How it affects workers and companies





The labor reform approved by the Council of Ministers in December, after an agreement in extremis reached with the social agents, and validated this Thursday in the Congress of Deputies brings news for both workers and employers. The former will have more possibilities to have an indefinite contract and their salaries may not be below those set by the sector of activity; while the latter may use a mechanism similar to the ERTE to make adjustments to the workforce and modify working conditions for economic or productive reasons.

The rule, which replaces the labor framework established by the Executive of Mariano Rajoy with the previous reform of 2012, touches on various aspects of the Workers’ Statute, such as contracting and collective bargaining, and increases the penalties for offending companies. All with one main objective: to reduce temporary employment in Spain, while Spain complies with the requirements of the European Commission in order to receive a new batch of European funds. But how does it affect in practice?

I’m a worker

  • The usual will be the indefinite contract

The labor reform requires companies to specify the reason for hiring, which can only be to replace workers or due to production circumstances and for a maximum of 6 months, extendable to 12 if so stipulated in the agreement. In this way, the intention is that people who join a new job do so with an indefinite contract, either permanent or permanent-discontinuous.

Precisely the fixed-discontinuous will be the contract that the parties intend to be used by those workers belonging to seasonal sectors, who commonly resorted to temporary to incorporate personnel each season.

  • The storms will have to be indefinite in three months
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Companies will have a period of three months from the entry into force of the rule to transform temporary contracts into indefinite ones, that is, from January to March.

  • Work and service contracts disappear

This is one of the main novelties of the reform. Contracts for work and service – “the star modality to practice this type of disorder in the labor market”, Díaz pointed out -, will disappear in September 2022. During the next three months, companies will be able to continue using this contract, but with a maximum duration of six months. While those that have been signed before the entry into force of the labor reform, will be maintained until they lose their validity.

Díaz assures that the contracts for work and service currently in force will have a duration of six months

  • Goodbye to chain temporary contracts

The rule reduces to 18 months in a period of 24 months the term of chaining contracts to acquire the status of indefinite worker, compared to 24 months in a period of 30 months currently in force.

  • Wages may not fall below what is stipulated in the agreement.

It is known as the primacy of the sectoral agreement over the company agreement. In other words, if a company wants to reduce wages, it cannot do so below what is stipulated in the agreement of the sector of activity in question. For the same reason, it will not be possible to have a lower salary from the outset than what is established in said agreement.

Along the same lines, contract and subcontract workers will be subject to the agreement of the sector of the activity carried out.

  • Expired agreements remain
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Another conquest of the unions has been the so-called “ultra-activity”, which is once again indefinite. In this way, when the term of a collective agreement expires, this does not decline until there is a new agreement. The 2012 reform established a limit of one year, a term that allowed previously agreed agreements to be discarded simply by waiting, causing the labor rights acquired until then to decline.

I am under 30 years old and looking for my first job

  • Two new types of contracts

Young people will see their work activity regulated through two new types of contract, which replace the internship: training “alternating”, while they are studying; and “for obtaining professional practice”, aimed at those who already have a degree and are learning the profession. Among the innovations, the training contract is increased by five years -up to 30- and it will be mandatory to have a tutor; while the professional practice will be signed within three years (5 years with people with disabilities).

A lifetime of temporary work in the hospitality industry

The dual training contract reduces its duration: from three months to two years. For its part, the contract to obtain the professional practice will be signed for a minimum period of six months and a maximum of 12.

  • salaries are equal

In addition, the compensation It will be the one that marks the collective agreementwhen now it could be 60 and 75% of what he set.

I’m a businessman

  • New ERTE to avoid layoffs

If a company is forced to make an adjustment to its workforce in a future crisis, whether in the economy (cyclical) or in particular sectors, it may use the RED Mechanism for Employment Flexibility and Stabilization, similar to the Temporary Regulation File of Employment (ERTE) to which companies have resorted after the outbreak of the pandemic. If they do, the companies will receive fiscal benefits and for the training of its staff.

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In exchange, they must maintain their employment for six months; while the workers covered by this mechanism will receive a benefit similar to that of unemployment (70% of the contribution base) without being consumed by the unemployment generated to date, as has happened with the ERTE during the crisis.

  • Allowed changes in working conditions

Employers also bind article 41 of the Workers’ Statute, which allows them to modify working conditions, for example, shifts, hours or wages for economic or productive reasons.

  • More penalties for offenders

Companies that commit infractions will be exposed to greater infractions, since not only the amounts of sanctions are increased up to 10,000 euros in the most serious cases, but will be applied by each worker. Now only fines are imposed on the company as a whole for a detected infringement.

Likewise, “very high frequency” contracts will be sanctioned with higher prices.


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George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

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