Basics of Spanish labour law

We provide, without claiming to be complete, an initial overview of the basic principles of labour law relevant to your business activities in Spain. The focus is on the topics that have proven to be particularly relevant in practice.

1. Provisions

In principle, a triad of norms must be taken into account in Spanish labour law: Firstly, the Workers' Act (Estatuto de los Trabajadores=ET) applies. This is substantiated by the collective agreements that exist in all sectors. Finally, employment contracts apply at the individual level.

Each level must comply with the requirements of the higher level (e.g. no longer probationary period than provided for in the collective agreement may be agreed in the employment contract). However, there may always be deviations in favour of the employee (e.g. 40 days of holiday may be agreed).

2. Duration of employment contract

In principle, and unless otherwise agreed, employment contracts are deemed to be concluded for an indefinite period. An employment contract may only be limited in time if there is a justification for it (e.g. circumstances of production), Art. 15 ET. If there is no justification (this can be challenged), the employment contract is deemed to be concluded for an indefinite period.

3. Probationary period

The probationary period depends on the collective agreement and the job category (also defined by the collective agreement). It is usually between 15 days (for ordinary employees) and 6 months (for managerial employees, etc.).

4. Payment of wages in the event of illness

In principle, the employee receives no salary for the first three days. From the 4th to the 20th day, he receives 60% of the daily salary (with the employer paying for days 4-15 and the social security paying for days 16-20). From the 21st day, the employee receives 75% from social security. In many cases, however, the applicable collective agreement provides for improvements with regard to this legal rule, so this must always be assessed in the individual case.

5. Terminations

Every termination requires a reason. A distinction is made between reasons from the sphere of the company (operational reasons, etc., so-called "objective dismissal") and those of the employee (whether disciplinary or because he/she does not meet targets/turnover targets, etc.; this type of dismissal is always called "disciplinary dismissal").

Disciplinary termination do not require a notice period and, if justified, do not entail compensation. If, in the course of an action for protection against termination, a court rules that the dismissal was unlawful, compensation must be paid (33 days per year of service, maximum 24 months' salary) or the employee must be reinstated. If the termination was null and void, the employee must be reinstated and the outstanding salaries must be paid.

The objective notice of termination must be given with 15 days' notice (in writing), and at the same time the employee must be paid compensation of 20 days per year of service (maximum 12 months' salary; the corresponding transfer voucher must be attached to the letter of termination). If this dismissal is found by a court to be unlawful, the compensation will again amount to 33 days per year of service.

The deadline for bringing an action for protection against termination is 20 days after the notice of dismissal has been given. The first step in this procedure is a compulsory arbitration hearing.

6. Occupational safety plan

According to the Prevention of Occupational Risks Act, every company operating in Spain must assign one or more employees to fulfil the (various) duties related to occupational safety, or fulfil this obligation by concluding an occupational safety plan („plan de prevención de riesgos laborales“=PRL) with an appropriately specialised company (if not, there is a risk of fines and strict liability in case of occupational accidents).

7. Recording of working time

In Spain, the employer must ensure the daily recording of working hours. This must include the specific start and end times of the working day of each worker (both full-time and part-time) and must be signed by the worker each day. The records must be kept for four years and made available to workers, their legal representatives and - given the casel- the abour authorities.eitsbehörden zur Verfügung gestellt werden.