Employee total permanent disability (IPT) & Contract Termination in Spain

The ruling of the Court of Justice of the EU (Court of Justice of the EU (CJEU)) dated 18 January calls into question the automatic termination of the employment contract on grounds of total permanent disability, as provided for under Article 49.1.e) of the Workers' Statute. Should this ruling become consolidated in national case law, it could represent a significant shift in employment law: rather than allowing contract termination upon a declaration of permanent disability to operate automatically, the employer would in principle first be required to consider or implement reasonable adjustments enabling the employee to remain in post. Only where the company can demonstrate that such adjustments would constitute an undue burden would it be relieved of that obligation and, consequently, permitted to terminate the employment contract.

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TERMINATION OF THE employment contract ON GROUNDS OF PERMANENT DISABILITY: IMPACT OF THE Court of Justice of the EU (CJEU) ruling OF 18 JANUARY 2024, THE CA NA NEGRETA CASE

On 18 January 2024, the Court of Justice of the European Union issued a ruling prohibiting the dismissal of an employee with total permanent disability where the employer had made no attempt to adapt the employee's role: Case Ca Na Negreta, SL v J.M.A.R.

ruling available here.

BACKGROUND

The employee J.M.A.R. joined the company Ca Na Negreta in October 2012, working as a full-time refuse collection lorry driver.
In December 2016, he suffered a work-related accident resulting in an open fracture of the calcaneus in his right foot. As a consequence of this work-related accident, the employee was placed on temporary sick leave.
On 18 February 2018: the National Social Security Institute (INSS) issued a resolution terminating the temporary disability (IT) situation and recognising a lump-sum compensation for permanent injury in the amount of €3,120. However, by means of that same resolution, the National Social Security Institute (INSS) refused to recognise J.M.A.R. as having a permanent work-related disability within the meaning of Article 193 of the General Social Security Act (LGSS).

6 August 2018: the employee requests that the company reassign him to a different role adapted to his residual limitations. The company agrees, and the employee moves from working as a full-time motorised vehicle driver to working as a driver on the mobile collection points service, a role that was less physically demanding, required significantly less driving time, and was compatible with his physical limitations.

2 March 2020: ruling recognising the situation of total permanent disability (IPT) in respect of his usual occupation, in accordance with Article 194 of the General Social Security Act (LGSS). The ruling noted, in particular, that "regardless of the fact that the employee has been redeployed by the company and is currently able to provide services because he only needs to drive for approximately 40 minutes each day, the residual condition affecting his right ankle and foot would prevent him from driving on a continuous basis if he were required to do so full-time, as his usual occupation as a lorry driver demands."

13 March 2020: notification of dismissal under Article 49(1)(e) of the Workers' Statute, on the grounds of total permanent disability to perform his usual occupation.

POSITION OF THE Court of Justice of the EU (CJEU):

Article 49(1)(e) of the Workers' Statute is incompatible with EU law, specifically Directive 2000/78, insofar as it permits companies to terminate the employment contract of an employee in a situation of total permanent disability for their usual occupation, unless that situation is expected to improve within 2 years.
The Court of Justice of the EU (CJEU) establishes a criterion for the lawfulness of dismissal: the company is obliged to explore reasonable adjustments in an alternative role in order to ensure the continued employment of a employee in a situation of total permanent disability.
If such reasonable and necessary adjustments are not feasible to guarantee the employee's continued employment within the company, the company must demonstrate that impossibility.

IMPLICATIONS FOR SPANISH LAW:

There is a clear need to update the relevant legislation, specifically Article 49(1)(e) of the Workers' Statute.
Occupational health and safety services must assess whether an alternative role exists that is, or could be made, adapted to the situation of a employee with total permanent disability (IPT).
Evidence justifying the impossibility of reassigning the employee to another post.

THE POSITION OF THE SPANISH COURTS

employment tribunal No. 2 of Vigo has issued the first ruling in Spain to apply the doctrine established in the Ca Na Negreta case: it prevents the automatic dismissal of employees recognised as having total permanent disability. In this particular case, the company had failed to make the necessary adjustments to allow the employee to continue providing services to the employer.

Accordingly, the court declared the dismissal NULL AND VOID on grounds of breach of fundamental rights and incompatibility with Article 5 of Directive 2000/78.

ruling available here.

Cyrielle Agut abogada laboralista-circle