The High Court of Justice of Madrid has ruled that bringing in AI is not, on its own, a ground for dismissal under Spanish law1. Its judgment 864/2026, dated 8 October and made public this week, says an employer must prove AI's effect through the four causes the Workers' Statute (Spain's main employment law) already lists: economic, technical, organisational and production. "La implantación de IA no constituye una quinta causa de despido," the court's employment chamber held: introducing AI is not a fifth cause of dismissal.
The case began with a collective redundancy (an ERE, Spain's procedure for group layoffs) at a video-game studio the court did not name. The court upheld a lower ruling that one worker's dismissal was unfair, because the company had not shown that the AI tool replaced that worker's tasks2. No party appealed a second dismissal, which the original trial court had ruled fair.
The ruling moves the burden onto evidence: an employer in Madrid that says AI did the job has to prove the tool took over that worker's tasks. UGT (Unión General de Trabajadores), one of Spain's two largest union confederations, counts 10 large collective dismissals in Spain linked to AI, affecting at least 6,711 people; any of them challenged in court could face the same test. A Spanish court ruled on algorithmic employment decisions in July, and the call-centre firm Concentrix's cuts in A Coruña went through on negotiated terms.
The ruling binds this case, and only Spain's Supreme Court can set national doctrine. Employers can still dismiss on technical or organisational grounds when they prove them, so the judgment raises the bar of evidence without barring AI-linked layoffs.
