Key data
| Regulation | Resolution of June 24, 2026, from the General Secretariat of Territorial Coordination — Agreement of the Bilateral Commission for Cooperation General State Administration-Community of Madrid |
|---|---|
| Reference norm | Law 6/2025, of December 23, General Budget Law of the Community of Madrid for 2026 — article 30 |
| BOE Publication | July 20, 2026 |
| Entry into force | July 20, 2026 |
| Affected parties | Workers linked to public contracts of the Community of Madrid and their employers |
| Category | Labor Legislation |
| Fiscal year | 2026 |
| Communication | Agreement forwarded to the Constitutional Court for formal closure of the controversy |
If your company executes public contracts with the Community of Madrid, this agreement affects you directly. Article 30 of the Law 6/2025 Madrid Budget for 2026 included a reference to the "non-applicability of indemnities" that generated a jurisdictional controversy: could regional budget regulations limit labor rights recognized by state law? The answer, set by the Bilateral Commission for Cooperation General State Administration-Community of Madrid on June 16, 2026, is clear: it cannot.
The agreement, published in the BOE on July 20, 2026, closes the jurisdictional discrepancy and protects the minimum rights of affected workers. The controversy has been communicated to the Constitutional Court for formal filing.
What does this regulation establish?
Article 30 of Law 6/2025 of the Budget of the Community of Madrid for 2026 contained a clause stating the "non-applicability of indemnities" in certain cases linked to Madrid public contracts. This wording raised doubts about whether it could be interpreted as a limitation on mandatory labor indemnities by law.
The State raised a jurisdictional discrepancy: the regulation of minimum labor rights is exclusive competence of the State, not of the autonomous communities. The Bilateral Commission for Cooperation resolved the conflict with the following binding criterion:
- The reference to the "non-applicability of indemnities" in article 30 does not affect indemnities that would be enforceable by law, even if not expressly included in the contract.
- The minimum labor rights of workers linked to public contracts of the Community of Madrid remain intact.
- The regional budget clause cannot displace or reduce the rights recognized by state labor law.
- The agreement is communicated to the Constitutional Court for formal closure of the raised controversy.
In practice, the authentic interpretation of article 30 is fixed: the "non-applicability of indemnities" can only refer to indemnities of a contractual or voluntary nature, never to those legally mandatory.
Economic and operational impact
For companies awarded public contracts with the Community of Madrid, the impact is mainly one of legal certainty: the ambiguity that could have led some companies to attempt not to pay mandatory indemnities under the wording of article 30 is eliminated.
- Accounting provisions: Companies must maintain provisions for legal indemnities (dismissal, contract termination, etc.) in their Madrid public contracts. There is no legal basis to reduce them.
- Risk of claims: Any company that had interpreted article 30 as an exemption from legal indemnities is exposed to labor claims and possible sanctions.
- Personnel management in contractors: Workers assigned to Madrid public contracts have the same indemnity rights as any worker, regardless of what the administrative contract says.
- Legal certainty for bidders: Companies preparing bids for new tenders must include mandatory labor indemnities in their costs, with no possibility of excluding them based on regional budget regulations.
Who does it affect?
- Companies awarded public contracts with the Community of Madrid (services, works, supplies).
- Workers assigned to the execution of Madrid public contracts, especially in cleaning, security, maintenance, social services and technology sectors.
- HR and legal departments of companies with contracts in the Community of Madrid that manage contract terminations and subrogations.
- Labor advisors and law firms that advise bidding companies or workers in Madrid public contracts.
- Procurement managers who calculate labor costs in bids to the Community of Madrid.
- Unions and worker representatives in companies with public contracts in Madrid.
Practical example
A cleaning services company executes a maintenance contract with a department of the Community of Madrid. Upon completion of the contract, several workers assigned to that service see their employment relationship terminated. The company, relying on the wording of article 30 of the Madrid 2026 Budget, intends not to pay the dismissal indemnities that would legally correspond.
Following the Bilateral Commission agreement published on July 20, 2026, that interpretation is not valid. The indemnities that the Workers' Statute and other state labor regulations recognize to those employees are fully enforceable, regardless of what the administrative contract or regional budget law establishes. The company must pay them or faces judicial claims and action by the Labor Inspection.
What should companies do now?
- Review active public contracts with the Community of Madrid: Identify if any contract or internal instruction had been drafted assuming that article 30 exempted from paying legal indemnities.
- Correct any incorrect internal criteria: If the HR or legal department had interpreted that the "non-applicability of indemnities" clause eliminated legal obligations, it must be corrected immediately.
- Maintain accounting provisions: Ensure that provisions for labor indemnities in Madrid public contracts have not been improperly reduced.
- Include indemnity costs in new tenders: When preparing bids for contracts with the Community of Madrid, calculate complete labor costs, including mandatory legal indemnities.
- Inform affected workers: Employees assigned to Madrid public contracts should know that their indemnity rights are fully in force and have not been limited.
- Consult with a labor advisor if there are pending contract termination situations that may have been managed under the incorrect interpretation of article 30.
Frequently asked questions
What exactly does article 30 of the Madrid 2026 Budget say about indemnities?
Article 30 of Law 6/2025 of the Budget of the Community of Madrid for 2026 included a reference to the "non-applicability of indemnities" in the context of public contracts. According to the agreement of the Bilateral Commission for Cooperation State-Madrid of June 16, 2026, that clause cannot be interpreted as an elimination of indemnities that are mandatory under state labor law, even if not included in the contract. It only affects indemnities of a voluntary or contractual nature.
Do workers in Madrid public contracts lose any indemnity rights with this regulation?
No. The agreement published on July 20, 2026 expressly confirms that workers linked to public contracts of the Community of Madrid retain their labor indemnity rights intact. Indemnities enforceable by law (dismissal, termination, etc.) must be paid regardless of what the administrative contract or regional budget law establishes.
When does this agreement become applicable?
The agreement was adopted by the Bilateral Commission for Cooperation on June 16, 2026 and published in the BOE on July 20, 2026, the date it entered into force. The controversy has been communicated to the Constitutional Court for formal closure.
What happens if a company has already denied indemnities to workers based on article 30?
That company is exposed to labor claims by affected workers, since the agreement confirms that legal indemnities are enforceable in all cases. It is recommended to consult with a labor advisor to evaluate the specific situation and, if appropriate, regularize it before claims or Labor Inspection actions occur.
Does this agreement affect public contracts in other autonomous communities?
Not directly. The agreement resolves a specific jurisdictional discrepancy regarding article 30 of the Law 6/2025 of the Budget of the Community of Madrid for 2026. However, the interpretive criterion is relevant as a reference: no regional budget law can limit the minimum labor rights recognized by state law.
Official source
Consult complete regulation in official source
Disclaimer: This article is for informational purposes only and does not constitute legal advice. For specific decisions, consult a qualified professional. Source: https://www.boe.es/diario_boe/txt.php?id=BOE-A-2026-15827
