LABOUR LEGISLATION IN SPAIN

Labour regulations

In the Canary Islands, the same requirements are met, both in terms of types of contract, collective agreements and minimum interprofessional wage as at national level. Likewise, the same social security contribution brackets apply per worker, both self-employed and employed. 

The main features are:

• 40-hour working week.
• 30 calendar days holiday per year.

The annual variation of the minimum wage is set by the Spanish Government: 

• Year 2022: 1,000 euros/month.

The Law that regulates labour relations in Spain and in the Canary Islands is Royal Legislative Decree 2/2015, of 23 October, which approves the revised text of the Law of the Workers' Statute. It is the main rule, which governs the rights of workers in the workplace. Spain.

In recent years, Spanish labour legislation has been adapted and modernised through legislative modifications that have made it more flexible in order to dynamise the labour market to promote employability and investment. Also, This legislation has included important advances in social rights and equal treatment and opportunities in the field of employment.

General aspects of Spanish labour law:

In general, discrimination is prohibited in hiring or in the workplace on the grounds of sex, marital status, age, race, social class, religion or political ideology, membership or not of a trade union, or on the basis of the different official languages of Spain. 

The minimum age of employment is 16 years and there are certain special rules applicable to the employment of children under the age of 18. (who, for example, are not allowed to work overtime or night work).

Recruitment modalities:

Contracts may be concluded in writing or verbally, except in cases where it is expressly stated that the written form of the contract is mandatory (e.g. temporary contracts, part-time contracts, training contracts).

If this formal requirement is not observed, the contract is deemed to be concluded for an indefinite period and on a full-time basis, unless proven otherwise. Companies must provide the workers' legal representatives (if any) with a basic copy of all contracts to be concluded in writing (except for senior managers).

Likewise, recruitment must be communicated to the public employment services within ten days of its conclusion. There are different types of contracts, including: permanent, temporary or fixed-term, training, distance or part-time.

On the website of the State Public Employment Service (Servicio Público de Empleo Estatal) a virtual employment contract assistant can be accessed which, based on four basic blocks of employment contracts (permanent, temporary, training and internship contracts), suggests and prepares the employment contract model that best adapts to the peculiarities of each contract.

Substantial changes in working conditions

Employers may substantially modify the working conditions of employees (working day, working hours, salary, functions, among others) provided that there are proven economic, technical, organisational or production reasons and that the legal procedure is respected (15 days' notice in the case of individual modifications or a consultation period with the workers' representatives in the case of collective modifications). 

In addition, there is a specific procedure for not applying working conditions established in the collective bargaining agreement in force (whether sector or company) when there are economic, technical, organisational or production causes. In the case of conditions established through collective bargaining, their non-application requires a period of consultation between the company and the workers' representatives, and the conditions can only be waived if an agreement is reached or if recourse is had to the procedures provided for by law (arbitration, for example, or through the National Consultative Commission on Collective Bargaining).

The agreement shall determine the new working conditions applicable in the undertaking and their duration, which may not extend beyond the time when a new agreement becomes applicable in that undertaking.

Termination of employment contracts:

Dismissals: 

An employment contract may be terminated for certain reasons that do not normally give rise to a dispute, such as mutual agreement, expiry of the contractual term, death or retirement of the employee or the employer, etc.

In the case of termination by the employer, there are three main cases of dismissal of the employee:

• Collective dismissal.
• Objective causes. 
• Disciplinary action.

Qualification of the dismissal:

A worker dismissed for any objective or disciplinary cause may appeal the company's action before the courts of the social order, although it is compulsory to first go to a conciliation procedure between the worker and the employer, in which an attempt must be made to reach an agreement. This act of conciliation takes place before an administrative body for mediation, arbitration and conciliation. 

Recruitment of senior managers:

There are special employment rules applicable to certain types of workers, including the special employment relationship of senior managers, regulated by Royal Decree 1382/1985 of 1 August 1985. 

A senior manager is an employee who has extensive administrative and management powers related to the overall objectives of the company, and who exercises his or her powers with autonomy and full accountability, answerable only to the highest governing and administrative body of the company. 

The working conditions of such executives are subject to fewer constraints than those of ordinary employees and, as a general rule, the parties (employer and senior manager) have a wide margin of manoeuvre in defining their contractual relationship. 

In relation to the termination of senior management contracts, the following provisions are established: 

• The contracts of senior managers may be terminated without cause, with a minimum of 3 months' notice, in which case they are entitled to a severance payment of seven days' salary in cash per year of service, with a maximum of 6 monthly payments, unless a different severance payment has been agreed. 
• Alternatively, a senior manager can be dismissed for any of the reasons stipulated in general employment regulations (objective causes or disciplinary action). If the dismissal is declared unfair, the senior official is entitled to 20 days' salary in cash per year of service, up to a maximum of 12 months' salary, unless other compensation has been agreed. 
• In addition, certain causes for termination of the contract by the manager are typified, entitling the senior manager to the agreed compensation and, failing this, to the compensation established for the termination of the contract due to the employer's withdrawal from the contract. 
• The senior manager may also freely withdraw from the contract, subject to a minimum of three months' notice. Although the statutory severance pay for senior managers is currently lower than that of ordinary employees, in practice senior management contracts often contain provisions for severance pay higher than the statutory minimum.

Contracting with Temporary Employment Agencies (ETT):

Under Spanish law, the hiring of workers for temporary assignment to another company (user company) can only be carried out through duly authorised temporary employment agencies (hereinafter, ETTs) and in the same cases in which temporary or fixed-term contracts can be signed, including internship contracts or contracts for training and apprenticeship. 

Thus, only in specific cases may workers be hired through temporary employment agencies, and this is expressly prohibited in the following cases: 

• To replace striking workers in the user company. 
• For the performance of activities and work determined by regulation in view of their special danger to safety or health (for example, work involving exposure to ionising radiation, carcinogenic, mutagenic or toxic agents for reproduction, biological agents, etc.).
• When in the twelve months immediately prior to the hiring, the company has eliminated the jobs to be filled due to unfair dismissal or due to the causes foreseen for the termination of the contract at the employee's will, collective dismissal or dismissal for objective reasons.
• To transfer workers to other ETTs. 

Workers recruited for secondment to user undertakings shall be entitled during their periods of service with the user undertakings to the application of the basic working and employment conditions (including remuneration, working hours, overtime, rest periods, night work, holidays and public holidays) to which they would have been entitled if they had been recruited directly by the user undertaking to fill the same post. 

Remuneration shall comprise all fixed or variable remuneration established for the post to be performed in the collective agreement applicable to the user undertaking and linked to that post. ETTs, in addition to temporarily assigning workers to other companies, can act as employment agencies when they meet the legally established requirements for this purpose.

Worker representation and collective bargaining

Workers are represented by trade unions. At company level, this representation is carried out by unitary representation (staff delegates or works councils, who may or may not belong to a trade union) and by trade union representation (trade union sections and trade union delegates who represent a trade union in the company). 

It is not mandatory for companies to have employee representation if the employees have not promoted trade union elections. However, if employees promote such representation, the company is obliged to allow union elections to be held and to appoint such representatives under the terms provided for by law. 

In general, the unitary and trade union representation has the function of receiving certain information set out in the TE in order to ensure compliance with labour regulations. They have the right to participate in bargaining prior to the implementation of collective procedures (e.g. substantial changes in working conditions, collective dismissals, etc.).

They are also entitled to the issuance of reports prior to total or partial transfers of facilities, mergers or any modification of the company's legal status, among others. 

In addition, trade unions (at the supra-employer level) or unitary or trade union representation may negotiate collective agreements with the employers' association (in the first case) or with the company (in the second case). Collective bargaining agreements are agreements signed between workers' and employers' representatives to regulate employment and working conditions, and are binding on the parties.

Relationships excluded from the labour sphere:

Self-employed: 

Although this is not strictly a labour matter, it is worth making a brief reference to Law 20/2007, of 11 July, on the Statute of Self-Employment, which includes the regulation of the figure of the Economically Dependent Self-Employed Worker. 

This figure defines self-employed persons (self-employed workers) who carry out an economic or professional activity for profit and on a regular, personal, direct and predominant basis for a natural or legal person, known as a client, on whom they are economically dependent because they receive at least 75% of their income from work and from economic or professional activities from the client. 

It also establishes certain requirements that must be met at the same time in order for them to be considered dependent self-employed workers. The aforementioned regulation establishes a specific regulation of the conditions for the provision of services by self-employed workers to their clients.

Non-working internships in the company: 

There are different cases in which a person can carry out an activity in a company without it being considered as an employment activity: 

• External academic internships for university students, which are defined as an activity of a training nature, carried out by university students and supervised by the universities, with the aim of allowing them to apply and complement the knowledge acquired in their academic training.
• Non-work placements in companies or business groups that formalise agreements with the Public Employment Services, aimed at young people (people between 18 and 25 years of age) who, due to their lack of work experience, have employability problems.

These traineeships may be undertaken by persons within the age range indicated who have not had an employment relationship and other professional experience of more than three months in the same activity, and may last between three and nine months.

The trainees will receive a support grant from the company, the amount of which will be at least 80% of the IPREM in force at any given time (currently the 8 Ratios excluded from IPREM per month is 564.90 €).

Acquisition of a business:

There are certain labour law provisions that are particularly relevant when acquiring or selling an active business in Spain. For example: if a business is transferred, both the seller and the buyer are jointly and severally liable for three years after the transfer for employment obligations arising prior to the transfer. 

When a company is transferred, the new employer is subrogated to the employment and social security rights and obligations of the selling employer, including pension commitments under the terms set out in its specific regulations and, in general, any obligations acquired by the seller in the area of complementary social protection. There is an obligation on the part of the selling and purchasing companies to inform the representatives of their respective employees in advance of certain aspects of the future transfer.

In particular, the content of the information shall be at least the following: 

• Planned date of transmission. 
• Reasons for transmission. 
• Legal, economic and social consequences for workers of the transfer.
• Measures envisaged for workers. 

In the absence of legal representation in the undertakings concerned, such information must be provided directly to the employees affected by the transfer. 

It also establishes the obligation to hold a consultation period with the workers' legal representatives when, as a result of the transfer, employment measures are adopted for the staff concerned. The consultation period shall cover the measures envisaged and their consequences for the employees and shall be held in good time before the measures are put into effect. 

In the event of a company succession or a major change in the ownership of the company resulting in a change in its governing bodies or in the content and focus of its core business, senior management staff shall be entitled to terminate their employment contract within three months of such changes and to receive compensation equivalent to seven days' salary in cash per year of service, up to a maximum of six months' salary, or such other compensation as may have been agreed upon.

Practical aspects of setting up a company in Spain for employment purposes:

From a labour and social security point of view, the following essential formalities must be carried out in order to open a company or work centre in Spain:

Temporary secondments or local recruitment:

In general, foreign workers who are temporarily posted to Spain may keep the employment contract signed in their country of origin.

Both Regulation 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I) and Article 10.6 of the Civil Code allow the parties to choose the applicable law, except in those matters not available under Spanish labour law. Law 45/1999 of 29 November 1999 stipulates that a number of minimum working conditions must be respected for certain temporary postings.

This regulation applies to postings made by employers from EU countries as well as from the European Economic Area (consisting of EU countries, Norway, Iceland and Liechtenstein) in the framework of a transnational provision of services, for a limited period of time, meaning the postings that have taken place: 

• Within the same company or within the group of companies. 
• Under contracts for the international provision of services. 
• By a temporary employment agency for the provision of workers to a user company in Spain. 

Exceptionally, it excludes from its scope of application the posting of workers during training periods and postings lasting less than eight days, except in the case of temporary agency workers. The minimum working conditions that such employers in the aforementioned countries must guarantee in accordance with Spanish labour legislation and, irrespective of the law applicable to the employment contract, refer to:

1. Working time.
2. Amount of salary (which shall be at least the salary provided for by law, regulation or collective agreement for the same post).
3. Equal treatment.
4. Child labour.
5. Prevention of occupational hazards.
6. Non-discrimination of temporary and part-time workers.
7. Respect for privacy, dignity and freedom of association.
8. Strike and assembly rights.

This is without prejudice to whether workers posted to Spain had more beneficial conditions recognised in their country of origin, in which case the same conditions would apply. It is also stipulated that these employers must notify the Spanish labour authority of the posting before the start of the service provision and regardless of its duration (except for postings of less than 8 days), designating a representative in Spain.

This communication must be made by the posting foreign company to the authority of the Autonomous Community where the posted employee is going to provide services3 (the creation of a central electronic register of communications is pending). The basic content of this communication is: the identification of the posting and receiving company, the identification of the worker, the starting date and the expected duration, and the identification of the specific case of posting. 

In addition, the following documentation translated into Spanish or the co-official language of the place where the posted person is based must be available at the work centre where the posted person provides services:

1. Employment contracts or essential elements of the contract.
2. Wage receipts and proof of payment to workers.
3. The time records that have been made, indicating the beginning, end and duration of the daily working day.
4. Authorisation to work for third-country nationals in accordance with the legislation of the State of establishment. 

Finally, employers are obliged to notify the Spanish labour authority of any damage to the health of posted workers arising out of or in connection with the work carried out in Spain. The regulations on offences and penalties in the social order typify a series of conducts related to this issue.

Thus, minor infringements include formal defects in the notification of the posting of workers to Spain or failure to report minor occupational accidents and occupational illnesses of posted employees. Whereas it is considered a serious offence to submit this notification after the start of the posting, not to have the aforementioned documents available during the posting, not to notify the labour authority of serious, very serious or fatal accidents of posted employees or not to comply with the Inspectorate's requirement to submit documentation or to submit a document without translating it. 

The absence of this communication, as well as the falsehood or concealment of the data contained therein, constitutes a very serious infringement. Likewise, administrative offences are considered to be those derived from non-compliance with the aforementioned minimum working conditions, which will be classified in accordance with the penalties applicable to Spanish employers. 

When the posting is not temporary, but the provision of services in Spain is intended to be permanent, the employer shall enter into an employment contract with the worker in accordance with Spanish law ("local hiring"). Foreign companies without an establishment in Spain may carry out local hiring without the need to incorporate a Spanish company. The foreign company, however, will have to follow the steps indicated in section 10 above, but referring to the foreign company. 

Applicable Social Security: 

EU Regulations 883/2004 and 987/2009 on the coordination of social security systems apply within the European Union, the European Economic Area and Switzerland. These Regulations ensure that workers to whom they apply are not adversely affected from a social security point of view by moving from one Member State to another.

There are also certain bilateral social security agreements between Spain and other countries that regulate the effects on Spanish public benefits of periods of social security contributions in other countries. It also determines the State in which contributions must be paid in the event of temporary or permanent posting and provision of services. 

The following bilateral agreements are currently in force:

Finally, Spain has a Multilateral Ibero-American Social Security Agreement in force, which is an instrument for coordinating the social security legislation on pensions of the different Ibero-American states that ratify it and also sign the Implementation Agreement (currently, in addition to Spain, Argentina, Bolivia, Brazil, Chile, Ecuador, El Salvador, Paraguay, Peru, Portugal and Uruguay have done so). 

Those posted to Spain who, by virtue of the corresponding Social Security Regulations or Agreements, continue to be subject to the regulations of their State of origin, and who can prove this by means of the corresponding certificate, will generally not be registered with the Spanish Social Security system during the period of validity provided for therein, in accordance with the terms set out in the corresponding Agreement.

When, on the other hand, a contract is made in Spain to work in Spain on a permanent basis, the general rule of registration with the Spanish Social Security system applies regardless of the nationality of the company acting as employer.

Visas and work and residence permits:

In this tip you will find information about visas and work permits in Spain.

Social Security

As a general rule, all employers, their employees, self-employed workers, members of production cooperatives, domestic employees, military personnel, civil servants residing and/or performing their duties in Spain, must register and are obliged to pay contributions to the Spanish Social Security System (except in specific cases of temporary posting of workers, as indicated in the applicable Social Security section). 

There are different social security contribution schemes in Spain:

General Social Security Scheme.

• There are other situations included in the General Regime, but with special treatment. These are: 

• • Artists. 
  • Railway workers. 
  • Trade representatives. 
  • Bullfighting professionals. 
  • Professional football players and other professional sportsmen and women. 
  • Agricultural employees. 
  • Domestic workers.

• Special Social Security schemes for: 

• • Sea workers. 
  • Self-employed or self-employed workers. 
  • Civil servants, civilian and military. 
  • Coal mining workers.
  • Students. 

The classification within these systems depends on the nature, conditions and characteristics of the activities carried out in Spain. 

Equality in the company:

Companies are obliged to respect equal treatment and equal opportunities in the workplace and must therefore adopt measures to avoid any kind of discrimination between women and men in the workplace. 

• Companies with 50 or more employees must draw up and implement an equality plan, with the scope and content established by law, which must be subject to negotiation with the workers' legal representatives. 
• Companies with 50 to 100 employees have until March 2022 to approve equality plans. 
• Companies with more than 100 employees must already have such a plan. Equality plans must contain an ordered set of assessable measures aimed at removing obstacles that prevent or hinder the effective equality of women and men. 

Before drawing up the plan, a diagnosis must be drawn up, negotiated, if necessary, with the legal representation of the workers, which will contain at least the following matters: 

1. Selection and recruitment process. 
2. Professional classification. 
3. Training. 
4. Professional promotion. 
5. Working conditions, including gender pay audit. 
6. Co-responsible exercise of the rights of personal, family and working life. 
7. Under-representation of women. 
8. Remuneration. 
9. Prevention of sexual and gender-based harassment. 

In addition, companies must keep a record of the average values of wages, salary supplements and non-wage payments, disaggregated by sex, occupational groups, occupational categories or positions of equal value. Employees have the right to access, through the legal representation of the employees in the company, to the wage register of their company. Where there are no employee representatives, female employees may only have access to the percentage differences in the average pay of men and women. 

Where, in an enterprise with at least 50 employees, the average pay of employees of one sex is 25% or more higher than that of the other sex, taking the total wage bill or the average pay paid, the employer must include in the wage record a justification that this difference is due to reasons not related to the sex of the employees. 

The wage register has special features in companies that have an equality plan, and therefore carry out a pay audit (which requires the evaluation of jobs and the establishment of an action plan for the correction of pay inequalities). The period of validity of equality plans may not exceed four years and they are subject to compulsory registration in the Public Register of Collective Agreements and Collective Bargaining Agreements.

Prevention of occupational hazards

In Spain, employers must ensure the health and safety of their workers, not just comply with legislation and remedy risk situations. This includes the obligation to carry out risk assessments, take measures in emergencies, provide protective equipment and ensure the health of workers and pregnant or breastfeeding women (so that they do not carry out tasks that may pose risks to them or to the foetus). 

All employers shall have a prevention service to provide advice and support in these tasks, for which the employer shall designate one or more workers to carry out this activity. In companies with fewer than ten employees, the service may be provided directly by the employer, provided that he/she carries out his/her activity on a regular basis at the workplace and has the necessary capacity to do so.

On the other hand, an external prevention service could also be used in certain cases. Failure to comply with occupational risk prevention obligations may give rise to administrative, labour, criminal and civil liability.