Understanding Indefinite and Fixed-Term Employment Contracts in Spain
Indefinite Contracts & Bonuses
Permanent Labor Agreements
Permanent contracts have no set termination date. They are presumed indefinite unless a temporary nature is explicitly stated. Indefinite contracts are assumed in the following circumstances:
- The worker hasn’t been discharged from Social Security after the trial period.
- The contract wasn’t made in writing when required.
- Contracts are entered in fraud of law (e.g., fixed-term for continuing needs).
- The company doesn’t end the contract upon completion, and the worker continues.
Method
Employment contracts can be oral or written. Either party can request a written contract. Employers must notify the Public Employment Service within 10 days of contract conclusion.
Contracts for Promoting Indefinite Hiring (Stable Contracts)
These contracts aim to place specific groups affected by unemployment:
- Unemployed workers registered with the Public Employment Service:
- Youth (16-30 years old)
- Women in underrepresented professions
- Over 45 years old
- Unemployed registered for at least six months
- People with Disabilities
- Workers employed in the same company under a fixed-term or temporary contract.
Features
- Indefinite duration and in writing.
- Must be communicated to the Public Employment Service within 10 days.
- Rights and obligations are the same as other contracts, except for unfair dismissal compensation (33 days’ salary per year of service, up to 24 months).
Indefinite Contract Reductions
Available for:
- Female unemployed or part-time workers (less than 1/3 of full-time) registered at the Employment Service:
- Women in general
- Women employed within 24 months after childbirth, adoption, or fostering
- Women returning to work after 5 years of inactivity
- Unemployed or part-time workers (less than 1/3 of full-time) registered with the Public Employment Service:
- Youth (16-30 years old)
- Unemployed for six or more months continuously
- Over 45 years old
- With family responsibilities and dependent children
- Unemployed workers receiving benefits or subsidies
- Workers from the textile, clothing, manufacturing, footwear, and leather sectors
- Unemployed workers in social exclusion situations hired by insertion companies
- Victims of gender violence or domestic violence
- Unemployed workers over 52 years old
2. Fixed-Term Contracts
Fixed-term contracts have a set end date, adapting the work duration to its cause. They are for temporary activities, reserving permanent contracts for unlimited work. Contracts shorter than seven days have a 36% surcharge on Social Security contributions.
Task or Service Contract
For executing a specific work or service with autonomy within the company’s business. The work must be identifiable and distinct from the company’s usual tasks.
Execution: In writing, specifying the work, duration, and tasks. The contract and extensions must be communicated to the Public Employment Service within ten days.
Duration: The time required for completion. A set end date is an indication.
Day: Full-time or part-time.
Fixed-Term Periodic and Discontinuous Contracts
For tasks with alternating periods of activity and inactivity (e.g., crop collection, seasonal tourism). These can be regular permanent or fixed discontinuous contracts. In both, the employer-employee link remains during inactivity.
Fixed and regular contracts have well-known start and end dates (e.g., school canteen services). They are considered fixed and regular permanent part-time contracts.
Fixed-discontinuous contracts also have alternating periods, but the call-to-work dates are determined by collective agreements.
Form and Term
Must be in writing, stating the estimated duration, manner, and order of call established by the Collective Agreement. It must also indicate working time and distribution. Notify the Public Employment Service within 10 days.
Relief Contract: Partial Retirement
The retiring worker must be within five years of retirement age and request a working hour reduction (25%-85%), with a corresponding wage reduction. They are replaced by a substitute worker.
The substitute worker must be registered as unemployed or have a fixed-term contract with the company.
Duration: Indefinite or equal to the remaining time until the replaced employee’s retirement.
Day: Full-time or part-time. The duration must be at least equal to the replaced worker’s reduction. Working hours can be completed simultaneously or separately.
Form: In writing, including the name, age, and professional circumstances of the replaced worker.