The labor reform comes into force: all the keys to the new regulation

The Royal Decree-Law to reform the labor market agreed between the Government and the social agents will come into force this Friday, December 31, after its publication yesterday in the Official State Gazette (BOE).

However, the new contracting framework established in this regulation will come into force three months after the publication of the decree in the BOE, so companies will have until March 30 to adapt to it.

The work or service contracts and the eventual ones due to production circumstances celebrated from today until March 30, 2022 will be governed by the legal regulations in force on the date they were concluded, but their duration may not exceed six months. .

In the case of having entered into before December 31, these contracts, as well as the fixed contracts of construction work, will be applicable until their maximum duration.

The labor reform, approved last Tuesday in the Council of Ministers, seeks to put an end to temporality, restore balance to collective bargaining and incorporate into ordinary legislation the temporary employment regulation files (ERTE) that will replace those used in pandemic, but with the same objective: to avoid layoffs.

The ordinary employment contract will be indefinite and that only temporary contracts may be made with highly assessed causes.

The reform establishes that the ordinary employment contract will be indefinite and that only temporary contracts may be made with highly valued causes: due to production circumstances and by substitution of another worker with a job reservation.

The first can only be arranged by occasional unpredictable increases in production or fluctuations in demand, for a maximum period of six months, extendable to twelve if so established by the sectorial collective agreement of the moment.

This cause may be used in foreseeable situations, such as Christmas or agricultural campaigns, for a maximum period of 90 non-consecutive days a year. During this time, companies may enter into temporary contracts with causes that, although foreseeable, have a reduced and limited duration within the fixed contract.

In this way, the contract for work or service will be expelled from the labor legislation, which allowed temporary periods that sometimes reached four years.

The temporary contract for substitution may be entered into to replace people during a suspension of the contract with a job reservation, to cover the reduced working hours for legal or conventional reasons, as well as to fill vacancies during a selection process. In the latter case, the duration of the contract may not exceed three months.

Fines of up to 10,000 euros

With this reform, the construction work contract will become indefinite and when the tasks of the work for which a worker has been hired are completed, the company will have to relocate him to another work or train him.

If the worker rejects the offer or cannot be repositioned because there is no suitable position, the contract will be terminated, with a 7% compensation calculated on the salary concepts established in the collective agreement.

The sectors that seasonally resort to temporary contracts will have to use the fixed-discontinuous contract from the entry into force of the new regulation of contracts, which will give rise to the same rights as the rest of indefinite ones.

Workers with this type of contract will be the preferred group for training actions. The sectoral agreements may establish job boards to encourage their hiring and improve their training during periods of inactivity.

Likewise, the norm will reduce to 18 months in a period of 24 months the term of chaining of contracts to acquire the condition of indefinite worker, compared to 24 months in a period of 30 months currently in force.

Failure to comply with the rules that regulate temporary hiring will lead to the worker being considered indefinite. The penalties for the fraudulent use of temporary contracts are raised from a maximum of 8,000 euros to a maximum of 10,000 euros and will be applied for each fraudulent situation and not for each company, as up to now.

In addition, the reform will penalize companies that abuse temporary contracts of less than 30 days with a fixed rate: they will have to pay an additional Social Security contribution of 26 euros for each contract they cancel.

This penalty will be increasing. Thus, the more short-term contracts are terminated, the greater the disincentive. With a short contract of 10 days the penalty will be 26 euros; If the same working time were covered with two five-day contracts, the extra cost in the quotation would be 52 euros.

This additional contribution will not be applied exceptionally to the special regimes of agricultural employed workers, of domestic employees, of coal mining and neither to substitution contracts.

At the same time, the reform reinforces the definition and causality of the training contract, offering two types of contract: the alternate training contract, which will combine work and training, and the contract for the acquisition of professional practice.

In the first of them, the days may not exceed 65% in the first year and 85% in the second year, without being able to work overtime, shift work or night hours. The remuneration will be adapted to the agreement and may not fall below 60% in the first year and 75% in the second year. It will never be less than the SMI proportional to the day and a tutor will be in charge of monitoring the individual training plan.

For their part, contracts to obtain professional practice may be concluded for a maximum of three years (or five years in the case of people with disabilities) after obtaining the certification. They will last between six months and a year. The remuneration will be that of the agreement for the position and will also have a tutorial follow-up.

The decree also repeals the sixteenth additional provision of the Workers’ Statute that allowed firings for economic reasons in public administrations.

Collective bargaining and ERTE to avoid layoffs

The norm recovers the full ‘ultra-activity’ of collective agreements, so that they will be extended until they are replaced by new ones, without a time limit.

In addition, the sector agreement will regain its prevalence over the company agreement. The latter may regulate the choice between payment or compensation for overtime; the schedule and distribution of working time; the adaptation of the professional classification and the family conciliation measures, but not the working day or salary.

In addition, the contracts and subcontractors will be subject to the agreement of the sector of the activity carried out or that of the main company. The company agreement may only be applied by the contractor if it determines better salary conditions than the applicable sector.

Likewise, the norm strengthens the temporary employment regulation files (ERTE) to avoid collective dismissals. In this way, ordinary labor legislation will include ERTEs that have been used massively during the pandemic, with greater facilities for their processing, and will create new ones under the name RED Mechanism to respond to cyclical or sectoral crises.

The Government will carry out an evaluation of the results obtained by the reform by analyzing the data on temporary and permanent hiring in January 2025, publishing the general temporary employment rate and by sectors, an evaluation that must be repeated every two years.