In the midst of the debate on temporary hiring in Spain, the Court of Justice of the EU (CJEU) has given a blow to the ‘fixed works’ contracts in the construction sector. It is a specific temporary construction contract, regulated in its collective agreement, by which contractual relationships are linked to the works. The magistrates have concluded this Thursday that the ‘fixed work’ contract does not prevent abuses in the temporality, as required by European legislation, by allowing successive contracts of this type to be chained “indefinitely”.
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The European magistrates analyze the ‘fixed works’ contracts for construction in Spain following a preliminary ruling from a Spanish court. The court consults several doubts about the case of a worker who chained six fixed contracts of work, between the years 1996 and 2017, with the company Obras y Servicios Públicos SA In 2017, the worker became dependent on Acciona Agua after being signed with the award of a public contract for Canal de Isabel II previously held by the company for which the affected party worked. His last ‘fixed work’ contract was extended for more years, after which the employee demanded his permanent status.
The CJEU considers that, without prejudice to the verifications that the Spanish courts must carry out, “it cannot be considered that article 24 of the controversial Collective Agreement” – the one that regulates the ‘fixed work contract’ – “allows justifying the use of successive fixed-term employment contracts “since” it “entails a real risk of causing an abusive use of this type of contract”.
The European judges point out that although in general this type of contract is limited to a single work, this “applies to each ‘fixed work contract’ considered separately” and “various contracts of this type can be concluded successively for different works” .
The conditions set out in the collective construction agreement for these contracts “allow the ‘fixed work’ contracts to be renewed indefinitely due to the accumulated effect of these successive contracts or the aggregation of these”, which in the opinion of the European court shows ” that said worker actually performs in a permanent and stable manner tasks that are part of the ordinary activity of the entity or company that employs him. ”
This is how the magistrates see it in the case tried by the Spanish court that raised the question for a preliminary ruling. “The situation in the main litigation perfectly illustrates this assessment, since the plaintiff has signed six successive ‘fixed’ contracts with Public Works and Services for a total duration exceeding 25 years”.
The CJEU also recalls that the Supreme Court has also limited the possibility of linking contracts as allowed by the collective agreement. “It has been applying temporary limits” to these ‘fixed work’ contracts typical of other temporary contracts according to section 5 of the Workers’ Statute, “so that, when a worker has signed two or more contracts of this type and has exceeded the legal time limit provided for in said provision, acquires the status of indefinite “, includes the sentence.
The magistrates therefore resolve that “national legislation, such as the one at issue in the main proceedings, which allows to meet needs that are not provisional, but, on the contrary, permanent and stable, is not justified” in European legislation, which requires the existence of measures to avoid the abusive use of temporary contracts.
Analyze whether compensation is sufficient preventive measure
The CJEU calls on the Spanish court to analyze whether there are “legal measures” to prevent this abuse of the ‘fixed work’ contracts that are being analyzed. The companies alleged the existence of severance pay for this type of ‘fixed work’ contract, which also regulates the collective agreement.
The European magistrates point out that, for this to function as a preventive measure in the terms required by EU regulations, “the granting of compensation must specifically aim to offset the effects of the abusive use of successive contracts or labor relations of determined duration “. Furthermore, compensation has to be not only proportionate, “but also effective and dissuasive enough to guarantee the full effectiveness of said clause.”
The court’s ruling reaches one of the sectors that most uses temporary contracts in Spain, a country that has a very high average rate of temporary employment, of 26.3% in 2019. Spain is in fact the country with the most weight of work EU temporary. In the case of construction, on average, 40% of its workers have temporary contracts. With a more detailed view, in the building construction sector the rate reaches more than half of its affiliates to Social Security, 55%.