We bid farewell to the legislative year with the publication in the Official State Gazette of Royal Decree-Law 32/2021, of December 28, on urgent measures for labor reform. A text that includes the agreement reached by trade unions and employers' organizations after a long negotiation process.
The following is a brief summary of the main novelties of this important and announced reform, although the final text may undergo modifications during its parliamentary processing depending on the support that the Government manages to obtain in order to validate the law.
1. Main objectives of the standard.
Based on a diagnosis of the main problems affecting our labor market, RD-Law 32/2021, the reforms focus on four fundamental aspects:
- Temporary contracts and training contracts.
- Collective bargaining.
- Contracting and subcontracting of companies.
- Establishment of the RED mechanism for flexibility and stability.
2. Temporary hiring.
The contract for work or service is eliminated and two types of temporary contracts are distinguished, the fixed-term contract due to production circumstances and the contract for substitution.
Fixed-term contract due to production circumstances
The new Article 15 of the Workers' Statute allows the use of this type of contract, but requires that "the contract must specify precisely the reason for the temporary contract, the specific circumstances that justify it and its connection with the planned duration".
The standard distinguishes between two different cases or circumstances:
- occasional unforeseeable circumstances and fluctuations which, even when dealing with the normal activity of the company, generate a temporary mismatch between stable employment; and
- occasional circumstances.
In the first case, the duration of the contract may not exceed six months, which may be extended up to one year by a sector-wide collective bargaining agreement.
In the second case, companies may only use this contract for a maximum of ninety days in the calendar year, the occasional foreseeable circumstances must be duly identified in the contract and the ninety days may not be used continuously.
The new art. 15 ET, in relation to the contract due to foreseeable circumstances of production, also establishes that:
"The performance of work under contracts, subcontracts or administrative concessions that constitute the usual or ordinary activity of the company may not be identified as a cause of this contract, without prejudice to its conclusion when circumstances of production in the above terms."
It should be noted that the regulation of this type of contract -which will become the most widely used temporary contract- includes numerous indeterminate legal concepts ("occasional increase"; "unforeseeable increase"; "temporary mismatch"; "available stable employment"), which will complicate a peaceful interpretation of the rule, with the risk that the contract will have to be classified as indefinite and be subject to penalties.
Substitution contract
According to Art. 15 ET, the substitution contract can be used in three situations:
- To replace a person with job reservation: specifying the name of the person replaced and the cause of the replacement.
- To complete the reduced working day by another worker when such reduction is based on legally established causes or the collective bargaining agreement. It shall also require specification of the name and cause of substitution.
- For the temporary coverage of a job position during the selection or promotion process for its definitive coverage by means of a contract In this case, the duration may not exceed three months.
Effects of unlawful temporary employment and the concatenation of contracts
Art. 15.4 ET establishes that: "Persons hired in breach of the provisions of this article shall acquire the status of permanent employees. Temporary workers who have not been registered with the Social Security after the expiration of a period equal to that which could have been legally established for the trial period shall also acquire the status of permanent employees".
On the other hand, Art. 15.5 ET provides for the conversion to "permanent" of workers if they have been hired:
"who in a period of twenty-four months have been employed for a period of more than eighteen months, with or without interruption, for the same or a different job with the same company or group of companies, by means of two or more contracts due to circumstances of production, either directly or through temporary employment agencies".
In order to discourage the fraudulent use of temporary contracts, Royal Decree Law 32/2021 has introduced some changes in the Law on Social Order Infringements and Penalties (LISOS) that result in a possible increase in penalties through, fundamentally, the consideration of the infringement for each worker affected.
What about the contract for a specific work or service?
As we have already mentioned, with the Labor Reform of 2021 this contractual figure disappears, although for the Construction Sector a new "indefinite-term contract assigned to work" is foreseen, which is defined as:
"those whose object are tasks or services whose purpose and result are linked to construction works, taking into account the activities established in the functional scope of the General Agreement of the Construction Sector".
With this contract, at the end of the work, the company must make a relocation proposal to the worker, after the development, if necessary, of a training process that may be carried out prior to the end of the work.
The following are assimilated to the completion of a work: the actual decrease in the volume of work due to the gradual completion of the corresponding execution units, as well as the definitive or temporary stoppage of a work, due to causes unforeseeable by the company and beyond its control.
Once the outplacement proposal has been made, the contract may be terminated for reasons inherent to the employee in any of the following circumstances:
- The affected worker rejects the outplacement.
- The qualification of the person.
- The non-existence in the province in which the worker is hired of works of the company in accordance with his/her professional qualification, level, function and group.
The termination of the contract must be communicated "seven days prior to its effectiveness and will give rise to a seven percent indemnity calculated on the salary concepts established in the tables of the applicable collective bargaining agreement and which have been accrued during the entire term of the contract, or the higher amount established by the General Agreement of the Construction Sector".
In cases b) and c) the obligation to give fifteen days' notice of termination of the contract is established.
Transitional regime and "vacatio legis".
For fixed-term contracts entered into prior to December 31, 2021, Transitional Provision 3 of RD-Law 32/2021 provides that temporary contracts due to production circumstances, interim contracts, contracts for specific works and services, as well as permanent contracts entered into pursuant to the provisions of Article 24 of the VI State Construction Agreement, which are in force on the aforementioned date, will be governed by the previous regulations until their maximum term.
For fixed-term contracts entered into between December 31, 20221 and March 30, 2022, the 4th Transitional Provision establishes that the regulations for contracts for specific work or services and temporary contracts due to production circumstances "shall be governed by the legal or conventional regulations in force on the date on which they were entered into and their duration may not exceed six months."
New regulation of permanent-discontinuous contracts
The important limitations on the use of the contract for circumstances of production, as well as the disappearance of the contract for work or service, are accompanied by a new regulation of the fixed-term contract, which broadens its purpose and now includes:
- Work of a seasonal nature.
- Jobs related to seasonal productive activities.
- Work that does not have such nature but, being of intermittent performance, has certain, determined or undetermined periods of execution.
- Provision of services within the framework of the execution of commercial and administrative contracts that, being foreseeable, are part of the ordinary activity of the temporary employment agency and a person hired to be assigned.
The significant increase in the number of qualifying legal assumptions is a consequence of the firm commitment to this type of contract to replace the use of fixed-term contracts and reduce the high rates of temporary employment.
New training contracts.
In accordance with the new wording of Article 11 ET, the purpose of the so-called "training contract" will be training in alternation and obtaining professional practice.
Training contract in alternationThe alternating training contract: may be entered into with persons of any age, except in the case of the Professional Qualifications Catalog, with a limit of up to 30 years of age, who do not have a degree to enter into a professional practice contract and with a maximum duration of two years, with no probationary period being agreed upon.
Two tutors must be appointed by the company and the training center or entity and an individual training plan must be drawn up specifying the content of the training.
The remuneration will be adapted to the agreement and may not be less than 60% in the first year, and 75% in the second year, and will never be less than the Minimum Interprofessional Wage proportional to the working day.
Contract for obtaining professional practiceThe internship contract: when you have a university degree, an intermediate or higher degree, a specialist, or a professional master's degree. It may be concluded up to three years after completion of studies and will have a duration of between six months and one year, as opposed to the two years allowed by the previous internship contract. A trial period of 1 month maximum may be agreed.
It also establishes the obligation of the company to draw up an individual training plan specifying the content of the internship and the assignment of a tutor with adequate training to monitor the plan.
The remuneration will be that established by the collective bargaining agreement applicable in the company for these contracts, but in no case may it be less than that established for the alternating training contract.
4. Collective bargaining: changes in priority of application and ultra-activity of agreements.
The new regulations maintain the priority of the company agreement over those of a higher level, except for the amount of the base salary and salary supplements, including those linked to the company's situation and results, in which the provisions of provincial, autonomous community or state agreements will prevail.
For the rest of the working conditions of Article 84.2 ET (working hours and distribution of working time, vacation planning, payment or compensation for overtime, etc.), the priority of application of the provisions of the company's collective bargaining agreement is maintained.
Article 86 of the Spanish Workers' Statute is amended to restore the indefinite ultraactivity of collective bargaining agreements one year after their termination without agreement:
"After one year has elapsed since the termination of the collective bargaining agreement without a new agreement having been reached, the parties must submit to the mediation procedures regulated in the interprofessional agreements at the state or autonomous community level provided for in Article 83, in order to effectively resolve the existing discrepancies. Likewise, whenever there is an express, prior or contemporaneous agreement, the parties shall submit to the arbitration procedures regulated by said interprofessional agreements, in which case the arbitration award shall have the same legal effectiveness as the collective bargaining agreements and may only be appealed in accordance with the procedure and on the grounds set forth in Article 91, without prejudice to the development and final solution of the aforementioned settlement procedures, in the absence of agreement, when the bargaining process has elapsed without an the negotiation process has elapsed without reaching an agreement, the agreement has been reached, the collective bargaining agreement shall remain in force.."
5. Contracting and subcontracting of companies.
RD-Law 32/2021 adds a new section (number 6) to Article 42 of the Spanish Workers' Compensation Law:
"The collective bargaining agreement applicable to contractors and subcontractors shall be that of the sector of the activity carried out in the contract or subcontract, regardless of its corporate purpose or legal form, unless there is another applicable sectoral agreement in accordance with the provisions of Title III."
However, when the contractor or subcontractor has its own agreement, this shall be applied in the terms resulting from Article 84″.
With this new wording, the agreement applicable to the contracting company is therefore established as the sector agreement applicable to the main company or the company agreement of the latter.
6. The new RED mechanism for employment flexibility and stabilization.
The recently approved legislation creates the so-called "RED Mechanism" for flexibility and stabilization of employment, subject to authorization by the Council of Ministers. This mechanism is regulated in the new article 47 bis ET and will allow companies to reduce working hours and suspend contracts in two cases:
Cyclical mode: general economic situation, maximum 1 year.
Sectoral modality: permanent changes in sector(s) requiring retraining and professional transition. Maximum 1 year, with 2 extensions of 6 months each.
The activation of this mechanism will mean that companies will be able to request ERTES for reduction of working hours or suspension through a specific procedure depending on the modality activated or used.
