Spain: The Impact of AI as a Justifiable Cause For Dismissal
The ruling of the High Court of Justice of Castile and León (Valladolid) of 15 September 2025 (Roj: STSJ CL 3529/2025 – ECLI:ES:TSJCL:2025:3529) confirms the validity of an objective dismissal on economic and productive grounds in a company in the translation sector affected by the introduction of machine translation and artificial intelligence.
The employee, who had been with the company since 2007 and had a gross monthly salary of €1,851.78, was dismissed in May 2024 under Article 52.c) ET, on the grounds of:
- Continued decline in sales volume
- Losses in 2023
- Significant losses in the first quarter of 2024
- Structural transformation of the sector due to machine translation and AI
The Valladolid Labor Court No. 3 declared the dismissal to be fair, and the employee appealed.
The appellant attempted to modify the proven fact relating to business losses, arguing that the official accounts showed profits and not losses, but the Court rejected the review on the grounds that “the decline in turnover and the losses set out in the letter of dismissal remain proven.”
In addition, the Court confirms that:
- There is a continuous reduction in net turnover
- Losses are proven in 2023 and in the first quarter of 2024
- The decrease in revenue is linked to structural changes in the market (AI and machine translation)
Based on all of the above, the court considers the dismissal for objective reasons derived from the technological disruption caused by AI to be correctly justified.
The TSJ confirms the validity of the objective dismissal and consolidates a relevant criterion:
The technological transformation of the sector—including the emergence of artificial intelligence—may be included in the factual assessment of the economic and productive causes of Article 52.c) ET when a real and sustained impact on economic viability is proven.
This is a ruling of strategic interest in sectors subject to significant technological disruption, where the key will not be the mere invocation of AI, but rather rigorous proof of its specific economic impact.
