Spain\u2019s Organic Law 1\/2025<\/strong> is now fully in force and has redefined how employment relations<\/strong>, judicial procedures<\/strong>, and remote work<\/strong> are managed.<\/p>\n Yet many SMEs<\/strong> still haven\u2019t adjusted their contracts<\/strong>, internal protocols<\/strong>, or work\u2013life balance policies<\/strong> to comply with its new requirements.<\/p><\/div><\/div> Organic Law 1\/2025<\/strong>, enacted on 2 January, is part of Spain\u2019s legislative package for judicial efficiency and modernisation of the justice system<\/strong>.<\/p>\n Following its publication in the BOE and a correction of errors on 11 January, the law came fully into force in October 2025<\/strong>, after the nine-month transition period.<\/p>\n It has undergone minor amendments<\/strong> \u2014 the latest on 4 June 2025<\/strong> via Royal Decree 388\/2025<\/strong> \u2014 and has started to be implemented through Royal Decree 530\/2025<\/strong> on the creation of Local Justice Offices<\/strong>.<\/p>\n While its core provisions remain stable, the Ministry of Justice continues to roll out administrative and procedural aspects, so companies should expect further operational updates over the coming months.<\/p>\n<\/div> The reform promotes mandatory mediation<\/strong> before taking cases to court and electronic processing<\/strong> for all labour and social-security proceedings.<\/p>\n Labour courts<\/strong> now have extended jurisdiction over harassment<\/strong>, equality<\/strong>, and fundamental-rights<\/strong> disputes \u2014 prompting companies to implement preventive protocols<\/strong> and employee training<\/strong>.<\/p>\n<\/div> Amendments to the Law on Social-Order Infractions and Sanctions<\/strong> increase penalties for breaches of equality, work\u2013life balance, or teleworking rights.<\/p>\n Fines for serious violations can reach \u20ac187,000<\/strong>, making compliance and internal audits essential for SMEs<\/strong>.<\/p>\n<\/div> Despite the end of the transition period, many small and medium-sized companies<\/strong> still haven\u2019t aligned their contracts, internal regulations, or HR policies<\/strong> with the new law.<\/p>\n Failure to do so can lead to fines<\/strong>, litigation<\/strong>, or a loss of competitiveness<\/strong> compared to businesses that already comply.<\/p>\n<\/div>A structural reform now fully implemented<\/strong><\/h2><\/div>
What companies must review<\/strong><\/h2><\/div>
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\nThe law reinforces the presumption of permanent employment and tightens controls on temporary contracts. Employers must provide clear written justification for fixed-term hiring, especially for project-based or short-term roles.<\/li>\n
\nStricter requirements now apply to objective dismissals, and judges have greater discretion to assess underlying circumstances. Dismissal letters and supporting documentation must be carefully prepared to avoid disputes.<\/li>\n
\nPaid leave for caring responsibilities has been extended, and employees can now request flexible schedules without reducing their working hours. Internal policies should be updated to reflect these rights.<\/li>\n
\nEmployers are required to formalise remote-work agreements covering working conditions, tools provided, and expense compensation. The law also strengthens the right to digital disconnection outside working hours.<\/li>\n<\/ol>\n<\/div>Procedural changes and new dispute-resolution mechanisms<\/strong><\/h2><\/div>
Sanctions and compliance pressure<\/strong><\/h2><\/div>
Adaptation: the pending challenge for many SMEs<\/strong><\/h2><\/div>