Since the labor reform, almost half of all formal contracts are permanent, as temporary contracts require proof of the reason for the contract, the specific circumstances that justify it, and the connection between both and its duration. Within the category of permanent contracts, the most common type used by companies is the fixed-term intermittent contract, even in sectors that did not previously use it. For this reason, the Labor and Social Security Inspectorate (ITSS) has launched an inspection campaign aimed at detecting potential fraud in the use of this type of contract.
The labor reform has changed the hiring paradigm in Spain. The requirement to prove the reason for the contract, the specific circumstances that make it possible within the company, and the connection between both and its duration, has led many companies to abandon temporary contracts and opt for permanent ones, to the point that almost half of the contracts formalized since this reform are permanent.
But within permanent employment contracts, the type that has grown the most, by a wide margin, has been the fixed-term intermittent contract. So much so that the Ministry of Labor has announced that the Labor and Social Security Inspectorate (ITSS) will begin a new monitoring campaign aimed at detecting potential fraud in the use of this type of contract.
Changes to the fixed-term intermittent contract
The reform, applicable from March 31, 2022, has broadened the circumstances under which this type of contract can be formalized:
- Seasonal jobs or jobs linked to seasonal activities. For example, a hospitality business that opens when the weather gets warmer, or a company that sells hams and whose business increases at Christmas. If the need recurs on specific dates, this type of contract should be used, not the permanent part-time contract, as was the case until now.
- Intermittent work that, while not seasonal, has specific periods of execution. For example, a company that sets up stages for events.
- To cover the need for labor related to a contract or subcontract. This requires that the contract be part of the ordinary business of the company providing the service. Thus, a security company contracted by a supermarket may enter into fixed-term intermittent contracts with the workers assigned to that service.
With a temporary employment agency. Likewise, provided that the fixed-term intermittent contract is due to one of the above reasons, it may be used by a temporary employment agency.
In writing. The fixed-term intermittent contract must be formalized in writing using the official form. This contract must include the essential elements of the work, its duration (in detail), and the method and order of call-up established by the collective agreement. It must also indicate, as a guideline, the estimated working hours and their distribution, which must be finalized at the time of hiring.
Attention. Sectoral agreements may establish the possibility of entering into fixed-term intermittent contracts on a part-time basis.
Call-up. The call-up must be made in writing or by another means that allows for a record to be kept, with precise details of the conditions of incorporation and with adequate notice. The regulation does not establish a minimum notice period, so if the collective agreement does not specify a particular notice period, it will be at the company's discretion. At the beginning of each calendar year, the company must provide the workers' legal representatives with a schedule of planned call-ups, as well as the data on the actual start dates for permanent seasonal workers once they occur.
Contracts. The use of a contract for production circumstances has been expressly prohibited for contracts, and the contract for specific work or service has been eliminated; therefore, the fixed-term intermittent contract is the most suitable for these cases.
- The worker cannot be dismissed while the contract is in effect, but only when it has ended.
- The period of inactivity will be limited to the waiting period between contracts. Collective agreements (excluding company agreements) may establish a maximum period of inactivity between subcontracts. Failing that, the maximum will be 3 months.
Labor Inspection Campaign
This extensive regulation has prompted companies and sectors that had not previously considered using fixed-term intermittent contracts to adopt this option. A clear example of the increased use of this type of contract is occurring in the hospitality sector, particularly in areas related to seasonal tourism.
Currently, the regulation allows, in cases where the company always has the same workers to provide service on specific dates, the indefinite hiring of these workers and the subsequent resumption of activity through the mandatory call in which the worker is urged to return to his job.
However, the fact that the reform authorizes the use of this contract for situations that were previously prohibited does not mean that we can enter into fixed-term intermittent contracts for any situation. In these cases, using a temporary contract when a fixed-term intermittent contract is appropriate is considered a violation of the law and will transform the contract into a standard open-ended contract.
The objective of this campaign is to verify that these contracts are not being used to cover fixed but continuous needs for the company, replacing the indefinite contract, which should be the ordinary modality of the labor market.
The aim is also to ensure that periods of inactivity are not used to improperly claim unemployment benefits while working irregularly.
The current fixed-term intermittent contract, being an indefinite contract that accrues seniority and allows workers to access rights such as compensation for termination of contract, reserved, in most cases, for indefinite contracts, has such broad regulation that it allows many companies to use it to replace temporary contracts.
The new regulations do not imply that all permanent contracts can be fixed-term intermittent contracts. If the need for the job is persistent and does not follow alternating or intermittent periods, a standard permanent contract should be used, and any circumvention of the law may be severely punished by the Labor Inspectorate.
Attention. The campaign will be carried out through the participation of the ITSS (Labor and Social Security Inspectorate), which, through the use of technologies such as massive data matching, will be able to detect which companies are fraudulently using the fixed-term intermittent contract.
Sanctions
This control action is combined with the tightening of sanctions for labor violations that occurred with the labor reform, which specifically stipulated:
- The increase in penalties related to irregular employment, which can reach up to 10,000 euros.
- The application of the sanction for each worker involved.
You can contact this professional office for any questions or clarifications you may have.
Warm regards,
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A Àmbit Assessor, SL has 40 years dedicated to the tax, comptable and labor consultancy of the Pime.
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