Following the 2022 labour reform in Spain, enacted through the Royal Decree-Law 32/2021, of 28 December on Urgent Measures for Labour Reform, Job Stability Guarantee, and Labour Market Transformation, the country has made significant changes to employment contracts.
This reform promotes job stability and adapts the labour market to current challenges by introducing significant changes in the types of employment contracts. It aims to promote job stability, reduce temporary employment, and adapt the labour market to the new socio-economic and technological realities, such as digitalisation and globalisation.
Among the most notable changes are new measures to encourage permanent hiring, incentives to convert temporary contracts into permanent ones, and a review of various aspects related to labour flexibility. These changes aim to improve working conditions and strengthen the Spanish economy in a context of ongoing change and transformation.
There are two subtypes of temporary contracts, differentiated by the predictability of the occasional increases in work that justify the hiring:
- Contract for occasional and unforeseen circumstances. This type of contract covers temporary mismatches between job supply and demand. Its maximum duration is six months, which can be extended to 12 months with a single renewal, as established in the Collective Bargaining Agreement.
- Contract for occasional and predictable circumstances. This type of contract covers occasional and foreseeable situations of short and clearly defined duration. Its maximum duration is 90 days, not continuous within the calendar year.
Labour Obligations in Prime Contracts and Subcontracts
Contracts and subcontracts arise when a company, known as the principal company, delegates the performance work or services necessary for its activities to other contractor or subcontractor companies. Companies carry out this delegation through civil or commercial contracts. Cooperation between companies arises from the complexity of the production process, which sometimes requires the outsourcing or decentralisation of certain activities.
The 2022 labour reform, promoted by Royal Decree-Law 32/2021 (https://www.boe.es/buscar/act.php?id=BOE-A-2021-21788), also introduces significant changes to temporary contracts linked to main and subcontracts:
- The types of fixed-term contracts are changed, affecting Article 15 of the Workers’ Statute and eliminating the possibility of contracts for specific work or services. Fixed-term contracts will only be allowed for production reasons or replace workers.
- It is forbidden to justify temporary contracts based on the performance of routine company work in main contracts or subcontracts unless they comply with the new regulations.
- Fixed-term discontinuous contracts encouraged for activities related to commercial or administrative arrangements.
- A clear justification of the temporary nature of the employment is required, stating the enabling reason, the specific circumstances, and how they relate to the expected duration of the contract.
In summary, the 2022 Labour Reform, supported by Royal Decree-Law 32/2021, introduces significant changes to employment labour contracts in Spain. The aim is to promote job stability and adapt the labour market to current challenges. Key measures include incentives for permanent hiring, restrictions on temporary contracts, and regulations on contract subtypes. In addition, main contracts and subcontracts will outline clear labour obligations, focusing on justifying temporary work and prohibiting hiring for specific occasional work. These changes aim to improve working conditions and strengthen the Spanish economy in a context of continuous transformation.
Eduardo De Sousa Gama
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