13/07/2012 New Labor reform in Spain
On July 9th the new labor reform passed by the Spanish Parliament went into effect. Act 3/2012 on urgent measures for labor market reform includes 85 modifications to the labor reform passed in February. We highlight the most important points as follows:
- The 20 hours per year of paid leave for professional training must be related to the company activity and is cumulative over a period of 5 years. Training provided within the framework of a company training plan also qualifies.
- The brand new indefinite employment contract for companies employing less than 50 workers which has a probation period of one year can be used until the unemployment rate in Spain drops below 15%. To take advantage of social taxes, the company must employ the worker for at least three years and, furthermore, must maintain employment levels for at least one year from the date of employment onwards. When the contract is terminated by means of a fair objective dismissal, taxes will not be forfeited.
- The company can redistribute 10% of the working hours on a varying schedule throughout the year (previously set at 5%). The company is required to give the employee 5 days notice.
- The period of application for expired collective bargaining agreements is limited to one year. Collective bargaining agreements already under notice of termination are also subject to this time limit.
- As regards the obligatory conversion of successive temporary contracts to indefinite ones, as of January 1, 2013, time for services rendered between the period of August 31, 2011 and December 31, 2012 will not be included in the calculation. However, periods of service preceding and following these dates will be included (24 months in a total 30 month period).
- For company decisions based on economic reasons, such as terminations, lack of application of collective bargaining agreements and reduction of salaries, it is necessary that the decrease affects ordinary revenue. Additionally, drops in sales or revenue from consecutive quarters must be contrasted with the same quarters from the previous year.
- The Labor Authority will be able to mediate in cases of collective dismissals. Individual communications to affected employees are optional.
- In cases of collective dismissals, when unions do not bring collective claims, the company will be able to file a claim to have the dismissals validated and thus avoid individual claims.
- Terminations due to absenteeism will be allowed when employees miss 20% of working hours in 2 consecutive months if total absences in the 12 preceding months amounts to 5% of working days. Absences for cancer or serious illness treatments are excluded from this calculation.
- The calculation of severance compensation for unfair dismissal has been clarified, so that there will be double prorating for months falling in periods of less than one year (in each case compensated with 33 and 45 days).
- Collective bargaining agreement clauses that envisage forced retirement will be null and void. This does not apply to collective bargaining agreements entered into prior to the new Act, which are still in force.
- Contributions to the Public Treasury will be obligatory for collective dismissals affecting employees who are 50 or older in companies with profit and employing more than 100 workers (previously set at 500 workers).
- If the company wishes to acknowledge the unfair nature of the dismissal in order to avoid litigation and to insure the tax exempt status of the severance compensation, it is necessary to appear before the corresponding administrative conciliation body (previously private arrangements sufficed).
For any query, please contact Ana Gómez (partner) at the following e-mail address: firstname.lastname@example.org
The present bulletin contains general information and is not to be considered our professional opinion or a labor assessment.