Termination of the employment contract due to illness, ineptitud or incapacity of the employee

Abstract

From its inception, the labor legislation has recognized the possibility of terminating an employment contract when the employee fails to fulfill their contractual obligations due to health-related circumstances—whether as a result of a declared permanent disability, diminished work performance, or repeated absences—thereby altering the contractual equilibrium. What has evolved over time are the legal mechanisms which govern these terminations. Despite the passage of time, the regulation of this matter continues to exhibit significant gaps and raises numerous interpretative challenges. Against this backdrop, the present study seeks to examine the amendments introduced by Law 2/2025 of 29th of April, concerning the termination regime for permanent disability and identifying modifications that should have been addressed regarding dismissal on grounds of supervening disability within the same amendments, and finally, to assess the feasibility of reinstating objective dismissal for workplace absenteeism in the context of elevated absenteeism rates.