Spanish government approves partial retirement and reforms interim worker indemnities

The Council of Ministers approved a measure that restores partial retirement for labour staff in Spain’s public administrations. The new rule allows a temporary replacement contract when a worker retires early, a change meant to end a blockade that halted partial retirements in April 2025. It could affect up to 700 000 public employees in municipalities, regional governments and universities, but it does not extend to civil servants or statutory health‑care staff.

At the same time, the government has asked the European Union for an extension until March 2027 to overhaul the indemnity regime for interim (temporary) public employees, following judgments from the EU Court of Justice. Minister Óscar López announced a meeting on 8 July with the autonomous communities to design the changes, which include moving beyond the current 20 days per year indemnity and tackling high temporary‑employment rates in education and health (about 40‑43%). Both initiatives aim to curb excessive temporary contracts and improve labour conditions for public‑sector workers.