Is a policy that penalises variable pay and incentives for sick leave legal? Key points of National Court Ruling 4428/2025

  1. The exceptional bonus analysed in the ruling.

The National Court has ruled on a collective dispute in which a company had established a policy for the accrual of an exceptional bonus which, in order to be paid, required a percentage of time worked in the period from January to November, with the statement indicating that periods of temporary incapacity are not considered as time of effective service in 2023.

  1. The National Court explains that cases must be analysed on a case-by-case basis.

The ruling makes it clear, from the outset of its legal reasoning, that there have already been several rulings by that Chamber on possible pay discrimination by excluding the period of temporary incapacity from the calculation of services rendered; providing solutions that are subject to the configuration of the disputed supplement, as it is not possible to establish a general rule valid for all cases, and therefore each specific case and the factual circumstances that make it unique must be considered.

At Belzuz Abogados, S.L.P., we would like to draw particular attention to this point.

  1. What factors are taken into account when deciding whether it is possible to exclude the variable incentive?

In the case analysed, the decisive factor is that the supplement is not linked to the length or number of working hours, something that, for the court, is revealed by the fact that the bonus established is a fixed amount for the entire group, regardless of whether or not the element that the bonus is intended to reward has been activated, which in this case is the fact of having “suffered a greater or lesser number of activations or deactivations of working hours“.

  1. Is it discriminatory to exclude any suspension or absence from work from bonus or incentive policies?

No, as we have been able to verify from the team of labour lawyers at Belzuz Abogados, S.L.P., the ruling analyses a series of situations contained in the claim that also penalised the accrual of the bonus, and concludes in several of them that their inclusion is not discriminatory. The cases of workers on leave of absence, unpaid leave and childcare leave are analysed, as well as the requirement to be actively employed by the company on a specific date.

The court carefully analyses all these situations and gives reasons in each case where discrimination exists.

  1. What elements must be present for bonuses or incentives not to constitute pay discrimination by excluding the period of temporary incapacity from the calculation of services rendered?

At Belzuz Abogados, S.L.P., and our team of experts in labour law, we can conclude that there is no fixed rule that provides a categorical answer to this question that is generally applicable to all bonus policies.

The bonus and incentive policy may be considered null and void by the courts when the exclusion of temporary incapacity – which, we should remember, is a valid cause for suspension of the contract – is contrary to the definitions of discrimination given by, among others, Law 15/2022.

The courts will also assess the purpose, nature and characteristics of the bonuses and incentives, as well as the final effect of the measure contained in the policy.

As can be seen, this requires an individualised analysis, which is not straightforward.

For all these reasons, at Belzuz Abogados, S.L.P., as expert labour lawyers with extensive experience in comprehensive legal advice, we recommend that companies seek serious legal support when defining these policies, in order to avoid court rulings that could declare them null and void. Labour Law Department of Belzuz Abogados, S.L.P..

 

  1. Can the company take away my incentive if I am on sick leave?

According to Belzuz Abogados, S.L.P., experts in labour law, the answer depends on a number of factors, including the nature and purpose of the incentive and the justification for the policy of excluding periods of temporary incapacity from the calculation. This is taken from National Court ruling no. 4428/2025 of 20 October.

  1. What is the difference between penalising absenteeism and sick leave?

Law 15/2022 expressly prohibits policies that specifically penalise illness when this leads to discrimination. With regard to other causes of absenteeism, each case must be analysed individually to determine whether its exclusion leads to discrimination, in which case the company’s internal regulations in this regard could also be null and void.

  1. Is it legal to exclude periods of leave or time off from variable pay?

The ruling of 20 October 2025 by the National Court explains that it could be lawful for companies not to take into account situations such as voluntary leave, unpaid leave or childcare leave for the accrual of certain incentives. It will depend on the nature of the incentive, the purpose it pursues and whether this exclusion leads to discrimination.

  1. What should I take into account when designing an incentive or variable pay policy in which absenteeism is reduced or not counted towards accrual?

The policy must be designed in such a way as to ensure that, in accordance with prevailing case law, there is no discrimination against people on sick leave or with periods of absenteeism. To this end, absenteeism from work must be clearly defined, the groups affected by this measure must be taken into account in order to determine whether there is indirect discrimination, and the purpose of the incentive and its relationship with the provisions of Law 15/2022 must be borne in mind.

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