When a business decision must become demonstrable reality before the courts

In employment disputes, the difference between a valid business decision and one that is successfully challenged before the courts often comes down to one essential element: the ability to prove the facts that justify it.

A company may have adopted a measure in response to its organisational needs, acted in good faith and had sufficient reasons from an internal perspective. However, when the dispute reaches the courts, the assessment does not focus solely on the decision that was made, but also on whether there is sufficient evidence to demonstrate that the decision was based on a genuine, objective and legally valid reason.

This is particularly relevant in proceedings involving dismissals, substantial changes to employment conditions, disciplinary sanctions, collective disputes or breaches of fundamental rights. In all these situations, evidence ceases to be a secondary element and becomes an essential part of the company’s employment strategy.

Evidence as a Central Element of the Company’s Defence

Employment proceedings have a particularly important feature: companies must not only explain why they adopted a particular decision, but also demonstrate that the facts behind it actually occurred and are sufficiently serious to justify its legal consequences. The existence of a business reason cannot be based solely on internal perceptions, general assessments or undocumented statements.

The Employment Courts analyse the consistency between the company’s decision, the facts established by the evidence and the applicable legislation. For this reason, proper management of employment relationships should incorporate an evidentiary perspective from the outset. Documentation generated during the employment relationship may become decisive months or even years later, when a business decision is subject to judicial review.

The Burden of Proof in Employment Proceedings

One of the most relevant aspects of employment litigation is the allocation of the burden of proof. In accordance with Article 217 of Law 1/2000 of 7 January on Civil Procedure, the defendant bears the burden of proving facts that prevent, extinguish or otherwise undermine the legal effectiveness of the claimant’s arguments, while the court must always assess the availability and ease of producing evidence for each party.

In employment proceedings, this general rule becomes particularly significant for companies in dismissal cases or where fundamental rights and discrimination are involved. Under Article 96.1 of Law 36/2011 of 10 October regulating the employment courts and Article 30 of Law 15/2022 of 12 July on equal treatment and non-discrimination, where the claimant’s allegations give rise to well-founded indications of discrimination or a breach of a fundamental right, the defendant must provide an objective and reasonable justification, sufficiently supported by evidence, for the measures adopted and their proportionality.

This evidentiary dynamic, consistently addressed by case law — including in the appeal proceedings before the High Court of Justice (Roj: STSJ CV 4034:2025 · ECLI: ES:TSJCV:2025:4034) — requires the company not merely to deny the alleged breach. It must provide a solid and sufficiently evidenced explanation of the decision adopted, moving the reason for the dismissal away from the employee’s personal circumstances and towards the objective grounds stated in the dismissal letter.

The Importance of Documenting Business Decisions

One of the main mistakes in employment litigation is assuming that evidence starts to matter when a dispute arises. In reality, a company’s legal defence begins much earlier.

Internal communications, performance assessments, prior warnings, organisational reports and activity records may subsequently acquire decisive evidentiary value before a court.

This is particularly evident in disciplinary dismissals, where companies may also be required to initiate prior adversarial proceedings if this is required by the applicable collective bargaining agreement or if the employee is a legal representative of the workforce.

A company may consider that serious misconduct has occurred, but if it does not have sufficient documentation to reconstruct the facts, the decision may be declared unfair or null and void in judicial proceedings. The difference between a defensible business decision and a vulnerable one often lies in the ability to demonstrate, through documentary evidence, how that conclusion was reached.

The Dismissal Letter and Its Evidentiary Value

In dismissal proceedings, the dismissal letter is the most important evidentiary and procedural element. It is not merely a formal communication to the employee; it is the document that definitively establishes the facts on which the court may subsequently rule.

Under Article 105.2 of the Labour Jurisdiction Act, the defendant may not rely at trial on grounds for opposing the claim other than those contained in the written dismissal communication. An excessively generic letter can therefore severely restrict the company’s ability to defend itself.

For example, referring simply to a loss of confidence, reduced performance or a breach of employment obligations requires a specific explanation of what happened, when it happened and why those facts justify termination of the employment relationship.

The courts have repeatedly held that a company cannot construct a different or additional reason during judicial proceedings to supplement the reason initially communicated. The evidentiary strategy must therefore be aligned with the wording of the dismissal letter from the outset.

Digital Evidence in Employment Litigation

Digital transformation has significantly expanded the evidence available to companies. Corporate emails, professional conversations on messaging platforms, internal system records, management tools and digital documents are now part of most employment proceedings.

However, the use of this evidence requires strict compliance with constitutional limits. Companies must ensure that information is obtained in accordance with applicable legislation, particularly regarding privacy and data protection.

The existence of a technological monitoring tool does not mean that any information obtained through it can automatically be used in judicial proceedings.

The principles of proportionality and the balance between the protection of employees’ personal data and the company’s organisational or monitoring needs must be respected. The validity of digital evidence will depend on whether it was obtained in compliance with the employee’s right to privacy, which in many cases requires prior policies governing the use of digital tools to have been properly communicated to the workforce.

Evidence in Disciplinary Dismissals: Proving the Seriousness of the Misconduct

Disciplinary dismissals are one of the areas in which evidence is most important. The dismissal letter must set out specific factual elements demonstrating the misconduct or breach by the employee: the date and location of the breach, a detailed description of the conduct and the employment rules or internal policies that were breached.

The company must demonstrate not only that the conduct occurred, but also that it is sufficiently serious and culpable to justify the most severe sanction within the employment relationship, in accordance with Article 54 of the Employees’ Statute.

The courts consider factors such as the nature of the breach, the position held by the employee, the harm caused and whether there has been a breach of contractual good faith.

Therefore, it is not enough to identify incorrect conduct. The company must explain and prove why that conduct is incompatible with the continuation of the employment relationship under the gradualist doctrine, as analysed in the appeal proceedings before the High Court of Justice.

Evidence in Objective Dismissals and Restructuring Processes

For a company to establish that an objective dismissal is justified under Spanish law, it must meet a rigorous evidentiary standard. The burden of proof falls exclusively on the employer, as established by Article 217.3 of the Civil Procedure Act and judicial doctrine.

It is not sufficient to allege the existence of a reason in the dismissal letter. The company must demonstrate its reality, seriousness and the proportionality of the termination measure.

Evidence of Economic, Technical, Organisational or Production-Related Grounds

When termination is based on Article 52(c) of the Employees’ Statute, by reference to the grounds under Article 51.1, the company must provide a specific body of evidence depending on the ground relied upon.

A) Economic Grounds

This arises where the company’s results reveal a negative economic situation, such as current or expected losses or a persistent decline in ordinary revenue or sales over three consecutive quarters.

Documentary Accounting and Tax Evidence

• Complete annual accounts, including the balance sheet, profit and loss account, notes to the accounts and management report, for the previous two financial years, duly audited where the company is legally required to do so.
• Interim accounts or trial balances covering the current financial year up to the date of dismissal. Case law requires the negative situation to be fully up to date at the time of termination.
• Periodic tax returns, including VAT returns and advance payments of Corporate Income Tax or Personal Income Tax, demonstrating the persistent decline in sales or revenue compared with the same quarters of the previous year.

Expert Economic Evidence

• A report prepared by an economist, auditor or chartered accountant analysing the company’s accounts, confirming the existence of losses or declining revenue and technically explaining the reasonableness of eliminating the position in order to ensure the organisation’s viability.

B) Technical, Organisational or Production-Related Grounds

Technical Grounds

Changes in the means or instruments of production.

• Evidence of the acquisition of new machinery, software or automated systems that replace the tasks performed by the affected employee, such as purchase invoices or technology implementation agreements.

Organisational Grounds

Changes in the company’s systems and methods of organising its workforce or production.

• Company organisational charts, both before and after the restructuring, demonstrating duplication of functions or the unnecessary nature of the position.
• Evidence of the outsourcing of services or the merger of departments justifying the organisational elimination of the position.

Production-Related Grounds

Changes in demand for the company’s products or services.

• Communications from clients terminating or reducing commercial contracts, specifications from lost tenders or production statistics demonstrating a significant and permanent decline in the volume of orders or services to be provided.

Technical Report or Explanatory Memorandum

• A detailed document prepared by company management or external consultants explaining the mismatch between production needs and available human resources and demonstrating that the workforce is oversized.

Dismissal for Personal Reasons: Incapacity or Lack of Adaptation

A) Subsequent Incapacity (Article 52(a) of the Employees’ Statute)

When a company dismisses an employee on the grounds of subsequent incapacity, it must demonstrate that the incapacity is genuine, permanent, general — affecting the essential duties of the position as a whole — and arose after the employee effectively began working in the position.

The evidence required in such a case includes:

Reports from the Occupational Risk Prevention Service

• A medical health surveillance assessment declaring the employee “unfit” for their position.
• Critical case-law point: merely submitting an “unfit” report issued by an external prevention service does not automatically bind the court and does not, by itself, constitute conclusive evidence. The company should call the medical professional who signed the report to testify at trial so that they can confirm and explain in detail the employee’s specific functional limitations and why these are incompatible with the essential duties of the position.

Evidence of the Impossibility of Adaptation or Redeployment

• The company bears the burden of proving that it attempted to make reasonable adjustments to the position or that redeployment to a compatible position was not possible or would have imposed an excessive burden, in accordance with Directive 2000/78/EC and Supreme Court doctrine.
• The company should provide the risk assessment for the position, technical reports regarding the impossibility of adapting the duties and evidence that there were no compatible vacancies within the workforce.

B) Failure to Adapt to Technical Changes (Article 52(b) of the Employees’ Statute)

When a company dismisses an employee due to their failure to adapt to technical changes implemented by the company, it must prove the following:

Evidence of the Technical Change

Documentation demonstrating the introduction of a reasonable technological or technical change affecting the employee’s position.

Evidence That Training Was Offered

Documentary evidence showing that the company offered and provided the employee with training designed to enable them to adapt to the change, while continuing to pay their salary and treating the training time as working time.

Evidence That the Statutory Period Has Elapsed

Evidence that at least two months have elapsed since the introduction of the change or since the completion of the training before the dismissal was carried out.

The Test of Proportionality and Reasonableness

Finally, the company must provide evidence allowing the court to carry out an assessment of reasonableness and proportionality.

It is not sufficient to prove that an economic or production-related reason exists. The company must demonstrate that eliminating the claimant’s position is a plausible and appropriate measure in response to that reason.

For example, if a company relies on economic grounds but simultaneously hires new employees in the same category or performing the same functions around the time of the dismissal, the proportionality of the measure is undermined, which will inevitably lead to a finding that the dismissal was unfair.

Common Mistakes Companies Make Regarding Evidence

• Relying solely on verbal explanations: A conversation between managers or a subjective internal assessment is insufficient if there are no objective elements supporting it.
• Documenting the decision too late: Collecting evidence once the dispute has already reached court makes it more difficult to obtain digital evidence or fresh witness testimony.
• Documentary inconsistency: Issuing dismissal letters based on poor performance when previous performance assessments of the employee contain excellent evaluations and no prior warnings.
• Breaching fundamental rights when obtaining evidence: Using security camera recordings or accessing corporate emails without having complied with prior information and proportionality requirements, which may invalidate the evidence at trial.

The Role of Human Resources in Preparing Evidence

Human Resources departments play an essential role in building a strong position for the company. Proper document management, correct communication of decisions and coordination with the managers responsible for each area can significantly reduce litigation risks.

HR should not view documentation as an administrative burden, but as a tool for protecting the company. An organisation that properly documents its decisions is better prepared to defend them when they are reviewed by a court.

Evidentiary Strategy as Part of Business Employment Management

Employment litigation does not begin when a company receives a claim. It begins when the company makes a decision that may have legal consequences.

A sound evidentiary strategy requires anticipation, consistency and sufficient documentation.

The courts do not assess only whether a company had a reason to act, but whether it can demonstrate that the reason existed and justified the measure adopted.

At Suárez de Vivero, we advise national and international companies on employment litigation, judicial defence, disciplinary proceedings, collective disputes and preventive strategies in anticipation of potential employment disputes.

Frequently Asked Questions About Evidence in Employment Litigation