The Collective negotiation, the hiring and the employment adjustment mechanisms To avoid layoffs are the three areas in which the agreement reached this Thursday by the Spanish Government with the social agents for a labour reform which is expected to be approved next Tuesday.

Collective negotiation

– The company agreement will have applicative priority over the higher level, except in salary matters.

– A collective agreement will remain in force while its renewal is negotiated, although after one year the parties must submit to mediation procedures or, if there is a prior agreement, arbitration.

Hiring

– By default, the employment contract is presumed to be concluded for an indefinite period of time.

– The contract for work and service disappears.

– The temporary contract may only be entered into due to production circumstances or by substitution of a worker with the right to reserve the job.

– The contract for production circumstances will not exceed 6 months, extendable to 1 year by sectoral collective agreement. It may be held when there is an “occasional and unpredictable increase” in activity or when there are “fluctuations that, even in the case of normal company activity, generate a temporary mismatch”, including annual leave.

It may also be used to deal with occasional, foreseeable situations of a limited and limited duration, for a maximum of 90 non-continuous days a year and never within the framework of contracts, subcontracts or administrative concessions that constitute the ordinary activity of the company.

– Fraudulent temporary contracts will be made permanent, as well as those who accumulate 18 months of work within a period of 24 months, in the same or different job positions with the same company or group of companies, through two or more contracts due to circumstances of the production, directly or through its making available by temporary work agencies.

– Collective agreements may establish plans to reduce temporary employment, as well as set maximum rates for temporary employment in the workforce and the consequences derived from non-compliance.

– The training contract will not be less than 6 months or more than one year.

– The fixed discontinuous contract is established for work of a seasonal nature or linked to seasonal productive activities, with certain execution periods. They may be carried out within the framework of contracts or by temporary work companies (ETT). Seniority will take into account the entire duration of the employment relationship and not the time of services actually rendered.

Records of temporary employment regulation (ERTE)

– ERTEs are maintained for economic, technical, organizational and production reasons (ETOP), as well as force majeure (due to administrative decisions, including those for the protection of public health), with voluntary exemptions of 20% and 90% of social contributions, respectively.

– RED Mechanism: companies may implement these ERTEs, after activation by the Council of Ministers, in the event of a crisis for a maximum of one year and with exemptions of 20 to 60%, or in case of sectoral restructuring for a renewable year two and with a 20% exemption. The exemptions will only be for companies that develop training actions.

The RED benefit will be 70% of the regulatory base throughout the period, from which the part of the social contribution will be deducted from the worker, and will not consume unemployment.

The Government will create a RED fund to meet the financing needs of the mechanism that will be endowed via general State budgets, with European financing and by the surplus of income from unemployment social contributions.

Termination of contract

– Once the maximum duration of the temporary contract has expired, if there is no complaint and the labor provision will continue, the contract will be considered tacitly extended indefinitely.

Outsourcing

– The sectoral collective agreement applicable to contractors and subcontractors will be that of the activity carried out, unless they have their own agreement, which will no longer have priority in terms of salary.

– The company that contracts or subcontracts with others must verify that they are up to date with their salary obligations and with Social Security and will be jointly and severally liable for this. This will not apply in the activity of construction or home repair.