Spain: New Provisions for Temporary Contracts

The Royal Decree Law 32/2021 of 28 December 2021 provides urgent measures regarding the employment reform, the assurance of employment stability and the transformation of the employment market. It is expected that the new rules will come into force on 30 March 2022.

Following the derogation of the labour reform, new criteria have been established, such as in the case of temporary contracts. In order to avoid the temporary nature of contracts, priority is given to indefinite contracts. The contract of Works and Services is removed from the law, and fixed-term contracts are now only allowed in the following cases:

1.1 Contracts for a specific period of time due to production circumstances

Within this case, two categories are established:

• Circumstances of production shall be understood as the occasional and unforeseeable increase and the fluctuations which, even though they are within the normal activity of the company, they generate a temporary mismatch between the stable and available employment and that which is needed. The maximum duration is of 6 months, which may be extended to 1 year if agreed by sectorial collective bargaining agreement.
• If the circumstances of production are occasional, foreseeable and have a reduced and delimited duration, this type of contract may be used, but with a maximum of 90 days in the calendar year, regardless of the number of workers required to attend to the specific situations on each of these days, which must be duly specified in the contract. These 90 days may not be used continuously.

1.2 Interim contract

A fixed-term contract may be entered into for the replacement of an employee in the following cases:

• For the replacement of a worker who is entitled to the reserve of the workplace, provided that the name of the person being replaced and the reason for the replacement are specified in the contract.
• To complete the reduced working day by another worker, when such reduction is covered by the legally established causes or regulated in the collective bargaining agreement and the name of the person being replaced and the cause of the replacement are specified in the contract.
• For the temporary coverage of a job position during the recruitment or promotion process for its definitive coverage by means of an indefinite contract, with a maximum duration of 3 months, or the shorter term established in the collective labour agreement. A new contract may not be entered into for the same purpose once the maximum duration has been exceeded.

Legal treatment of previously concluded temporary contracts

• Temporary contracts entered into before 31 December 2021: They will be governed until their maximum duration by the provisions established prior to the labour reform.
• Temporary contracts entered into after 31 December 2021 and before 30 March 2022: During this lapse of time, companies still have the possibility of hiring under the terms and conditions of the previous legislation (they may, for instance, sign a contract of works and services), but under the assumption that the maximum duration of any of these contracts will be six months.