Looking Ahead 2024: Spain
Spain: Key Issues
- Normative uncertainty given the change in government to a coalition model
- Brand new laws are being introduced almost every quarter
- Very intensive reforms were undertaken in the last weeks of 2023
- New measures destined to increase responsibility for companies in litigation
- Progressively more lenient leaves of absence
- Overall harsher environment for companies
After pandemic years, Spain’s legal environment has rapidly shifted, with multiple Royal Decrees and laws aiming to palliate the recession effects and improve the already strong employment rights of employees.
This trend is likely to continue during the current year, with Congress sanctioning new leaves, increasing the existing ones, and making dismissals and disciplinary action more restrictive. Regarding Social Security, it is likely that contributions will keep increasing in an effort to make the Spanish Social Security expenditures more sustainable in the long term.
All in all, 2024 is already shaping up to be a challenging year for companies in Spain with its strict yet ever-changing regulations. As an example of this, the last 2 weeks of December saw the publication of 3 major Decrees that will be enforced in 2024.
Paid leaves and parental leave
By the end of 2023, new and more generous paid leaves were introduced to support employees who had to take care of sick relatives or had parenting duties. However, some of these measures will not be enforced until 2024, with special mention to Royal Law/Decree 7/2023, which was published at the end of December 2023.
- One of the main aspects of this Royal Law/Decree is that “Breastfeeding leave” has been renamed to “Leave for care of lactating children.” Along with this new name, it has also been extended until the age of 9 months, effectively duplicating its length. Additionally, it was foreseen before that only one of the parents can avail the leave at the same time, from now on, both parents can take the leave simultaneously.
- During 2023, the leaves for childcare, care of sick relatives, and family-related emergencies were approved, but they have not been properly implemented yet, which makes it likely that 2024 will be the year when we will finally know the requisites to ask for and grant these leaves.
- Additionally, some new permits are being discussed by Congress and the Senate, which will likely conclude in new Laws and Royal Decrees such as a paid leave for the suicide prevention of relatives.
- The Government of Spain has also compromised to extend parental leave in 2024 from 16 weeks to 20 weeks for each parent.
Social Security and salary costs
During the last week of 2023, Royal Law/Decree 8 of 2023 saw its publication, announcing measures aimed at fighting the ongoing economic recession and high inflation. Some of the measures were aimed at supporting the Spanish pension system, given the inequality that exists between pensions for male and female contributors. However, as a result of these adjustments, salary costs and contributions will be raised going forward:
- The minimum interprofessional salary (SMI) will be raised without the input of company representatives. This raise will be from the 1,080 monthly euros it is today to 1,134 monthly. On a yearly basis, the raise will be from 15,120€ minimum to 15,876€.
- Contribution costs have been raised by 0.08% for companies and by 0.02% for employees to make the pension system more sustainable.
- Companies will still have to pay contributions for trainees, but this requisite will also be extended to trainees who are carrying out unpaid curricular/extracurricular practices. It is noted that these contributions will both be flat and also be increased later this year.
- The maximum part of the salary which is subject to Social Security deductions has been increased to 4720.50€, which will result in higher Social Security costs for those employees with higher salaries.
Collective negotiation and Bargaining Agreements
Collective Bargaining Agreements are one of the more unique aspects of Spanish Employment legislation: sectorial laws that regulate the employment conditions for a given sector, geography, or even within individual companies. Up until the last legal change during the last week of December, companies can choose their Collective Bargaining Agreement from all of the available ones that are compatible with their activity.
This meant that, even if there was a more beneficial Bargaining Agreement that could be applied in a given province, a company could choose to employ the state Collective Bargaining Agreement instead, as it would likely offer lesser conditions and be cheaper (lower salaries, less holidays, leaves, etc.).
This is no longer the case as the Workers’ Statute has been amended to make it so the provincial Bargaining Agreements have priority to be used when they have better conditions than those of the state-wide Bargaining Agreements.
Publication of Royal Law/Decree 6/2023 additionally took place during the last part of December 2023, introducing several measures to make the employment jurisdiction more accessible for employees and more punishing for companies, which are now subject to more formalities and requirements in order to defend their positions. Not all is inconvenient, however, as now more cases that would have to be substantiated separately will be cumulative within the same court procedures. These measures will be enforced starting on the 20th of March 2024.
- Employees now have the option to include in their claims for dismissal other amounts that are a product of the employment relationship and are already quantified. This can already be done, but in most situations, these amounts can be claimed through a separate procedure than the one for dismissal.
- In general, claims stemming from the same defendant and with the same object will be cumulative by default, unless they may be detrimental to the interests of the offended party. To this end, a new procedure denominated “Witness Procedure” has been enabled to allow these cases to be resolved faster.
- This procedure will be substantiated during the first of the court procedures that stem from the same object, and it will suspend other posterior procedures so the first ruling can be in force before potentially identical cases reach the court.
- After the ruling, the claimants can decide whether they will keep litigating or whether they will join in the first ruling to benefit from its effects.
- Companies are now expected to appoint a lawyer or manifest their intention to use a lawyer within 2 work days of the reception of court summons. Otherwise, it is understood that they will represent themselves.
- If companies attend a conciliation/arbitration procedure without a lawyer, they must facilitate their contact data with the chamber and other parties in order to be notified of future actions.
- If companies do not attend the conciliation procedure without proper justification or act in bad faith during the conciliation procedure, they can be fined, and if the final ruling is identical to the claim of the employee, the defendant may be obliged to compensate the claimant for their lawyer expenses.
Apart from these measures, and in order to modernize the court system, the intention to facilitate telematic and online justice is manifested. The implementation of these measures, however, will depend heavily on the courts and chambers themselves and the Spanish provinces.
At the present time, most courts will not allow for telematic procedures, and most conciliation chambers do not allow for online procedures, which often makes for very expensive procedures due to travel needs.
Sustainable mobility plans
These plans have been operating in the public sector for a while now, but sources are confirming that in 2024, they will be expected from companies that employ more than 250 workers.
Despite the lack of a legal text regulating it, sources point out that these plans will work in a similar fashion to Equality Plans in that they need to be negotiated with union representatives.
Regarding their content, they must incentivize means of transportation that are more sustainable and/or healthy than travelling by car to the office. Options are (in order of priority):
- Active mobility (walking, running, or cycling)
- Collective and public transportation
- Remote work
- Low emission vehicles
Other important aspects of these plans will be road safety for employees and external collaborators, the eases of implementation in the town/city where the workplace is located, and measures to compensate for the carbon footprint of companies.
Although we still lack the final legal text that determines the extent of these measures and their entry into force, bigger companies should be ready to start the process to implement them soon and inform their union representatives.
Finishing thoughts going forward
If 2024 follows the trends set during 2023, we can expect more changes to make employment regulations more advantageous for workers who are affected by personal circumstances and family duties. All in all, employment conditions keep improving for workers, which added to the quality of living and greater ease for EU citizens to immigrate to Spain since it is one of the more appealing countries for digital nomads. Highly qualified employees are looking to work abroad.
However, companies are faced with a harsher environment to compete in, having to assume longer paid leaves, higher salaries and social security costs, and more demanding litigation processes.
This does not take into account the normative uncertainty and the rapid legal shifts that take place almost every quarter, with measures that are often not developed enough to be applicable in practice, which derive from months of contradictory court rulings.
We have lived through this situation with the new parental permits and with the additional severance compensation for short-lived employment relationships with unfair dismissals, but new challenges are sure to arise.
Employment lawyers and firms should be adaptable, well-researched, and ready to litigate in harsher conditions. While companies need to be aware of the importance of being prepared before undertaking measures that affect employment conditions and fulfilling all normative requirements to avoid unfavorable rulings and possible fines. But perhaps the most important challenge in 2024 will be being able to keep up with the ongoing legislative changes and continuous law production.