Labor Newsletter

PAID SICK LEAVE

Must it necessarily begin on the first working day following the triggering event?

Supreme Court ruling of 4 February 2026 (Case No. 251/2024)

There has always been considerable uncertainty as to whether staff could take the leave in question with flexibility regarding the start date, or whether this was not possible. In this case, the Company stated that the paid leave in question must necessarily commence on the first working day following the triggering event. This was challenged by the relevant trade unions in a collective dispute. The Supreme Court, upholding the ruling of the National High Court, reasoned that neither Article 37.3(b) of the Workers’ Statute, nor the applicable collective agreement, nor Directive (EU) 2019/1158 establishes a rule regarding the start date of the leave, and that the purpose of this right is to enable genuine and planned care for a family member in need of care. *The start of the leave does not have to coincide with the onset of the event, but must begin whilst it persists*

PAID SICK LEAVE

Can the five-day statutory sick leave period begin after discharge from hospital?

SAN of 19 February 2026 (Case No. 415/2025)

In the case under consideration, the dispute centred on determining whether paid leave for serious accident or illness, hospitalisation or surgery requiring a family member to provide care at home may commence once hospitalisation has ended, when the family member is already at home, continues to require care and has not yet been discharged from hospital. The National High Court rejects this possibility. It reasons that the event giving rise to the leave remains directly linked to the hospitalisation, and therefore its commencement cannot be deferred to a time after its conclusion. However, it does accept that, if the leave was taken whilst the protected situation persisted, its duration may be extended until medical discharge. The ruling clarifies that there is no separate leave entitlement to provide home care once hospitalisation has ended. *Both rulings indicate limited flexibility regarding the five-day leave entitlement for serious illness or hospitalisation of family members: (i) its commencement is not rigidly linked to the first working day following the triggering event, and (ii) it cannot be activated once hospitalisation has ended*

REDUNDANCY AND MENTAL HEALTH

Does an employee’s mental illness ‘mitigate’ their liability for breach of contract?

Judgment of the High Court of Justice of the Basque Country, Labour Chamber, of 11 November 2025 (Case No. 1721/2025) The judgment sends a particularly important message to employers regarding disciplinary matters: the imposition of disciplinary measures requires particularly careful consideration when, following the alleged misconduct, the employee enters a period of temporary incapacity linked to mental health conditions. In such cases, conduct that appears objectively serious may nevertheless fail to meet the required degree of subjective culpability to justify disciplinary dismissal. In the case under review, although the employee’s conduct was initially classified as acts of insubordination and indiscipline and led to the dismissal being upheld at first instance, the Supreme Court of Justice (TSJ) corrected this approach, finding that the intentional element of culpability was mitigated by the concurrent clinical context. The Chamber does not deny the objective nature of certain breaches, but considers that these were the result of defensive and disproportionate reactions linked to the employee’s mental state, rather than malicious conduct consciously and deliberately aimed at breaching contractual good faith. *The ruling reinforces the need for extreme caution before imposing sanctions — and particularly before agreeing to a disciplinary dismissal — where there are indications of mental health issues*

ABSENTEEISM AND BENEFITS

Can a collective agreement penalise absenteeism?

SAN of 26 January 2026 (Case No. 384/2025) Since the publication of Law 15/2022 on equal treatment and non-discrimination, companies have faced significant difficulties in dealing with situations of temporary incapacity, given the high risk that any adverse measure might be deemed discriminatory. The trade union side challenged certain passages of a clause in the Collective Agreement that penalised absences, even when justified, by depriving the worker concerned of certain benefits and improvements. The National High Court has declared these clauses null and void, on the grounds that they discriminate on the basis of illness or health status: reducing absenteeism, even through a Collective Agreement, is a legitimate business objective, provided it is not achieved through discriminatory measures, in this case on the grounds of illness or health condition. *The National Court concludes that, although reducing absenteeism is a legitimate objective, it cannot be achieved through clauses that disadvantage workers on the basis of their state of health*  

ABSENTEEISM AND BENEFITS

Can the IT situation affect standard variable pay?

Supreme Court Judgment of 12 February 2026 (Case No. 264/2024) In the present case, the employee claims that it is discriminatory for the company’s collective agreement to stipulate that, in order to qualify for performance-related bonuses, an employee must have worked for between three and twelve months during the relevant year and, once the three-month threshold has been met, to penalise employees who are on sick leave for common illness when it comes to receiving such payments. The Supreme Court considers that the company may reduce the performance-related bonus for staff who have not provided services due to being on temporary incapacity leave. It justifies this on the grounds that temporary incapacity leave suspends the contract and there is no obligation to maintain the variable remuneration in full during such periods. However, on the other hand, it considers it unlawful to use common illness to prevent employees from reaching the minimum threshold of three months required to qualify for the bonus, because this is no longer a matter of simple proportionality, but rather a genuine retention or attendance clause with a detrimental effect on the grounds of illness. *The Supreme Court protects variable remuneration against illness to prevent discrimination on health grounds. In order to apply reductions to variable remuneration for the duration of sick leave, such a limitation must be provided for in the applicable collective agreement and must be proportionate*