Spanish Employment Contracts
The different Spanish employment contracts are something that anyone wishing to work in Spain needs to be very careful with as they decide your entitlements and severance packagesas well entitlement to "paro" or unemployment benefits.
Before going any further it must be said that whilst the advice here is offered in good faith you should always check with a lawyer (Abogado) for definitive and legally acurate advice.
In Spain there are 4 basic contract models:
- Indefinido - Translated "indefinate" meaning permanent
- Obra o Servico - Job or service meaning temporary
- Regimen Agricular - Special contract for Agriculture
- Regimen Maritimo - Special contract for ship based workers
However 99% of people wishing to work in Spain will only ever encounter the first two types and theseare explained below in detail.
This is the standard Spanish employment contract for permanent positions in companies where the positionis not linked to a certain project and is not of a specified duration. The employer will register thecontract with the Spanish Social Security and as such when the employees time in the company comes to an endthrough redundancy or being fired it is the Social Security that will pay unemployemnt benefit.
One point to note with these contracts is that the worker has an entitlement to a minimum of 22 days salary for every year they have been with the company, paid "tax free" if the company terminates the employment. Thisis except in the case of an "ERE" being approved by the Social security in which case a lower redundancy packageis normally offered. An ERE (Expediente de regulacion de Empleo) is only approved if a company can show that byreducing its headcount by more than 20 people or 20% of total staff it becomes viable and can retain the remaining staff.
The Indefinido Spanish employment contract will include all and any entitlements that the worker enjoys such as numberof days vacations, wage package splits (12, 14 or 28 payments throughout the year) and the very important point ofwhere the worker is employed, ie the physical location. Any deviations from this contract will require compensation tothe employee. For example; if the workers location is stated as A and the company moves them to B then the company has to agree costs with the worker.
Obra o Servicio
The principal difference between the Indefinido and Obra o Servicio Spanish employment contract models are in:
- Redundancy entitlements
- Contract duration
For those employees working with a contract that is Obra o Servicio a finite length of employment must be agreed and mustbe less than two years. In the case that the end date is left "open", for example a project that is 14 mths might become 18 mthstherefore exact dates are not stipulated, then the worker is considered to have an Indefinido contract the moment he or she hasbeen with the company 24 mths. This little known condition is very important when it comes to redundancies.
Whereas an employee with an Indefinido contract will enjoy a tax free payment of 22days minimum (usually more) for every year in the companyan employee with the Obra o Servicio model receives ZERO. This employee is however entitled to Social Security unemployment benefits.
If you are being transferred to Spain with your company for a duration of more than 6 months or permanently we strongly advise you includelegal costs as part of the company provided support package
Understand the basic differences in Spanish employment contracts? Then time to find a job....>