As the final quarter of the year approaches, companies operating in Spain must begin evaluating how they manage employee vacation accruals and paid leave entitlements. Two legal areas in particular have drawn attention in recent months: the handling of unused vacation days at year-end and the application of the five-day paid leave for the hospitalization or serious illness of a family member.
Recent rulings from Spanish and European courts have reaffirmed the employer’s legal responsibility to actively ensure compliance with labor obligations in both areas. Below is a summary of key considerations and the latest jurisprudence.
Vacation Accrual and Year-End Risk Exposure
Employees in Spain are entitled to thirty calendar days of paid vacation annually, which may be extended under sectoral or company-level collective bargaining agreements. These vacation days are earned proportionally and, unless otherwise agreed, must be taken during the calendar year in which they are accrued.
However, disputes often arise when:
- An employee reaches the end of the year with unused vacation and wishes to carry it over
- An employment contract ends early in the following year and the employee claims payment for unused vacation from the previous year
The Court of Justice of the European Union (CJEU), in rulings such as C-684/2016 and C-120/2021, has consistently held that it is not sufficient for employers to simply allow time off in principle. Instead, employers must take proactive and transparent measures to ensure that employees actually take their vacation within the calendar year.
This principle has been adopted by Spanish courts, most notably in the judgment of the High Court of Justice of Navarre dated 7 June 2024 (Rec. 77/2024). The ruling confirms that:
- Employers are required to actively inform and enable employees to take their vacation within the year
- Sending written reminders or issuing internal notifications is considered an acceptable compliance measure
- If the employer fails to meet this duty, employees may carry their unused vacation into the next year or, in the case of dismissal, claim financial compensation for those days
For companies, the implication is clear: passivity can lead to liability. A failure to act is equivalent to a breach of obligation under Spanish labor law.
Paid Leave for Hospitalization or Serious Illness: Clarified Legal Scope
The introduction of five days’ paid leave for the hospitalization or serious illness of a relative has given rise to a number of questions in recent months. The wording of the statutory provision lacked clarity on two key points:
- Can this leave be taken more than once in a calendar year?
- Does the leave end automatically when the patient is discharged from hospital?
Two recent rulings have now provided definitive clarification:
- The National Court, in a judgment dated 7 March 2025, ruled that this leave is not limited to a single occurrence per year. It may be used multiple times, provided each instance relates to a new qualifying event.
- The Supreme Court, in a judgment dated 6 May 2025, held that the leave is not tied exclusively to hospitalization. The employee remains entitled to leave if the relative continues to require care at home or through outpatient treatment. What terminates the right to leave is not hospital discharge, but medical discharge, which marks the end of the need for care.
These rulings require employers to update internal policies and ensure that HR practices align with the clarified interpretation of the law.
Recommendations for Employers
To minimize legal exposure and ensure compliance with current labor standards, companies should:
- Review how vacation time is tracked and communicated to employees
- Send written reminders to employees during the last quarter of the year, particularly in October or November
- Update internal HR policies to reflect the full scope of the five-day paid leave
- Ensure line managers and HR personnel are informed of the rulings and can manage requests appropriately
- Maintain proper documentation of communications and leave approvals
Both vacation accrual and family-related leave are routine matters in the employer-employee relationship. Yet, when not managed in accordance with evolving legal standards, they can lead to significant claims, disputes, or compliance risks.
At Suárez de Vivero, we advise clients on policy development, risk mitigation, and legal strategy to help ensure full compliance with Spanish labor law. For support in reviewing your internal policies or managing high-risk leave scenarios, our team is available to assist.
For legal assistance or consultations, please contact us at www.suarezdevivero.com