Overview of Employment Law in Spain: Key Rights, Contracts, and Regulations for Workers

Spain, with its vibrant culture and growing economy, has become an increasingly attractive destination for businesses looking to expand their operations or engage remote talent. However, navigating the intricacies of Spanish employment law can be a complex undertaking for small organizations or companies working with freelancers and remote employees. A thorough understanding of local legislation is crucial to ensure compliance, avoid costly penalties, and foster a fair working environment.

This article aims to provide a comprehensive and structured breakdown of employment laws in Spain, equipping businesses with the knowledge needed to hire and maintain compliance.

Overview of Spanish Employment Law

Spanish employment law is primarily governed by the Spanish Constitution, the Workers' Statute (Estatuto de los Trabajadores), and various collective bargaining agreements. It's known for its strong emphasis on worker protection, reflecting a historical commitment to social rights. This robust legal framework ensures a balance between the rights of employees and the needs of employers.

It's vital for businesses to understand these labour laws in Spain not just for legal compliance but also for building a positive reputation and attracting top talent. Non-compliance can lead to significant fines, legal disputes, and reputational damage.

Procedures and Requirements for Hiring Employees

Hiring an employee in Spain involves several key steps and adherence to specific legal requirements:

• Social Security Registration: Before an employee starts work, the employer must register them with the General Social Security Treasury (Tesorería General de la Seguridad Social - TGSS). This ensures the employee is covered by the social security system, which includes healthcare, unemployment benefits, and pensions.


• Employment Contract: A written employment contract is generally mandatory, especially for indefinite-term, temporary (if longer than four weeks), and training contracts. The contract must be in Spanish and include essential details such as the parties' identities, job description, working hours, salary, and duration of employment.


• Probationary Period: A probationary period can be established, but its duration must be specified in the contract and cannot exceed six months for qualified technicians or two months for other workers (unless a collective bargaining agreement sets a different period).


• Notification to Public Employment Service: The employer must notify the Public Employment Service (Servicio Público de Empleo Estatal - SEPE) of the employment contract within 10 days of its signing.


• Health and Safety: Employers are legally obligated to ensure a safe working environment and conduct a risk assessment for all jobs. New employees should receive information and training on health and safety procedures.

Rights of Foreign Workers in Spain

Foreign workers in Spain generally enjoy the same labor rights and protections as Spanish citizens, provided they hold a valid work permit and residence authorization. Key considerations for foreign workers include:

• Work Permits and Visas: Non-EU/EEA/Swiss citizens typically require a work visa and a residence permit to work legally in Spain. The employer usually initiates the application for the work permit.


• Equal Treatment: Once legally employed, foreign workers are entitled to the same wages, working conditions, social security benefits, and protection against discrimination as Spanish nationals.

Types of Employment Contracts

Spanish employment law recognizes several types of employment contracts, each designed for specific employment needs:

Indefinite Contracts (Contratos Indefinidos)

These are the standard and most common type of contract, offering permanent employment without a set end date. They provide the highest level of stability for employees and are generally favored by Spanish labor laws. Indefinite contracts can be full-time or part-time.

Temporary Contracts (Contratos Temporales)

Temporary contracts are permitted only under specific circumstances defined by law, such as:

• Contracts for a Specific Project or Service (Contrato por Obra o Servicio Determinado): Used for a specific project with a foreseeable end. Maximum duration is typically three years, extendable by one more year by collective bargaining agreement.


• Interim Contracts (Contrato de Interinidad): Used to replace an absent employee with the right to return (e.g., maternity leave, sick leave).


• Circumstantial Production Contracts (Contrato Eventual por Circunstancias de la Producción): Used to meet temporary increases in demand. Maximum duration is six months within a 12-month period, extendable by collective bargaining agreement.

Recent reforms aim to limit the excessive use of temporary contracts, making indefinite contracts the default.

Training Contracts (Contratos para la Formación y el Aprendizaje)

Designed for young people (typically aged 16-30) to combine work and training. These contracts have a minimum duration of one year and a maximum of three years, with specific requirements regarding training hours and the employee's qualification level.

Legal Requirements for Employment Contracts

All employment contracts, particularly temporary and training contracts, must be in writing and include:

• Identification of the parties.


• Job title and description.


• Workplace.


• Duration of contract (for temporary contracts).


• Working hours.


• Remuneration.


• Probationary period (if applicable).


• Collective bargaining agreement (if applicable).

Failure to meet these requirements can lead to the contract being presumed as indefinite.

Working Conditions

Spanish employment law sets clear guidelines for working conditions to protect employee well-being.

Standard Working Hours and Breaks

The general maximum legal working week is 40 hours averaged over a year. The maximum daily ordinary working hours cannot exceed nine hours, unless a collective bargaining agreement allows for a different distribution.

Employees are entitled to a minimum daily break of 15 minutes if their continuous working day exceeds six hours. A minimum of 12 hours must elapse between the end of one working day and the beginning of the next.

Overtime Regulations

Overtime (horas extraordinarias) is generally voluntary and must be compensated. The maximum number of overtime hours is 80 per year. Overtime can be compensated with additional pay (not less than the ordinary hourly rate) or equivalent paid rest time.

Paid and Unpaid Leave Policies

• Annual Leave: Employees are entitled to a minimum of 30 calendar days of paid annual leave per year.


• Public Holidays: Spain observes a number of national, regional, and local public holidays, which are generally paid days off.


• Sick Leave (Incapacidad Temporal): Employees on sick leave are entitled to benefits from the social security system. The employer is typically responsible for paying a portion of the salary during the initial days.


• Maternity and Paternity Leave: Both parents are entitled to 16 weeks of paid leave, generally non-transferable and taken in specific blocks.


• Other Paid Leave: Employees are entitled to various other types of paid leave, including for marriage, birth of a child, death or serious illness of a family member, relocation, and fulfilling public duties.

Minimum Wage and Compensation

Spain has a national minimum wage (Salario Mínimo Interprofesional - SMI), which is reviewed annually by the government. The SMI applies to all employees, regardless of their contract type or sector. Collective bargaining agreements often establish higher minimum wages for specific industries or job categories.

Employers must ensure that all employees are paid at least the SMI. Salaries must be paid regularly, typically monthly, and pay slips must be provided.

Health and Safety Regulations

Spanish labor laws place a significant emphasis on occupational health and safety (Prevención de Riesgos Laborales). Employers have a legal duty to:

• Assess Risks.


• Prevent Risks.


• Provide Information and Training.


• Provide Personal Protective Equipment (PPE).


• Offer Health Surveillance.


• Designate Resources for health and safety.

Non-compliance can result in severe penalties, including fines and criminal liability.

Anti-Discrimination Laws

Spanish employment law strongly prohibits discrimination in employment based on various grounds, including gender, race, religion, sexual orientation, age, disability, and trade union membership. These prohibitions apply to all stages of employment, from recruitment to termination. Employers must ensure their policies and practices are non-discriminatory.

Trade Unions and Collective Bargaining

Trade unions play a significant role in Spanish industrial relations. Employees have the right to form and join trade unions. Collective bargaining agreements (Convenios Colectivos) are widespread and often regulate working conditions, wages, and other employment terms for specific sectors or companies.

These agreements are legally binding and often supplement or override general provisions of the Workers' Statute, provided they offer more favorable conditions for employees. Companies with a certain number of employees are required to allow for the election of employee representatives.

Termination of Employment

Termination of employment in Spain is subject to strict regulations to protect employees from unfair dismissal.

Conditions and Procedures for Dismissal

Dismissal can occur for several reasons:

• Objective Dismissal (Despido Objetivo): Based on objective, economic, technical, organizational, or production-related reasons. The employer must demonstrate a genuine need and follow a specific procedure, including notice periods and severance pay.


• Disciplinary Dismissal (Despido Disciplinario): Based on serious and culpable breach of contract by the employee. No notice period is required, and initial severance pay isn't typically required unless the dismissal is later deemed unfair.


• Collective Dismissal (Despido Colectivo): Applies when a certain number of employees are dismissed for objective reasons within a specific timeframe. This requires a formal consultation period with employee representatives and authorization from labor authorities.


• Voluntary Resignation: Employees can resign by providing the notice period stipulated in their contract (usually 15 days). No severance pay is due.


• Mutual Agreement: Employment can be terminated by mutual agreement between the employer and employee.

Employee Rights Upon Termination

Upon termination, employees generally have the following rights:

• Notice Period: For objective dismissals, employees are typically entitled to a 15-day notice period.


• Severance Pay (Indemnización): The amount depends on the type of dismissal and length of service. For unfair dismissal, it's generally 33 days' salary per year of service (for contracts after February 12, 2012). For fair objective dismissal, it's 20 days' salary per year of service.


• Final Settlement (Finiquito): Includes pro-rata salary, accrued but untaken annual leave, and any other outstanding payments.


• Unemployment Benefits: Eligible employees who are involuntarily dismissed are generally entitled to unemployment benefits.

Dispute Resolution

Spain offers several mechanisms for resolving employment disputes, aiming to promote conciliation before resorting to court proceedings.

Mechanisms for Resolving Employment Disputes

• Conciliation/Mediation (Conciliación/Mediación): Before a case goes to court, it's mandatory to attempt conciliation through a mediation service (Servicio de Mediación, Arbitraje y Conciliación - SMAC).


• Labor Courts (Juzgados de lo Social): If conciliation fails, the dispute proceeds to the labor courts, which specialize in employment matters.


• Appeals: Decisions of the labor courts can be appealed to higher courts.


• Arbitration: Disputes may be resolved through arbitration if both parties agree.

Conclusion

Navigating the complexities of Spanish employment law is essential for any business operating or planning to hire in Spain, particularly for those engaging remote workers or freelancers. The Spanish legal framework prioritizes worker protection, demanding meticulous attention to detail in hiring procedures, contract types, working conditions, and termination processes. By comprehensively understanding and adhering to these regulations, businesses can ensure compliance, avoid legal pitfalls, and cultivate a fair and productive working environment. For small organizations and companies working with independent contractors, proactive engagement with these labour laws in Spain is not just a legal necessity but a strategic advantage for sustainable growth and a positive reputation.