March 2026
Pay Differentiation and Ordinary Sickness in the Performance and Retention Bonus.
Supreme Court. Social Chamber. Judgment 159/2026 of 12 February
Executive Summary
- The Supreme Court holds that it is not discriminatory to proportionally reduce a bonus linked to performance and retention during periods of temporary incapacity due to ordinary sickness, since the suspension of the employment contract entails the absence of effective work.
- By contrast, it is discriminatory to deny access to the bonus by requiring a minimum of three months actually worked without counting temporary incapacity due to ordinary sickness, as this turns the illness into a direct obstacle to acquiring entitlement.
- The Supreme Court upholds the difference in treatment between common and occupational contingencies and declares null only the part of the collective agreement that excludes temporary incapacity due to ordinary sickness for the purposes of reaching the minimum retention threshold, while maintaining the proportional accrual rule as lawful.
I. Background to the Dispute
Judgment 159/2026 of the Supreme Court, addressed in this commentary, examines an issue which—following Law 15/2022 of 12 July on equal treatment and non-discrimination—has moved to the centre of labour law debate: namely, the extent of the prohibition of discrimination on grounds of illness when applied to pay incentives linked to effective work.
The appeal in cassation giving rise to the aforementioned ruling was lodged by the Confederación Intersindical Galega against the judgment of the National High Court (SAN) of 16 September 2024, delivered in collective agreement challenge proceedings. That judgment had upheld several provisions of the Company Collective Agreement (2024–2028), thereby providing the Supreme Court with the opportunity to rule on a matter of significant practical importance: namely, to what extent illness—now expressly configured as an autonomous ground of discrimination—impacts the pay regime during suspension of the employment contract and limits the freedom of collective bargaining in relation to variable incentive schemes.
Strictly speaking, the trade union claim was not confined to the above. It in fact advanced three grounds of challenge: (i) the collective regulation of the deferral of parental leave, (ii) the calculation system for the general performance and retention bonus, and (iii) the attribution of certain powers to the Inter-Centres Committee.
In this regard, although—consistently with the claim—the judgment addresses all three grounds in full, it is the second that concentrates the real legal significance of the ruling, as it brings into direct tension the principle of equality on grounds of illness and the legal regime governing suspension of the employment contract.
The analysis that follows focuses specifically on this issue.
