How Should a Company Manage the Loss of an Employee’s Residence and Work Permit?

What companies should do when a foreign employee is no longer authorised to work in Spain

In an increasingly international labour market, Spanish companies frequently employ foreign professionals to fill specialised positions, develop new business lines or support international expansion.

This reality also raises an important question for Human Resources departments: what happens when a foreign employee’s residence and work permit reaches its expiry date or ceases to be valid?

The answer cannot be reduced to checking the date shown on the TIE. The expiry of the card does not necessarily mean that the employee has lost their authorisation to work. Before taking any decision, the company should verify the employee’s actual immigration status and, in particular, whether a renewal application has been submitted that extends the validity of the authorisation.

Where there has been an effective loss of work permit, the matter also has an employment law dimension. The company cannot simply deregister the employee with Social Security and consider the employment relationship terminated.

Article 36 of Organic Law 4/2000 of 11 January on the Rights and Freedoms of Foreigners in Spain establishes the requirement for the corresponding administrative authorisation to work, while also providing that the lack of such authorisation does not invalidate the employment contract with regard to the foreign employee’s rights.

In addition, Supreme Court Judgment 642/2021 of 23 June confirmed that the loss of the authorisation to work does not automatically constitute a terminating condition of the employment contract.

For companies, the key is to properly coordinate the employee’s immigration status with the employment relationship and to act before an administrative issue becomes an employment liability.

The Expiry of the TIE Does Not Always Mean the Loss of the Work Permit

One of the first checks a company should carry out is whether the authorisation allowing the employee to work in Spain has actually expired.

For temporary residence and employment authorisations, Article 80 of Royal Decree 1155/2024 of 19 November, approving the Regulations implementing Organic Law 4/2000 establishes that renewal applications must be submitted during the two months preceding the expiry date of the authorisation.

Submitting the application within this period extends the validity of the previous authorisation until the application has been decided.

The same provision establishes that this extension also applies where the renewal application is submitted within three months following the expiry of the previous authorisation, without prejudice to the possible administrative consequences arising from the late application.

Therefore, an expired TIE does not automatically mean that the employee has lost their authorisation to work.

Before taking any employment decision, the company should check:

• the expiry date of the authorisation;
• whether a renewal application has been submitted;
• the date on which it was submitted;
• the type of authorisation being renewed;
• the current status of the application;
• and whether an administrative decision has already been issued.

This verification is particularly important because a physically expired card may coexist with an authorisation whose validity has been extended as a result of a pending renewal application.

A Timely Renewal Application Keeps the Authorisation in Force

The current immigration framework is particularly relevant for companies employing foreign workers.

Article 80 of the Spanish Immigration Regulations expressly provides that submitting a renewal application within the applicable period extends the validity of the previous authorisation until a decision is issued.

This prevents the mere arrival of the expiry date from automatically creating a situation in which the employee is no longer authorised to work.

Furthermore, Article 81 of Royal Decree 1155/2024 establishes that, once renewal has been granted, the new authorisation takes effect from the day immediately following the expiry of the previous authorisation.

The practical consequence for Human Resources is clear: the expiry date shown on the TIE should trigger a review of the employee’s immigration status, not an automatic termination of the employment contract.

The situation is different where the renewal application has been refused or where, for any other reason, the employee has effectively lost the authorisation that allowed them to work.

What Happens if the Employee Actually Loses the Authorisation to Work?

The situation changes when the employee no longer holds an authorisation allowing them to work in Spain and there is no pending renewal maintaining its effects.

In this situation, the company should proceed with particular caution.

Article 36 of Organic Law 4/2000 establishes that foreign nationals over the age of 16 require the relevant prior administrative authorisation to reside and work in Spain.

At the same time, paragraph 5 of the same provision establishes that the absence of a residence and work authorisation, without prejudice to any liability that may arise for the employer, does not invalidate the employment contract with regard to the foreign employee’s rights.

This means that the loss of the administrative authorisation does not allow the employment relationship to be treated as though it had never existed.

The company must distinguish between two separate issues:

Immigration status: the employee must be legally authorised to provide services.

The employment relationship: if the company needs to terminate the contract, it must use the appropriate employment law procedure.

Confusing these two issues can create significant risks for the company.

Supreme Court Case Law: Loss of the Permit Does Not Automatically Terminate the Contract

The Spanish Supreme Court addressed this issue directly in Judgment 642/2021 of 23 June.

The case concerned a foreign employee whose authorisation to work had expired and had not been renewed. The company considered that the loss of the permit constituted a terminating condition of the employment contract and proceeded to terminate the relationship.

The Supreme Court rejected this approach.

The Court reiterated its previous case law and held that the loss of the authorisation to work in Spain cannot be treated as a valid terminating condition incorporated into the employment contract.

However, the Supreme Court also recognised that the loss of the authorisation may justify termination of the employment relationship because it creates a legal obstacle to continuing the provision of services.

The appropriate route is an objective ground for termination, specifically supervening incapacity or inability under Article 52(a) of the Spanish Workers’ Statute.

In the case examined, the company had not followed this procedure and the termination was therefore classified as an unfair dismissal.

The principle is particularly relevant for companies: loss of the work permit may justify termination through the appropriate employment law procedure, but it does not automatically terminate the employment contract or allow the employer to bypass that procedure.

Loss of the Authorisation May Fall Within Supervening Inability

Article 52(a) of the Spanish Workers’ Statute establishes the employee’s known or subsequent inability to perform the job as one of the grounds for objective termination.

Spanish Supreme Court case law has recognised that the loss of a legal authorisation required to perform the job may fall within this concept where it prevents the employee from legally continuing to provide the relevant services.

The Supreme Court’s reasoning in Judgment 642/2021 specifically recognises that the loss of an administrative authorisation necessary to perform an activity may constitute a situation of supervening inability.

There is, however, an important distinction between this situation and the mere expiry of a TIE.

The company must be able to establish that the authorisation has actually been lost and that the employee is no longer legally authorised to perform the activity for which they were hired.

What Requirements Must the Company Meet to Terminate the Contract?

Where the circumstances allow the company to rely on Article 52(a) of the Workers’ Statute, the termination must comply with the formal requirements applicable to objective dismissals.

Article 53 of the Spanish Workers’ Statute establishes, among other requirements:

• written notice to the employee setting out the grounds for termination;
• simultaneous payment of the statutory compensation;
• 15 days’ notice;
• and compliance with the other statutory requirements applicable to this type of termination.

The statutory compensation generally applicable to objective dismissals is 20 days’ salary per year of service, capped at 12 monthly payments.

The effective loss of the authorisation may constitute the grounds supporting termination, but the company must be able to demonstrate both the employee’s immigration status and the legal impossibility of continuing the employment relationship.

An incorrect approach may turn a decision based on an objective ground into a dismissal that is subsequently declared unfair.

Deregistering the Employee With Social Security Does Not Replace Dismissal

One of the most important mistakes companies should avoid is treating deregistration from Social Security as if it were, by itself, a means of terminating the employment relationship.

Administrative deregistration does not replace the employer’s termination decision or the formal requirements established by employment law.

Indeed, in Supreme Court Judgment 642/2021 of 23 June, the company had considered that the loss of the permit allowed it to end the employment relationship without following the relevant procedure.

The Supreme Court held that this approach was not legally valid.

Companies must therefore clearly distinguish between administrative Social Security procedures and the legal decision to terminate the employment contract.

In other words, deregistering an employee from Social Security does not replace a properly conducted dismissal.

Lack of a Work Permit Does Not Eliminate the Employee’s Employment Rights

Spanish immigration legislation contains an important protection for foreign employees.

Article 36(5) of Organic Law 4/2000 establishes that the absence of a residence and work authorisation does not invalidate the employment contract with regard to the foreign employee’s rights, without prejudice to any liability that may arise for the employer.

Therefore, the loss of the authorisation does not automatically eliminate the obligations arising from the employment relationship.

The company must manage the situation while respecting both immigration law and the employment rights applicable to the employee.

This may be particularly relevant with regard to outstanding salary, termination compensation, Social Security contributions and any subsequent challenge to the termination.

What Risks Does a Company Face if It Continues Employing Someone Without Authorisation?

If an employee genuinely lacks authorisation to work, the company should not continue the employment relationship as though the immigration situation had not changed.

The Spanish Immigration Law establishes potential liabilities for employers in connection with employing foreign nationals without the required authorisation.

For this reason, when Human Resources identifies an actual loss of authorisation, the company should immediately assess the situation and determine the appropriate response.

The solution is neither to ignore the situation nor to automatically terminate the employment relationship through a simple Social Security deregistration.

The response should coordinate immigration, Human Resources, Social Security and employment law.

Human Resources Should Anticipate Permit Expiry

The best way to manage these situations is to address them before they become a problem.

Companies employing foreign workers should maintain a system for monitoring work and residence authorisations, allowing them to identify expiry dates sufficiently in advance.

This can be incorporated into ordinary Human Resources and immigration compliance procedures.

The company should know which employees require an administrative authorisation to work, when each authorisation expires and whether the relevant renewal application has been submitted.

It is also advisable to document communications with the employee and retain relevant information regarding their immigration status.

Prevention allows companies to avoid turning an issue that could have been managed in advance into an urgent employment decision.

International Companies: Coordinating Immigration and Employment

This issue is particularly relevant for international companies managing teams across different jurisdictions.

Global Human Resources policies may establish procedures for monitoring work permits, but their implementation in Spain must be adapted to Spanish law.

Immigration status, employment conditions, Social Security and personnel administration are closely connected.

For this reason, managing foreign employees should form part of a broader strategy for Immigration and Global Mobility in Spain, allowing companies to coordinate authorisations, renewals, employment, Social Security and ongoing compliance.

Early intervention is particularly important where renewals, changes of employer, changes in duties or international mobility are involved.

A Matter of Immigration and Employment Compliance

Work authorisation management should not be limited to the point of recruitment.

For companies, periodically verifying that foreign employees continue to have the right to work forms part of an effective compliance strategy.

This is particularly important where there are renewals, changes of employer, changes in duties, international mobility or changes in the professional’s immigration status.

A proper document management system allows companies to identify potential issues in advance and coordinate the appropriate response with their advisers.

Prevention is particularly important because an administrative error can ultimately generate employment, financial and reputational consequences.

How Should a Company Act When an Employee’s Work Authorisation Loses Validity?

When Human Resources identifies that a foreign employee’s authorisation is approaching expiry or has already expired, the company should follow an orderly process.

First, verify the employee’s actual immigration status. The date shown on the TIE is not sufficient.

Second, confirm whether a renewal application has been submitted and when. For temporary residence and employment authorisations, a renewal submitted within the periods established by Article 80 of the Spanish Immigration Regulations may extend the validity of the authorisation until a decision is issued.

Third, check the outcome of the procedure. If there is a favourable decision, the company should verify the resulting status. If the renewal has been refused, the company should immediately assess whether the employee has effectively lost the authorisation to work.

Fourth, if the authorisation has genuinely been lost, assess the employment relationship. The company should determine the appropriate employment law route, taking into account the Supreme Court’s case law regarding supervening inability.

Fifth, document the entire process. Internal communications, immigration documentation and decisions taken should be properly recorded.

This approach helps avoid two opposite errors: continuing to employ someone without authorisation or terminating an employment relationship that could legally continue.

Proper Management Begins Before the Permit Expires

The loss of validity of a residence and work authorisation requires a prompt response, but not an automatic one.

The first step should always be determining whether there has actually been a loss of work permit. Under the current renewal framework, the authorisation may remain valid in certain circumstances even after the expiry date shown on the TIE.

If, on the other hand, the authorisation has genuinely been lost, the company must address the situation from two perspectives: immigration compliance and employment law.

The Supreme Court has made clear that the loss of a work permit does not allow an employer simply to deregister an employee and consider the employment contract terminated. The situation may justify termination on the grounds of supervening inability, but the appropriate employment procedure must be followed.

For companies, the main conclusion is clear: an employee’s immigration status must form part of the ordinary management of the employment relationship, rather than being treated as a separate administrative matter.

At Suárez de Vivero, we advise national and international companies on the management of foreign employees, renewals and amendments to immigration authorisations, immigration compliance, employment contracts, global mobility and termination of employment relationships connected with immigration status.

You can learn more about our Immigration and Global Mobility in Spain services, where we coordinate immigration strategy with employment conditions, workforce planning and the company’s business needs.

Frequently Asked Questions About the Loss of a Residence and Work Permit