The Grand Chamber has ruled that converting abusive fixed-term contracts into “non-permanent indefinite” relationships, Spain’s go-to judicial remedy, does not actually fix anything, and that the accompanying compensation and stabilisation measures fall short of EU law’s requirements.
April 14th, 2026 – The ECJ, sitting as Grand Chamber, has delivered its judgment in Case C‑418/24, referred by Spain’s Tribunal Supremo (Supreme Court), interpreting Clause 5 of the Framework Agreement on fixed-term work annexed to Council Directive 1999/70/EC. The ruling, issued in response to widespread inconsistency in how Spanish courts were handling cases of abusive contracting in the public sector, declares that the tools Spain had been using to address the problem were not good enough.
The Case: Six Years Without Job Security
The applicant, TJ, had been working at a public educational establishment in Madrid since 2016 under six successive fixed-term contracts, all formally justified as covering a vacant post or replacing a worker. After more than five years, she brought proceedings to have her employment classified as permanent. The Spanish courts declined to grant her that status, because she had never gone through a competitive public selection procedure, as required under the Spanish Constitution for permanent public employment, but did classify her relationship as a “non-permanent employment relationship of indefinite duration” (relación laboral no fija de duración indefinida), a judge-made category developed by the Tribunal Supremo precisely to handle these situations.
That classification meant she kept her post until it was filled through a proper selection process, at which point her employment would end and she would receive flat-rate compensation of 20 days’ pay per year of service, capped at 12 months’ salary. It also meant she was, still, a temporary worker.
The Tribunal Supremo itself was uncertain whether its own solution was compatible with EU law. The question had become urgent because Spanish courts were applying the 2024 ECJ ruling in Consejería de Presidencia (C‑59/22 and joined cases), which had already found issues with Spain’s framework, in contradictory ways. So the Supreme Court referred the matter back to Luxembourg.
The Court’s Ruling, a Victory Fore Spanish Public Sector Temporary Workers
The Grand Chamber’s answer on the core question is unambiguous. A judicial measure that responds to abuse of successive fixed-term contracts by converting them into a relationship that is still temporary in nature does not penalise that abuse, it just perpetuates it. The employment relationship remains precarious, the worker’s insecurity continues, and the employer faces no meaningful consequence. That is directly contrary to what Clause 5 requires, which is a measure capable of nullifying the consequences of the breach of EU law.
The Court is careful to note that EU law does not require Member States to convert abusive contracts into permanent employment. What it does require is that whatever measures are chosen must be effective, dissuasive, and proportionate. The “non-permanent indefinite” category fails that test because it keeps the worker in limbo, protected for now, but with no path to stability.
The Defence’s Arguments
Spain had argued, through Law 20/2021, that its broader package of measures, a stabilisation process for public sector temporary workers, accountability rules for administrations, and preferential weighting of prior experience in competitive procedures, together constituted a sufficient response. The Court assesses each component in turn.
On the administrative liability rules introduced by the law, the Court notes that a well-designed liability mechanism could, in principle, constitute an adequate measure, referring to the Italian model it had approved in Santoro (C‑494/16), where managers could be held personally responsible, lose bonuses, and trigger procurement bans. The Spanish provisions, however, are worded at a level of abstraction that makes them difficult to apply in practice, a criticism the Court had already made in the 2024 Consejería de Presidencia ruling. The referring court is tasked with verifying whether the rules are sufficiently specific and foreseeable in practice, but the Court’s framing leaves little doubt about its scepticism.
On the selection procedures, the Court’s finding is similarly unfavourable. While giving abused workers priority in competitive processes might help those who participate and succeed, it does nothing for those who do not, and, critically, the preferential weighting of prior experience in Law 20/2021 is not limited to workers who were abusively contracted. It applies to all experienced fixed-term workers regardless of abuse. A remedy that does not distinguish between abused and non-abused workers cannot be characterised as a penalty for the abuse.
The ruling does not tell Spain what to do, as that is a matter for the Spanish legislature and courts, but it does tell Spain what does not work. The “non-permanent indefinite” category, the capped compensation, the ambiguous liability framework, and the non-targeted stabilisation procedures, taken individually or together, do not meet the requirements of Clause 5. The Tribunal Supremo must now determine the correct classification of TJ’s relationship and, more broadly, the compatibility of the overall Spanish framework with EU law, armed with this guidance.
Given that the Tribunal Supremo referred this case precisely because of contradictory lower court rulings, and that the referring court has jurisdiction to standardise interpretation across all Spanish labour courts, this judgment is likely to trigger a significant revision of how Spain’s public sector handles temporary employment abuse.
