The Supreme Court has clarified the status of the covid-19 layoff doctrine, noting a shift away from the broad interpretation that earlier restricted employer decisions during the first part of the pandemic. Courts across different regions showed a spectrum of opinions: some Basque judges accepted the view that dismissals tied to covid impacts could be invalid, while Madrid and Catalonia courts leaned toward inadmissibility or different thresholds. The High Court’s decision also included a critique of the language used in the normative text, highlighting how ambiguity in the rule could fuel divergent outcomes among jurisdictions.
During the early days of the pandemic, Yolanda Díaz, who was the sole Labor Minister and later became vice-president, aimed to curb a rush of layoffs and redirect them toward the post-crisis period. Her approach was shaped by the belief that massive closures in activities like bars were driven by government restrictions or sharply reduced demand, rather than by the normal balance between costs and revenues. This context helped birth a norm that applied while the state of alarm was in effect, a norm that the Supreme Court later overturned. It was argued that covid herself could not be cited as the sole reason for dismissal.
In its latest ruling, the Supreme Court overturned the most expansive readings of the doctrine. The Court rejected the idea that companies must reinstate workers automatically after a covid-related layoff. It also moved away from the extreme position that permitted a choice between reinstatement and a fixed compensation. The Court clarified that a layoff should not be deemed null solely for the presence of a covid-related justification; rather, nullity would require explicit data showing a violation of fundamental rights, procedural failures in a collective dismissal, or the emergence of a special protective circumstance affecting a particular employee. This narrows the scope of circumstances under which a dismissal can be labeled void and places greater emphasis on concrete legal grounds and data to support such a determination.
Observers note that the ruling signals a more uniform interpretation across the national judiciary, aiming to reduce fragmented outcomes between regions. It also places a higher burden on employers to demonstrate that the dismissal reason is justified by legitimate business considerations rather than solely by the pandemic context. The decision is framed as a move toward balancing protective principles with the realities faced by businesses during an extraordinary public health crisis, ensuring that responses to the pandemic do not automatically trigger a blanket invalidation of layoffs. The court emphasized that the law does not impose an outright ban on dismissals tied to covid, nor does it treat ERTE (temporary layoff) as an absolute necessity in every case, highlighting the need for careful, case-specific evaluation.
Legal commentators highlight that the ruling also addresses the broader policy debate surrounding emergency measures and their long-term implications for labor relations. It cautions against turning public health emergency rules into a perpetual constraint on managerial prerogatives, while still preserving essential protections for workers. The court’s reasoning reflects a nuanced approach: covid-related circumstances can contribute to the context of a dismissal, but do not automatically render the act void unless specific rights or procedures have been violated or unless a uniquely protective situation applies to an individual employee. This framework aims to harmonize worker protection with employer autonomy, particularly in sectors hit hardest by the crisis where rapid adjustments were common and sometimes necessary for business continuity.
Finally, the legal dialogue surrounding these doctrines remains active. Critics of the initial normative stance argued that the pandemic should not be used as a blanket shield against the normal checks and balances governing layoffs. The most recent pronouncement by the Supreme Court re-centers the discussion on concrete empirical and legal grounds, rather than on broad political or public health narratives. The judgment is seen as a clarifying step that reduces the likelihood of divergent rulings based solely on regional interpretations and reinforces the principle that every dismissal must be assessed on its own merits with attention to due process and proportional protection for workers, consistent with existing constitutional guarantees.