanent total, absolute or severe disability.	The employment relationship can only be extinguished If, after analyzing “reasonable adjustments”, the company proves that: • the adaptation would entail a excessive load• there is no suitable vacant position, or• the worker rejects the relocation proposal.

Step-by-step procedure

1. Notification and decision of the worker
   
   • After the INSS resolution, the employee has 10 calendar days to state in writing whether he or she wishes to remain associated with the company.
     
     
2. Suspension with reserved position
   
   • He art. 48.2 ET recognizes up to two years suspension of the contract with reservation of position while the adaptations are assessed.
     
     
3. Deadline for the company
   
   • The company has three months to make adjustments, propose another position or justify the termination.
     
     
4. “Excessive burden” criterion
   
   • The cost of adaptation is weighed against the size and resources of the company. SMEs with fewer than 25 employees, the burden is presumed to be excessive if it exceeds the compensation for unfair dismissal either six months' salary of the affected party.
     
     
5. Rapid judicial control
   
   • The new art. 120 LRJS grants urgent and preferential processing to the disputes arising from this process.
     
     

Changes in Social Security

The LGSS adapts the art. 174.5 to extend the payment of temporary disability until the permanent disability is resolved and regulate the suspension of the pension if the worker returns to an adapted position.

Next steps

The law mandates the Government to submit:

• In six months, a proposal to regulate the compatibility between pension and work.
  
• In twelve months, a specific reform for the Civil Guard, National Police and Armed Forces.
  

Social impact

Organizations such as the CERMI They celebrate the elimination of "historical discrimination" and the fact that "disability is no longer the work-related death of a worker." For companies and prevention services, the challenge will be to design clear adaptation protocols, while the courts will have a legal framework aligned with European regulations.

With Law 2/2025, Spain takes a decisive step towards a inclusive model: The contract is only terminated when the adaptation is truly impossible or unaffordable, and not simply because of a declared incapacity.