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Labour Rules In Spain

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Labour Rules In Spain

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Types of contract

There are numerous types of contracts in Spain, but all are ranked based on three criteria:

        a) Standard or special contracts

        b) Permanent or temporary contracts

        c) Contracts with or without social security (SS) rebates

By default,contracts are standard, permanent and without any SS rebate.;

a)Special contracts

For various reasons there are special contracts:

  • Trainee
  • Part-time
  • Permanent, but discontinuous
  • Substitution of an older employee
  • Etc.

b)Fixed-term contracts

There are temporary or fixed-term contracts:

  • Eventual because of production circumstances
  • To cover a specific task or service
  • To replace temporary redundancies
  • Temporary contracts cannot exceed 24 months.

c)Subsidized contracts

Some contracts are subsidized based on certain circumstances provided by law. That means that they imply a lower contribution to the Social Security or that they are fully exempt from such payment.

Nowadays the most popular subsidized contracts are:

  • Contract to support entrepreneurs
  • Contract to support unemployed people over 52 years old

Trial period

The normal trial period, must be stated in paper and cannot exceed three months by law in permanent contracts. In companies with more than 25 employees the maximum is 2 months.

For qualified employees (“técnicos titulados”)the trial period could be extended up to 6 months.

In any case, collective labour agreements (“convenios colectivos”) may determine a different specific trial period, depending on the professional category.

But if a "contract for entrepreneurs",which has special characteristics, is signed, the trial period may be, de facto, up to one year.

Work schedule and working hours

The normal working week cannot exceed 40 hours.

The working day is limited to 9 hours, with a minimum of 12 hours rest between working days.

Overtime is limited by law to 80 hours per year. And they can be paid in cash or vacation.

There are 12 national holidays and 2 local (the town where is the workplace).

Annual paid vacation are 30 calendar days.

Collective agreements (and industrial agreements) may modify any of the points above.

Salaries

Salary is paid monthly, within the last few days of the month, usually between the 25th and the last day of the month.

The salary is usually set in annual gross amount (before any deductions of taxes and SS cost to the employee). It is not recommended to set the salary as a net amount cashed by the employee. Net salary is only around 75% of the payroll cost to the company.

The annual salary is usually divided into 12 or 14 payslips, but it could be agreed a different number of instalments, provided they are at least 12. If they were more than 12, some months the payslip would be double or triple.

Many companies pay double salary for the months of June (summer/holidays) and December (Christmas). This requires dividing the gross annual salary in 14 payments.

The majority of new companies avoid the 14 payments and do only 12 monthly payments.

Deductions from salary

The company is required to deduct from the salary of its employees theirpersonal contributions to the Social Security and their withholding taxes.

The Social Security contributioncorresponding to the employees is 6.4% of their gross salary.

Withholding taxes are a percentage of the gross annual salary and depend on the amount of the salary. The minimum is 0%, for very low gross salaries, and the maximum is 52%, for salaries over €300,000.

Minimum salary

A general minimum salary is establishedevery year. Currently is €641,40 per month (€8.979,60 per year).

Usually the collective agreements establish a higher minimumsalary by professional category.

Dismissal

Dismissal for disciplinary reasons

The company can fire an employee for a number of valid reasons provided by law, following a process in which it is advisable to be assisted by an expert.

The most common causes of disciplinary dismissal are:

  • Lack of punctuality
  • Unjustified absenteeism
  • Consume of alcohol or drugs
  • Lack of discipline
  • Verbal or physical abuse
  • Fraud and scam
  • Breach of trust

When these circumstances occur,the company can dismiss an employee without being required to pay him or her any compensation.

Dismissal for economic reasons

If the company has financial difficulties and can demonstrate that it has entered into ​​losses in the last three quarters, it can fire employees that are redundant with a compensation of only 20 days per year of seniority with a maximum of 12 months.

These dismissals must be processed along with a reasoned economic report justifying the measure.

If the company fires 5 or more employees simultaneously, it shall submit a Labour Force Adjustment Plan (ERE as per its Spanish acronym) before the labour authorities.

Dismissal without just cause

The company can fire any employee without justification compensating him/her r he/she is compensated with 33 days of salary per year worked, with a maximum of 24 months of salary.

Employees hired before theLabourReform will have a count of 45 days per year worked prior to the entry into force of the reform (11 February 2012).

Causes of temporary absence or leaves

Illness or accident

If the employee is absent due to illness or accident, it must be justified, and a portion of the employee's salary will be paid by Social Security to the company.

The system is complex and needs to be explained and managed by an expert.

Family obligations

There are certain cases in which the employee is entitled to leave the job with paid leave at 100%, which should be justify.

Are cases like family disease or death.

Maternity/paternity

An employee who becomesmother is entitled to a maternity leave of 16 weeks from the childbirth day. Her salary is paid in full by the Social Security,directly to the employee.

Fathers are entitled to a paid leave of 15 days, of which 13 are paid in full by the Social Security directly to the employee.

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