Executive Summary
The year 2020 represented the most demanding stress test of the Spanish legal system in decades. The declaration of the **state of emergency** on 14 March activated an exceptional constitutional framework that concentrated executive powers in central government and temporarily suspended fundamental rights of movement and assembly. The legal order had to adapt at unprecedented speed: over **thirty Royal Decree-laws** modified the employment, commercial, procedural and tax frameworks in under twelve months.
COVID force majeure ERTEs were the central employment law instrument of the corporate response. BMC processed an extraordinary volume of filings, adapting continuously to the evolving regulatory framework.
Key Highlights
The state of emergency (14 March to 21 June, the first time in Spanish democracy since 1981) raised first-order constitutional questions about the scope of restricting fundamental rights without declaring a state of exception. The Constitutional Court received multiple appeals that would not be resolved until subsequent years.
COVID ERTEs generated over 600,000 proceedings processed before the SEPE and Social Security. The legal management involved: preparing communications to workers’ legal representatives, processing with the labour authority, managing Social Security contribution exemptions and monitoring employment maintenance commitments.
Remote work shifted from a marginal practice to a majority reality overnight. The absence of specific regulation — the Remote Work Act was not approved until September 2020 — created legal uncertainty about rights, obligations and compensation.
Practice Area Analysis
Insolvency law: The insolvency moratorium (suspension of the obligation to file for insolvency when the cause was pandemic-related) was successively extended. The 2021 economic recovery moderated the anticipated wave of proceedings.
Contract law and force majeure: The pandemic reactivated debate about the rebus sic stantibus doctrine and the application of force majeure in lease, supply and service contracts. Courts had to rule on the distribution of risk in contracts whose performance had become impossible or excessively burdensome.
Competition law: Extraordinary state aid was subject to a temporary European Commission communication that relaxed ordinary state aid controls. Speed of implementation of relief measures was prioritised over standard control procedures.
Platform economy: The December 2020 CJEU ruling on classifying Uber drivers as employed workers accelerated the regulatory debate in Spain, which would culminate in the Riders’ Act in 2021.
Regulatory Changes
Law 10/2020 of 29 September on remote work established the regulatory framework for structural teleworking, distinguishing it from the extraordinary COVID telework arrangement. The law introduced the right to expense reimbursement and to time tracking for teleworkers, with a three-month transition period.
Employment law services required in 2020 a capacity for continuous adaptation, with regulatory updates arriving at a pace that exceeded any previous year.
Outlook
The year 2021 would bring the negotiation of the labour reform, the debate on regulating riders and the platform economy, and the beginning of the labour market recovery process.
Our employment and business law team demonstrated in 2020 an extraordinary capacity for response in an environment of permanent legal transformation.
