Temporary work contracts to be limited in Spain

Spain’s bid to modernise the labour market includes significant changes to work contracts. From March 31, fewer temporary contracts can be issued with firms facing fines of up to €10,000 for fraudulently issuing these contracts.

Companies will have three months to adapt existing temporary contracts to the new legislation and six months for works and service contracts. There will be one fixed-term contract, which may be used due to production circumstances or the substitute of a worker.

These regulations form part of Spain’s recovery plans and to fight the high number of workers in Spain on temporary contracts.

Some fixed term contracts can be issued in certain circumstances. These include:

• An unexpected peak in work that is not foreseeable and does not happen every year. The contract will be for a maximum of six months which can be extended to a year. This type of contract would be for an unpredictable increase in demand, such as a mask manufacturer during the pandemic.
• Foreseeable occasional increases in workload. This could be a peak in seasonal work or for special occasions. This type of contract would cover stores which have an increase in business during the sales or Christmas or restaurants to cover weddings or big events. The maximum duration of this contract is 90 days in a calendar year and may not be used continuously. For example, a restaurant which holds weddings over 15 weekends could hire staff under this contract. The 15 weekends would mean 30 days worked and there are still another 60 days available for other events or celebrations.
• Upturns in normal activity. This could include the need to hire extra staff to cover for workers’ holidays and have a maximum duration of six months which can be extended to one year.

Permanent seasonal contracts will be introduced, which will benefit workers in the hospitality industry and agricultural sector, for example. The permanent seasonal contracts will count from day one and not only the weeks or months worked.

Penalties for fraudulent contracts have been increased from between €1,000 to €10,000 for each contract.

Contact us for further information or advice about work contracts and employees’ rights.

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Laura Miralles Server and Maria Diego Leyda
Impley – Legal, Accounting & Tax Advice
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