New contracts after the Labor Reform
The labor reform whose Royal Decree-Law was published in the BOE on December 30, 2021 and which entered into force a day later, on December 31, except in some Matters whose validity was postponed, such as the ones we are going to comment on, have the objective of eliminating the excessive temporality that had been occurring in our labor market.
Some of the modifications that have occurred and more specifically in terms of temporary contracting of article 15 ET have not entered into force until three months after its publication, that is, the March 31, 2022. And, since then, all contracts signed must meet the following requirements:
Temporary contracting (article 15 ET)
The new wording of article 15 ET establishes that the employment contract will be presumed to be entered into for an indefinite period of time unless proven otherwise. In addition, the second paragraph of the aforementioned article eliminates specific work or service contracts, thus limiting the temporary contract to two causes: due to production circumstances and substitution.
Temporary contract due to production circumstances
It can be used in two types of situations:
- Occasional and unpredictable increase in activity: this was the old eventual contract due to market circumstances/excess orders, when there is a peak in production that cannot be foreseen, such as the arrival of new clients or the order of highly complex orders that require more labor. It can only be used in the event that a discontinuous fixed contract cannot be made. The duration of this contract may not exceed 6 months and by sectoral collective agreement the maximum duration may be extended to 1 year.
- Swings that generate a mismatch between stable employment and that which is required, even in the case of the company’s normal activity (the swing does not have to be unpredictable) An example would be workers in department stores at Christmas time. In this type of contract, the company has 90 days to carry out these contracts, being able to carry out the contracts they wish in those 90 days that cannot be used continuously.
Temporary contract for replacement of worker with the right to reserve the job position
It is practically identical to the one that has been existing in article 15.1.c) ET. The only novelty to highlight is that the substitute may begin to provide services up to 15 days before the start of the substitution.
Permanent-discontinuous employment contract
This modality is intended to encourage companies to opt for this figure and to be able to put an end to the excessive temporary hiring that had been taking place up to now.
After the reform, its application is allowed under three modalities: carrying out work of a seasonal nature or linked to seasonal productive activities (Christmas, summer, etc.), development of intermittent work and that have certain, determined or indeterminate periods of execution (paddle tennis instructor in a weekend club), development of work consisting of the provision of services within the framework of the execution of commercial or administrative contracts that, being foreseeable, form part of the ordinary activity of the company.
This type of contract must necessarily be formalized in writing.
The appeal must follow objective and formal criteria established by collective agreement or, failing that, by company agreement and must be made in writing or by any other means that allows recording of the due notification to the interested person, having to make clear the conditions of their incorporation and the date on which it will take place. In addition, the company must notify the workers’ representatives of a calendar with the forecasts of the calls that will take place throughout the year.
In the event of a possible failure to call, the worker may exercise the actions derived from such non-compliance, and the expiration period will begin from the moment in which the worker is aware that he is not has been called.
This type of contract must be held full-time unless the sectoral collective agreement establishes that it can be held part-time.
Finally, as far as this contractual modality is concerned, the people subject to this contract have the right to have their compensation calculated taking into account the entire duration of the employment relationship and not only the services actually provided, always responding to criteria of objectivity, proportionality and transparency, which will generate many doubts in the calculation of compensation.
Modification of training contracts (article 11 ET)
We can distinguish two types of training contracts.
Alternation training contract:
They seek to make paid work for others compatible with professional training processes, university studies, etc., taking into account the following characteristics:
- Minimum duration of 3 months and maximum of 2 years, in the event that the contract had been entered into for a duration less than the maximum and the degree had not been obtained, it may be extended until the corresponding degree is obtained without exceeding the maximum duration.
- Effective working time may not exceed 65% during the first year or 85% during the second.
- No additional or overtime hours may be worked.
- A trial period cannot be set for this type of contract.
Training contract to obtain professional practice appropriate to the level of studies:
It may be arranged with those who are in possession of a title within three years of obtaining it, it will have the following characteristics:
- Minimum duration of 6 months and maximum of 1 year.
- Trial period 1 month maximum.
- Prohibition of working overtime, except as provided in article 35.3 ET.
Social Security contribution (art. 151 General Law of Social Security -LGSS-)
The aforementioned article is modified, in the sense that fixed-term contracts of less than 30 days will have an additional contribution paid by the employer at the end of the same.
The rule establishes that said additional contribution will be calculated by multiplying by three the amount resulting from applying to the minimum daily contribution base of group 8 of the General Social Security Regime for common contingencies , the general rate of contribution paid by the company to cover common contingencies.
The law establishes some exceptions to this surcharge, as in the case of those entered into with workers included in the Special System for Agricultural Workers; in the Special System for Domestic Employees; in the Special Regime for Coal Mining or substitution contracts.
Penalties for temporary hiring
Another novelty introduced by the recent Labor Reform is the modification in the Law on Infractions and Sanctions in the Social Order (LISOS) establishing that when an infraction in the matter of temporary contracting, a penalty will be applied for each of the fraudulent contracts entered into. The fines that will be imposed for said infractions will range between 1,000 and 10,000 euros.
Transitional regime after the Labor Reform
As we have explained, the matter of temporary hiring entered into force three months after its publication, specifically on March 31, 2022. Until that date, a regime has been applied transitory so that companies could adapt to the new regulation and could continue with the previous legislation in two situations:
- Fixed-term contracts (including training contracts) entered into before December 31, 2021: they may be extended up to their maximum duration, as is the case with training contracts.
- Fixed-term contracts entered into after December 31, 2021 and up to March 30, 2022: they will have a maximum duration of six months from their signing.
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