Labor reform: contracts, dismissals, agreements and internal flexibility

Automatic summary, not yet reviewed

1. Temporary work agencies will also be able to act as employment agencies, if they obtain the corresponding authorization. Applications are decided within three months and, if there is no answer, they are deemed approved.
2. Workers with at least one year in the company will have the right to 20 paid hours of training per year, which can be accumulated for up to five years. A training account linked to the Social Security number is also created.
3. A new permanent-hire contract to support entrepreneurs is created, only for companies with fewer than 50 workers, with a one-year trial period and Social Security rebates when hiring young people aged 16 to 30 or people over 45.
4. Part-time workers will be able to work overtime, in the legal proportion to their hours, and it will count toward Social Security contributions. Remote work is also regulated, with the same rights as on-site work.
5. Functional and geographic mobility and substantial changes in working conditions are made more flexible: the company can change duties or transfer workers for economic, technical, organizational or production reasons, with 20 days' pay per year of service as compensation if the worker chooses to leave.
6. In collective dismissals, prior administrative authorization is eliminated: a consultation period with worker representatives is enough. If more than 50 workers are affected, the company must offer an external outplacement plan.
7. Severance pay for unfair dismissal becomes 33 days of salary per year of service, capped at 24 monthly payments, for all contracts signed from February 12, 2012. Earlier contracts are calculated at 45 days for the time before that date.
8. Wages pending during the trial will only be paid if the employer chooses to reinstate the worker after an unfair or void dismissal. If the employer chooses compensation, they do not have to be paid.

Who it affects

• Workers: Severance pay and wages pending during the trial change, and new training and remote work rights are recognized.
• Companies, especially small and medium-sized ones: They get new contracts with rebates, more flexibility to change internal conditions, and collective dismissals without administrative authorization.
• Young unemployed people: They can be hired under the entrepreneur-support contract and the training and apprenticeship contract, with age limits extended while unemployment is above 15%.
• Worker representatives: They take part in consultation periods for transfers, changes and collective dismissals, and can challenge the latter in court.
• Directors and executives of bailed-out credit institutions: Their termination compensation is capped, and they can be dismissed without compensation if sanctions are imposed on them.

Words worth knowing

Despido colectivo

Collective dismissal: ending contracts for economic, technical, organizational or production reasons affecting, within 90 days, a minimum number of workers depending on company size.

Salarios de tramitación

Wages the employer must pay the worker from dismissal until the court ruling, when the dismissal is unfair and reinstatement is chosen.

Periodo de consultas

Consultation period: time during which the company negotiates with worker representatives before a transfer, a change in conditions or a collective dismissal.

Descuelgue

Opting out: no longer applying, by agreement or decision, some conditions set in the collective agreement, such as salary or working hours.

Fondo de Garantía Salarial

Wage Guarantee Fund: a public body that pays part of severance pay when the company cannot afford it, in the cases provided by law.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries