We thought it would be useful to create a "reference section" covering the different types of employment contracts currently in force in Spain, setting out the specific features and advantages of each, so that companies can identify which type best suits their particular needs.
Written by Josep Conesa
Employment and insolvency lawyer
Below is a brief overview of the topics this section will cover in upcoming instalments. Spanish employment law recognises the following types of employment contract:
- Permanent contracts without incentives: open-ended contract, contracts to promote permanent employment.
- Permanent contracts with incentives: contracts for unemployed women, for jobseekers registered for six months or more, for workers aged 45 or over, and for recipients of subsidy.
- Conversion of a fixed-term contract into a permanent contract with incentives.
- Training contracts: work placement employment contract, apprenticeship contract.
- Fixed-term contracts: contract for a specific project or service, contract for temporary production needs, interim/cover contract, interim contract to replace an employee on unpaid leave for family care with a reduction in Social Security contributions, interim contract to replace workers on maternity leave, leave due to pregnancy risk, or adoption leave, with a bonus on Social Security contributions.
- Permanent seasonal contract.
- Other employment contracts: home-working employment contract.
PERMANENT CONTRACTS WITHOUT INCENTIVES:
1.- Open-ended employment contract.
| CONTRACT TYPE | PERMANENT employment contract |
| FORMATION, DURATION AND WORKING HOURS | The employment contract may be concluded verbally or in writing. It must be notified to the Public Employment Service within 10 days of being entered into. |
| OTHER FEATURES | · Workers who have not been registered with Social Security will acquire permanent employee status, regardless of the type of contract under which they were hired, once a period equivalent to the legally applicable probationary period has elapsed. · Fixed-term contracts entered into in breach of the law shall be presumed to be permanent contracts. |
| APPLICABLE LEGISLATION | · Art. 15 of Royal Legislative Decree 1/1995 of 24 March, approving the Consolidated Text of the Workers' Statute (BOE 29-3-95), as amended by Law 12/2001 of 9 July (BOE 10 July). |
2.- employment contract to promote permanent employment:
| CONTRACT TYPE | employment contract TO PROMOTE PERMANENT EMPLOYMENT |
| WORKER ELIGIBILITY REQUIREMENTS | This contract may be entered into with workers falling within one of the following groups: A) Unemployed workers registered with the Public Employment Service who meet at least one of the following conditions: 1.- Young people aged between 16 and 30 years (inclusive). B) Workers who, at the date of conclusion of the new permanent employment promotion contract, were employed by the same company under a fixed-term or temporary contract — including training contracts — entered into before 31 December 2007. |
| COMPANY REQUIREMENTS | A company may not enter into this type of contract if, in the six months prior to its conclusion, it has carried out terminations of employment contracts on objective grounds that have been declared unfair by court ruling, or has carried out a collective dismissal, within the terms of paragraph 5 of Additional Provision 1 of Law 12/2001 of 9 July (BOE of 10 July). |
| FORM, DURATION AND WORKING HOURS | · The contract shall be concluded for an indefinite period and must be formalised in writing using the prescribed template. - · It must be registered with the Public Employment Service within 10 days of its conclusion. |
| INCENTIVES | Where the contract is terminated on objective grounds and such termination is declared unfair, the severance compensation shall amount to 33 days' salary per year of service, up to a maximum of 24 monthly payments, as set out in paragraph 4 of Additional Provision 1 of Law 12/2001 of 9 July (BOE of 10 July). |
| OTHER FEATURES | Initial contracts or conversions, whether full-time contract or part-time contract, entered into under this arrangement may benefit from reductions in Social Security contributions, depending on the category to which the employee belongs, in accordance with the provisions of Royal Decree Law 5/2006 of 9 June (BOE of 14 June), provided that the requirements set out in that legislation are met. |
| LEGISLATION | Additional Provision 1 of Law 12/2001 of 9 July (BOE of 10 July) on Urgent Measures for Labour Market Reform and the Improvement of its Quality. - Royal Decree Law 5/2006 of 9 June (BOE of 14 June) |
