Already published in the Official State Gazette, the new Royal Decree-Law will develop changes in temporary contracts, subcontracting, ERTEs, collective bargaining and training contracts.
Click here to download a Labour Ministry press release (Spanish version).
We highlight the following aspects of the new regulation:
The contract for work or service disappears. Contracts are presumed to be for an indefinite period and, therefore, the types of contracts available are reduced.
The causes of temporary contracts are unified in two cases:
- Due to circumstances of production: this is due to productive causes, or It has a maximum duration of 6 months, extendable to 1 year if so established in the sectoral agreement, or If the contract is due to foreseeable production circumstances, the maximum duration of the contract is 90 days in the calendar year.
- By substitution: this is due to causes of substitution of the worker. This cause responds to a need for internal coverage of the company. The duration may not exceed 3 months (non-renewable). A shorter period may be fixed if the collective agreement so stipulates. This fixed-term contract is used to replace people during a suspension of the contract with job reservation, to cover the reduced working hours due to legal or conventional reasons, as well as to cover vacancies during a selection process.
Therefore, the fixed-term employment contract may only be concluded due to circumstances of production or for the replacement of a worker.
Prevalence of the permanent contract generally. The indefinite-term contract will be the ordinary contract. Six months, extendable to one year. Reduction in the chaining of contracts to consider a person as permanent: from 24 to 18 months.
A fixed-amount penalty is introduced for each leave on a temporary contract, so that the penalty that has existed until now, which was linear, is replaced by one that introduces a greater disincentive the shorter the contracts are. Temporary contracts of less than 30 days will have an additional Social Security contribution of 26 euros when they are terminated. This also means an increasing penalty (the shorter contracts, the greater the disincentive: with a short contract of 10 days, the penalty would be 26 euros; if the same working time were covered by two five-day contracts, 52 euros…).
Exceptionally, this contribution will not be applied to the special regimes for agricultural workers, domestic workers, coal mining workers, nor to substitution contracts.
Discontinuous fixed-term contracts will be promoted for seasonal work or seasonal productive activities, as well as those which are not of this nature but which, being intermittent, have certain, determined, or indeterminate periods of performance.
Workers subject to this type of contract shall be a preferential group for training actions. Sectoral agreements may establish employment exchanges to favour their recruitment and to improve their training during periods of inactivity.
Special case: In the construction sector, ordinary contracts will also be open-ended contracts. After the end of the work, the company must offer a relocation proposal to the worker, subject to the development, if necessary, of a training process at the company’s expense. If the worker rejects the offer or for reasons inherent to the offer that make relocation impossible because there is no suitable position, the contract is terminated, with compensation of 7% calculated on the salary concepts established in the collective bargaining agreement tables. Both the end of the work and the termination must be communicated to the legal representatives of the workers.
Prevalence of the sectoral agreement except in the regulation of wages. It is maintained that wages may not be lower than those established in the sectoral agreement, referring both to the amount of the basic wage and the wage supplements, including those linked to the company’s situation and results, where the higher-level agreement prevails.
Indefinite ultra-activity, the agreement remains in force until a new one is signed, even after its express validity has expired
If after one year of its denunciation without agreement, i.e. after the negotiation process has elapsed without an agreement being reached, the collective agreement will remain in force.
Training. Two types of contracts: Training contract in alternating work and dual training contract.
Training contract alternating work and training. With the aim of acquiring the appropriate professional competence corresponding to a certain level of studies (vocational training, university, or catalogue of professional qualifications of the National Employment System).
They may be arranged with people of any age except in the case of the Catalogue of Professional Qualifications, with a limit of up to 30 years of age and will have a maximum duration of two years.
The working hours will be no more than 65% in the first year and 85% in the second year, with no overtime, shift work or night work. Remuneration will be adapted to the agreement and may not fall below 60% (the first year and 75% the second year). It will never be less than the minimum wage proportional to the working day.
A tutor with the appropriate training will oversee monitoring and ensuring compliance with the individual training plan designed for each person and the correct fulfilment of the contract.
Dual training contract is limited from 6 months to 12 months and will be allowed to be used only during the 3 years following the end of the studies.
The specific needs of people wiht disabilities are also considered.
Contracts for professional practice may be concluded up to a maximum of three (or five years in the case of persons with disabilities) after certification. They will last between six months and one year.
Both will be covered by the Social Security protective action, which will include the protectable contingencies and benefits, including unemployment and the coverage of the Wage Guarantee Fund.
Curricular or extracurricular internships will not be an employment relationship but will still be obliged to pay contributions.
Contracts and subcontracts must comply with the corresponding sector agreement according to the activity they carry out.
The sectoral collective bargaining agreement applicable to contracting companies will be that of the activity carried out unless there is another applicable sectoral agreement. The sectoral agreement of the activity carried out in the main company or another one may be applied if so, determined by the sectoral collective bargaining agreement within its general rules.
When the contractor or subcontractor company has its own agreement, this will be applied in the terms resulting from article 84 of the Workers’ Statute.
A special mechanism like the ERTE COVID-19, force majeure due to limitations and impediments, is included.
The RED Mechanism, these new ERTEs will be activated by the Council of Ministers and companies will be able to take advantage of them after consultation with the workers’ legal representatives and will be able to make collective applications through the SEPE’s electronic headquarters. They will have a maximum duration of 1 year (in the event of a crisis in the sector they will be extended to 2 years).
Unemployment. They will receive 70% of the regulatory base during the process (without grace period or unemployment consumption up to a maximum of 225% of the IPREM.
Social Security bonuses of between 20% and 90% linked to training.
Exemptions are established for ERTE, Force Majeure and ETOP linked to training and a commitment to maintain employment:
- 20% ERTE ETOP
- 90% ERTE Temporary Force Majeure
- 90% ERTE Impediment or Limitation.
There are two modalities:
1. Cyclical network mechanism:
It will provide companies with a stable framework in the face of a transitory or cyclical fall in demand due to macroeconomic causes, in order to avoid dismissals, companies will be able to suspend part of their workers for a maximum period of one year instead of dismissing them. During this period of suspension, incentives will be provided for the training of workers and the following exemptions from Social Security contributions are established:
- 60% in the first four months of activation.
- 30% in the immediately following four-month period
- 20% in the following four months
2. Sectoral network mechanism:
The most representative trade union and employers’ organizations may request the convening of the Tripartite Commission of the RED Mechanism to be accompanied by a retraining plan. This modality provides support for the re-qualification of workers in companies and sectors in transition that require permanent changes. The company can activate this mechanism for a maximum period of one year (six months, with the possibility of extending for a further six months) and facilitate the transfer of its workers to another company through their re-qualification. It has a 40% exemption (linked to training actions).
The company from which the workers leave must carry out an outplacement plan, including training activities that allow the workers to be relocated in another company, and pay the full amount equivalent to their wages for the first month in which the suspension or reduction of working hours is applied.
The indefinite (or permanent-discontinuous) hiring by the receiving company would produce a rebate of social security contributions for common contingencies during a certain period.
Outplacement must be accepted voluntarily by the worker.
The management of the RED Fund will be the responsibility of the SEPE and will be financed from the income from social security contributions for unemployment, from the contributions included in the General State Budget and from resources from European Union financing instruments.
The text of this Royal Decree-Law also fulfils the commitment made to the European Union in Component 23 and lays the foundations in labor matters for a fair and inclusive recovery within the Recovery, Transformation and Resilience Plan.
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