Tuesday, February 27

Day 1 of the labor reform: the changes that begin on December 30

After tough negotiations between the Government, the employers and the unions, the new labor reform, demanded of Spain by Brussels, enters into force on December 30.

The Government intends “to turn the page to job insecurity, break with junk contracts and improve the quality of work, which will have an impact on the improvement of public pensions,” says the Second Vice President of the Government and Minister of Labor and Social Economy. Yolanda Diaz.

The changes introduced by the rule are “insufficient”, according to the experts. But “they will change the labor market with the implementation of new measures and the reform of some of the existing ones.”

Among them are the promotion of collective bargaining, the promotion of the permanent contract, the improvement of ERTE and the disappearance of the contract for work or service.

Collective bargaining regains its role

One of the main changes of the new reform is that undefined ultra-activity is recovered. In other words, the conditions established in a collective agreement will remain in force after its validity ends.

In addition, the salary prevalence of the company agreement, established with the 2012 labor reform, is repealed, thus avoiding downward agreements “that break the salary floor of the sectoral agreements and, therefore, the salary devaluation that the model makes possible until now in force ”, they point out from the Government.

Goodbye to the contract for works and services

The new legal framework establishes that the ordinary contract is indefinite and eliminates the contract for work or service, reducing the contracting modalities available until now.

There will only be a fixed-term contract, which may be carried out due to production circumstances or by substitution of the worker. To establish it, the causes that lead to the temporary hiring must be specified.

The contracts of duration determined by circumstances of the production contemplate “occasional, foreseeable situations and of reduced and delimited duration”, indicates the norm. They can be used during 90 days and never continuously.

While the replacement of the worker may be applied in cases of suspension of the contract with reservation of a job, to cover the reduced working hours for legal or conventional reasons and to cover vacancies during a selection process.

Regarding the fixed discontinuous contract, it must be concluded for work of a seasonal nature or seasonal productive activities.

New fines to avoid fraud

Employers who comment on contractual irregularities with a worker, and are discovered, will be forced to make an indefinite contract to the injured employee, who will automatically become part of the staff as a permanent worker.

In addition, sanctions and infractions against companies increase to a maximum of 10,000 euros for each worker affected.

Applicable collective agreements

A fundamental change with respect to the 2012 labor reform is that there will always be a sectoral collective agreement applicable to workers. With this measure, the Government intends to “fill legal gaps that exist so far.”

This agreement can be that of the activity carried out in the main company or another if so determined by the sectoral collective bargaining within its general rules.

Regarding the company agreement, it can only be applied if it establishes better salary conditions than the sector one.

Training contracts

As of December 30, the training contract will also change, which will have two modalities: alternating training and obtaining professional practice.

In the first case, the objective of the contract is to acquire the appropriate professional competence that corresponds to a certain level of studies.

They may be arranged with people of any age except in the case of the Professional Qualifications Catalog, which has a limit of up to 30 years, and will have a maximum duration of two years.

Working hours may not exceed 65 percent of the total in the first year or 85 percent in the second, and overtime, shift work or night hours may not be performed.

The remuneration will be adapted to the agreement and will never be less than the minimum wage proportional to the working day.

Punishment of very short-term contracts

In the area of ​​hiring, the new labor reform has redesigned the current disincentives that penalize excessive turnover in very short-term contracts.

Thus, temporary contracts of less than 30 days will have an additional Social Security contribution of 26 euros when they are canceled.

This contribution will not apply to the special regimes for agricultural workers, domestic workers, coal mining, and neither to substitution contracts.

Greater internal flexibility

The reform includes the implementation of new mechanisms to promote internal flexibility in companies with the aim of promoting stable employment and avoiding layoffs.

According to the Government, this measure “benefits both workers and companies.”

To do this, the current ERTE model will be reviewed and the RED mechanism will be created.

New cause of ERTE

Regarding ERTE, the impediment or limitations to the activity produced by decisions of the governmental authority are added as a specific cause.

Both for ERTE ETOP (for economic, technical, organizational or production reasons) and for ERTE of force majeure, new features are incorporated such as:

  • The possibility of affecting or disaffecting workers depending on the activity of the company, increasing the flexibility of these instruments;
  • The possibility of obtaining discounts on social contributions and financing if they carry out training activities for workers in ERTE;
  • and exemptions in Social Security contributions.

In the case of ERTE ETOPs, the bonuses will be 20 percent, conditional on taking training actions, and in the case of force majeure, 90 percent.

They will be linked to maintaining the employment of the current ERTE COVID and companies will see an increase in the credit available for training.

New RED flexibility and stabilization mechanism in employment

This new mechanism must be activated by the Council of Ministers and the reasons for using it will have to be justified. There will be two modalities: cyclical and sectorial.

The first will provide companies “a stable framework in the face of a transitory or cyclical drop in demand due to macroeconomic causes,” the rule indicates.

Companies may suspend part of their workers for a maximum period of one year instead of firing them. During this period, the training of workers will be encouraged and exemptions will be established in Social Security contributions.

In the sectoral modality, the most representative trade union and business organizations may request the convocation of the Tripartite Commission of the RED Mechanism.

Companies may activate this mechanism for a maximum period of one year and facilitate the transfer of their workers to another company through their requalification.

To facilitate this transition, the destination company will receive a 50 percent bonus for six months.