Key to labor reform: fewer contracts and more control for companies

After several months of intensive negotiations between the government, employers and trade unions, the labor reform was approved in the House of Representatives. This is one of the major obligations of the legislator Pedro Sanchez which, as with the pension reform, has the agreement of the social partners.

The Second Vice-President of the Government and Minister for Labor and Social Economy, Yolanda DiazShe was the main supporter of the new rule, which she has defended as a “country deal” and a measure “to end job insecurity in Spain”.

The labor reform aims to reduce temporary employment, reduce precariousness and improve the quality of work, which the government says will serve to improve the public pension system, another major asset of the executive branch this term.

The keys to labor reform

Some types of temporary contracts are disappearing

One of the great innovations of labor reform is the disappearance of construction, fixed-term and temporary contracts. In this way, The types of fixed-term contracts are reduced to two: by production or substitution circumstances.

In the first case, production-related fixed-term contracts may not be extended beyond six months – or a year if that is stipulated in the sectoral agreement – ​​and may only be concluded in the event of a certain mismatch between the number of employees and the amount of work over a certain period of time .

Next, People hired without meeting the requirements are immediately made permanentand workers “who have been under two or more contracts with the same enterprise or group of enterprises for 18 months or more in any 24-month period because of production circumstances”.

Rather permanent contracts

Another major objective of the labor reform is the increase in permanent employment contracts. To achieve this, the regulation states that the ordinary contract is open-ended and adds that the sanctions and business violations are and will be individualized up to a maximum of 10,000 euros for each employee affected.

In sectors such as construction, Labor reform is forcing companies to replace employment contracts with permanent ones. In addition, they must transfer their workers to another job after the work is completed, or provide them with training or retraining.

Changes in the ERTE

Labor reform has fully entered the ERTE, one of the mechanisms most commonly used by companies during the pandemic to temporarily lay off their workforce. Hereinafter, Companies with fewer than 50 employees can speed up the approval process by up to seven days.

In addition, labor reform increases the minimum amount of information unions receive when applying for an ERTE, and prohibits companies from demanding overtime from their employees or hiring external staffamong other measures.

More collective bargaining

Another key point of labor reform is the revival of collective bargaining. Moreover, labor reform brings back the vague ultra-activity of the agreements that says so The established conditions remain valid even after their period of validity has long as companies and unions do not reach a new agreement.

Restriction on Subcontractors

The labor reform also includes a new restriction on subcontractors. The regulatory framework between contractors and subcontractors becomes that of the activity carried outa factor not included in the previous regulation, which allowed subcontractors to reduce workers’ wages in order to be more competitive among themselves.

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