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Global employment briefing: Spain, January 2013

  • Spain
  • Employment law - HR E-Brief



Top employment law developments in 2012

With the damaging financial crisis moving into its fifth year, 2012 brought important changes from an employment regulation perspective.

Jobs in Spain are being lost at a faster rate than in any other European country, demonstrating the weaknesses of the Spanish labour model. Following unsuccessful attempts at reform in 2010 and 2011, the Government introduced important changes last year aimed at fixing structural problems in the Spanish labour system so as to facilitate job-creation and security.  The main changes can be summarised as follows:

Law 3/2010 of 6 July, on urgent measures for the reform of the labour market

The following matters that were traditionally included in the Spanish labour system have been modified to increase flexibility:

  • 10% of annual working hours can be distributed irregularly without the agreement of affected employees.

  • For new employees, severance compensation for unfair dismissal is reduced to 33 days' salary per year of service, with a maximum limit of 24 months' salary.

  • Collective redundancy procedures no longer have to be authorized by the Labour Authority.

  • Grounds for redundancies have been expanded to include "persistent decline in the level of ordinary incomes during three consecutive quarters".

  • A company's own collective bargaining agreement is given priority over the sector Collective Bargaining Agreement in certain matters.

  • A new "permanent employment contract in support of entrepreneurs" can be used by companies with less than 50 employees, which allows a probationary period of one year.

  • New tax incentives and reductions in social security contributions have been introduced to promote new hiring, subject to certain conditions being met.

Implementation of Royal Decree 1483/2012 of 29 October on collective dismissal, suspension of the employment contract and reduction of the working hours procedures.

With authorisation of the Labour Authority no longer required for collective redundancy processes, this new regulation introduces rules about the minimum number of meetings that the parties must hold during a collective redundancy consultation period. It also sets out the documentation that the employer must submit to the Labour Authority, depending on the cause alleged, which includes a mandatory relocation plan when there are more than 50 employees affected.

In addition, the new law contains specific provisions on collective procedures for suspension of the employment contract and reduction of working hours; in the main, these procedures are similar to those for collective redundancies.

Complementing these procedures is Royal Decree 1484/2012, which contains provisions on Social Security contributions to be made by the employer where employees over 50 years old are affected.

For further information please contact:

Jacobo Martínez Pérez de Espinosa
Tel +34 914 294 333