Key Aspects of Fixed-Term Labor Agreements
Understanding Temporary Employment Contracts
Temporary contracts are concluded to meet specific market demands or address peak workloads, even for the company’s normal activity. A Collective Bargaining Agreement may determine the activities in which temporary workers can be hired or set general criteria on the relationship between the number of temporary contracts to be performed and the total workforce of the company, in which case, its provisions apply.
Duration and Extensions
The maximum duration for these contracts is 6 months within a period of 12 months, computed from the date the cause justifying the temporary contract arises.
If concluded for a period of less than 6 months, they may be extended by agreement of the parties, provided the total duration does not exceed the initial limit. In these cases, the contract shall be extended automatically until such time when no prior notice or express extension is given, and the employee continues to provide services, unless the temporary nature of the service is explicitly stated otherwise.
Historical Context and Special Cases
It’s important to note the existence of various temporary contracts with different reference periods and durations, particularly those predating the reform of May 17, 1997. Before this reform, Collective Bargaining Agreements could modify both the reference period and duration of these contracts without limitation. This situation persists for contracts established under those conventional rules.
Such contracts are governed by the provisions of their original agreements, pending their initial term, and their duration can exceed the standard 12-month continuous period. For example, if a sectoral Collective Bargaining Agreement permits a maximum duration of 3 years due to special circumstances, contracts can be signed for up to this 3-year maximum as long as that Collective Bargaining Agreement remains in force.
Preventing Abuse
Collective Bargaining Agreements may also establish rules to prevent abuses in the use of successive temporary contracts.
Contract Formalities
Written Form Requirements
Temporary contracts must be in writing only when their duration exceeds four weeks. While there is no official model, the one provided by the INEM (Spanish Public Employment Service) is commonly used, completed in triplicate, plus a basic copy if it is in writing.
The contract should clearly identify the cause that justifies it and determine its duration. Written temporary contracts must be registered with the Employment Office, which should also be notified of any extensions. If the contract is verbal, its implementation must be reported in writing to the INEM within 10 days.
Full-Time vs. Part-Time
Temporary contracts can be full-time or part-time. If part-time, the absence of a written form will lead to the presumption that the contract was entered into full-time, unless the part-time nature of the services can be proven otherwise.
Presumption of Indefinite Contract
A temporary contract is presumed to be indefinite unless the temporary nature of the activity or service is clearly established, particularly in the following cases:
- When the required written form has not been observed.
- When the contract ends without proper notice or termination.
- When workers have not been registered with Social Security, and a period equal to or exceeding the trial period has elapsed.
- When the contract has been made in fraud of law.