Key Aspects of the Spanish Labour Reform Approved by the Council of Ministers

Actualizado: 1 feb

On 23 December 2021, the Spanish Government and the Social Partners came to an agreement on the announced modernization of labor relations, which has resulted in the Royal Decree Law 32/2021 published in the Official State Gazette on 30 December 2021.



The most relevant aspects of the new regulation, which has significantly strengthened the role of collective bargaining and redefined the contracting model, with the main aim of reducing temporary employment, are as follows:


Limitations on and disincentives to temporary employment


The new legislation is firmly committed to indefinite-term contracts, limiting the cases in which it is lawful to resort to temporary contracts. In this respect, it is worth highlighting the elimination of contracts for works and services, temporary and interim contracts; however, those currently in force will remain in force until the end of their maximum duration in accordance with the previous regulations.


Promotion of the permanent-discontinuous contract


This aspect is one of the most demanded by the temporary employment agency (ETT in Spanish) sector in order to promote the use of this type of contract, as pursued by the Government, which wishes to convert the maximum number of temporary workers into permanent ones, albeit by means of the permanent-discontinuous model.


Thus, the purpose of this type of contract is significantly broadened, extending, among other cases, to the execution of commercial and/or administrative contracts and, likewise, the use of this type of contract in temporary employment contracts (ETT) is made possible.


New training contract


The contract modalities of internship contract, training and apprenticeship contract and dual university training contract are abolished, and the "Training Contract" is created.


With regard to training contracts, there will be two modalities: alternating training and obtaining professional practice. The alternating training contract is intended to respond to the acquisition of the professional competence corresponding to a certain level of studies. The working hours will not exceed 65% in the first year and 85% in the second year, and no overtime, shift work or night work will be allowed. Contracts for obtaining professional practice may be for a maximum of three years, or five years in the case of people with disabilities, after obtaining certification. Duration shall be between six months and one year.


Recovery of the indefinite ultra-activity of collective agreements


The conditions laid down in a collective agreement remain in force after the end of its express validity.


Limitation on the priority of application of the company agreement


The basic salary and wage supplements are excluded from this priority of application, with the regulation established in the higher-level agreement being applicable to these wage items.


Subcontracting: collective agreement applicable to the contractor and/or subcontractor


This will be the sectoral agreement corresponding to the activity carried out or another one if so determined in collective bargaining. When the contractor or subcontractor has its own agreement, this may be applied in accordance with the terms set out in article 84 of the ET.


ERTE (Expediente de Regulación Temporal de Empleo in Spanish) regulations and introduction of the new Employment Flexibility and Stabilisation Network Mechanism


With the prior authorization from the Council of Ministers, it will allow companies to apply for ERTEs for reduction of working hours or suspension.


Reform of the Law on Infringements and Penalties in the Social Order and strengthening of the role of the Labour and Social Security Inspectorate


An important new development is that, from the entry into force of this so-called Labor Reform, specific mention is made on the fact that certain breaches of contract and/or provision of services may be sanctioned individually, i.e. for each of the contracts and/or employees affected.


Until now, non-compliance affecting several employees could be sanctioned as a single infringement.


New sanctions are established for cases relating to non-compliance with the obligation to inform discontinuous permanent employees of vacancies, hiring during ERTE, dismissals during the ERTE due to force majeure or RED mechanism, etc.


Likewise, the role of the Labor Inspectorate has been considerably strengthened, providing it with more means of verification and broad powers to ensure compliance with company labor obligations.


Following approval of the reform by the Council of Ministers by means of a royal decree law, Congress must validate or reject it within 30 days. If it is rejected, the law will be repealed and will have no effect from that moment onwards. If it is approved, it would remain in force and with the same content, as it cannot be modified in this procedure.


At the request of any parliamentary group, it is possible to request the regulation to be processed as a bill through the urgency procedure. During this process, modifications can be made to its content by means of amendments from the different parliamentary groups. Once the process is completed, the Parliament will approve the final law. On average, the ratification process for a bill takes approximately 6 months.


Finally, although the regulation is already in force, the measures affecting contracts (training, temporary, permanent-discontinuous) will take effect from 30 March 2022.

At IVC we have an expert labor department ready to help companies with their human resources management and we provide support to align their policies in accordance with the Spanish law.


Do you have any doubts?


Contact us, we can help you.


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