The employment contract in Spain

General Aspects

Definition – Employment contract means the contract by which one individual (employee) assumes the obligation to execute a work or to provide a service to one or several persons (employer), under the dependence of those persons, in return for remuneration in any kind or form.

Dependency and otherness are essential elements of the contract.

Minimum age – The minimum age to enter into a labor contract is the age of sixteen. For the employees under the age of eighteen there exist special rules depending on the work type of works, the working hours and benefits surcharges.

Types of contracts

Verbal or written

Both types are valid but written contracts are recommended.

Time

The contract could be for a full-time workday or part-time workday. The workday duration will be agreed through the collective bargaining agreements; if not agreed through the collective bargaining agreements, the maximum will be 40 hours per week.

Term

The contract could be permanent (indefinite) or temporary (valid for a pre-determined time period). Unless indicated otherwise, a contract shall be presumed as permanent and for full-time workday.

Types:

1. Permanent contract – The permanent contract is the one who is concluded with no limits in the provision of services. It must be announced in the Employment Service Office within ten days following its execution. The condition of permanent employee will be acquired, whatever modality of contract has been executed, by the employees who have not been registered in the Social Security once the trial period has expired.
2. Temporary contract – The temporary contract is the contract executed to be valid for a fix term and can be a full-time or part-time workday contract. The temporary contract shall be made in writing, but it can be verbal in the case of casual contract due to production overload if the term of the same is less than four weeks and full-time workday.
3. specific project or service contract – This type of contract is intended for the completion of works or services with autonomy inside the normal activity of the company and its duration , limited in time, is initially uncertain, but never for more than three years. The collective bargaining agreements are able to identify those works or task with own autonomy within the normal activity of the company that can be performed with contracts of this nature. The contract for a specific project or service can be done through full-time or part-time contracts. And the term will be the term of the realization of the work or service. The contract shall be made in writing and should specify with detail and clearly the type of hiring and identify sufficiently the work or service which constitute its object, the term, and also the work that is going to be developed.
4. Temporary contract depending on production circumstances – This contract is concluded to attend to the circumstantial requirements of the market, amount of task/works or excess of orders, even if is it is the normal activity of the company. It can be executed for a first professional experience, first youth employment, for an unemployed person who is under thirty years with no professional experience or less than three months. It could be concluded for a full-time or part-time workday. In case of youth employment the minimum of the part-time workday has to be the 75% of the workday from a full-time employee. The maximum term of this type of contracts will be six months inside a period of twelve months. And in case of first youth employment the minimum will be three months. These contracts must be concluded by writing if the duration exceeds four weeks and always in the event of part-time contracts. The contract must specify the reasons which justify it, the duration and the work to be done. The temporary contract depending on production circumstances will be extinguished, following denounce by any of the Parties at the expiry of the agreed period.
5. Provisional contracts – The aim of this contract is to substitute employees with a reserved right to their job, or to temporarily cover a work place during the selection process of a permanent candidate. The working time must be full-time. The term of this contract will be equal to the term of the absence of the employee with reserved right of his work place. And if the contract is caused by a selection process of a permanent candidate it has to be for the same time of that period, but never more than three months. The contract must be concluded in writing, specifying with precision and clearness the nature of the hiring, identifying the substitute employee and the cause of the substitution and, where appropriate, the work place whose coverage will be done after the selection process, and also specify the circumstance which determinates its duration, the term of the contract and the work to be performed. This contract will be extinguished, following denounce by any of the Parties, if any of the following circumstances occurs:
   • The return of the replaced employee;
   • Expiry of the legal period or expiry of the period conventionally established for the reintegration;
   • The extinction of the cause which brought the reserved right of the work place;
   • The fulfilment of the three month period for the selection process.
6. Compensation in case of expiration of the temporary contracts – The compensation established in the Law, in case of expiration of the temporary contracts will be implemented gradually according to the following timetable:
   • Nine days of salary per worked year for the temporary contracts celebrated after the 1st of January of 2012;
   • Ten days of salary per worked year for the temporary contracts celebrated after the 1st of January of 2013;
   • Eleven days of salary per worked year for the temporary contracts celebrated after the 1st of January of 2014;
   • Twelve days of salary per worked year for the temporary contracts celebrated after the 1st of January of 2015.
7. Apprenticeship and training contract – The aim of this contract is the professional qualification of the employees through a training and professional activity. This contract can be executed with employees over 16 years old and under 25, who do not yet have the required professional qualification for an internship contract. The previous age restriction shall not apply if the contract is executed with disabled people and those social groups that are at risk of exclusion. Once the duration of this type of contract has expired, the employee may not be hired under this modality of contract by the same or other company, unless if the inherent training of the new contract has the purpose to obtain a different professional qualification. The effective working time cannot be over 75%, during the first year, or the 85%, during the second and third year, of the maximum working day established in the collective bargaining agreement. The remuneration of the employee hired for the apprenticeship and training shall be established in proportion to the effective working time, set forth through the collective bargaining agreement.
8. Internship contract – The internship contract shall be concluded with those who are in possession of a university degree or technical education degree in the next five years, or seven for a disabled employee, from the finishing date of the studies according to the following rules:

• The workplace shall allow the obtaining of the professional practice suitable with the study or formation level completed.
• The term of the contract cannot be less than six month and more than two years.
• No employee could be hired in the same or different company for more time than two years under the same degree or professional certificate.
• The remuneration of the employee shall be the remuneration which is agreed in the collective bargaining, which must not, however, be less than the 60% or the 75% during the first or the second year of the contract.

If at the end of this contract the employee continues in the company, it is not possible to state a new probationary period. In this sense, the total duration of the internship contract must be computed to the effects of the seniority in the company.

1. Distance work – Through this type of contract the provision of the professional activity is mainly executed in the residence of the employee or in a place freely chosen by the employee, alternatively to the on-site development in the working place of the company. The agreement shall be formalized in writing. The distance employees will have the same rights that the employees who work in the work place of the company.

Salary and wage

Salary shall include all l kind of considerations received by the employees in money or in kind.

The in-kind salary may not exceed 30 per cent of all of the considerations received by the employee.

The national minimum wage is established by the Government each year, and for 2015 it is € 9.080 per year (€ 648.60 per month). The employee has the right to receive two extraordinary payments, one in Christmas and the other at the time to be negotiated with the company. The minimum salary includes these two extra wages.

Working time

The maximum working hours are those agreed in the collective bargaining agreements, but in general, the maximum is 40 hours per week. Between the end of one working day and the beginning of the next working day must mediate twelve hours.

The time worked in excess over the 40 hours per week will be considered overtime. The amount of overtime may not exceed 80 hours per year. Overtime will be voluntary in general.

Night work

The Statute of Employees considers as night work the work realized between 10 pm and 6 am. The employer who resorts regularly to this kind of work has to inform to the labor authority.

Weekly rest, holiday

The employees have the right for a weekly rest period of one day and a half, this time has to be uninterrupted, and as a general rule it shall include the Saturday evening or Monday morning and the whole Sunday.

The bank holidays cannot exceed the number of fourteen days per year including local holidays.

The employee, with prior notice and justification, may be absent from the work, with the right of remuneration, under the reasons established in the Statute of Employees, for e.g.: marriage, birth of a child, change of domicile.

The annual period of paid holidays will be, at least, 30 calendar days.

Special labour relationships for senior management personnel

The employees who are empowered to represent the company and in connection with the general objectives of the same, with autonomy and full responsibility are considered as senior management personnel.

The special relationship of the senior management personnel is based on the mutual confidence of the Parties.

The contract shall be made in writing and shall contain as a minimum:

• Identification of the Parties.
• The purpose of the contract.
• The agreed compensation, specifying, if it is the case, the amount in money or in in kind.
• The term of the contract.

This contract may be entered into for a trial period, but for not more than nine months. If the trial period has expired with no abandonment, the contract will produce full effect.

The Parties are free to agree the term of the contract but if they do not agree a specific term it shall be deemed as an indefinite contract.

The employee cannot conclude other contracts with other companies, unless expressly authorization of the employer.

The non- competition clauses, which cannot be for more than two years, shall be valid only if they comply with the requirements set forth at the RD 1382/1985.

• Termination by decision of the senior executive.
• The contract shall cease by the will of the senior executive, with an advance notice of three months.
• Termination by decision of the Company.

The senior executive can be ceased with the right to obtain the agreed indemnities, and in the lack of agreement with the amount set out in RD 1382/1985 (seven days of salary in cash per worked year, with the limit of six months’ salary.

The Company must serve a minimum advanced notice of three months. In case of non-compliance with the advance notification, the senior executive shall have the right for a compensation equivalent to the salaries that he will not obtain during that period.

In the event of disciplinary dismissal, (provided that it is qualified as unfair by Court), the indemnity amount will be the figure agreed through the contract, or if not agreed the equivalent to twenty days of salary per worked year, with the limit of twelve months salary.