Royal Decree-Law 32/2021 of 28 December: Labour Reform

Royal Decree-Law 32/2021 approving the labour reform has been published in the Official State Gazette (BOE) on 30 December 2021.

The most important aspects of this reform can be summarised as follows:

  1. Temporary contracts are abolished, establishing only the possibility of making temporary contracts in two cases:
  1. Production circumstances:

A. occasional and unforeseeable increase and fluctuations that generate a temporary mismatch between available stable employment and that required (including holidays).

Term: maximum 6 months, extendable to 1 year by sectoral collective agreement.

B. to deal with occasional and foreseeable situations with a reduced and delimited duration.

Term: maximum ninety days (non-continuous), regardless of the number of persons required to deal with the specific situations on each of these days.

  • Replacement of a worker with a job reservation.

2. Contracts for specific works and services, temporary contracts due to market circumstances, backlog of tasks or over-ordering and interim contracts formalised before 31 December 2021, as well as permanent works contracts in force on the aforementioned date, shall be applicable up to their maximum term.

Contracts for specific works and services and temporary contracts due to market circumstances, backlog of tasks or over-ordering, formalised from 31 December 2021 to 30 March 2022, shall be governed by the legal or contractual regulations in force on the date on which they were concluded and their duration may not exceed six months.

3. Fixed-term contracts of less than 30 days shall be subject to an additional contribution to be paid by the employer at the end of the contract.

4. The training contract is modified, establishing two types of contracts: work-link training and professional practice.

5. The cases of discontinuous permanent contracts are extended and the compensation to be received in the event of dismissal is increased, as it is established that its seniority will be calculated taking into account the entire duration of the employment relationship and not the time actually worked.

6. The collective bargaining agreement applicable to contractors and subcontractors will be that of the sector of the activity carried out in the contract or subcontract. The company agreement may only be applied by the contractor if it determines better wage conditions than the applicable sectoral agreement.

7. The RED Mechanism for Employment Flexibility and Stabilisation is established to allow companies to apply for measures to reduce working hours and suspend employment contracts.

8. In relation to collective bargaining agreements, ultra-activity is restored on an indefinite basis.

The information contained in this note should not be considered in itself as specific advice on the subject under discussion, but only as a first approximation to the subject matter, and it is therefore advisable that the recipients of this note obtain professional advice on their particular case before adopting specific measures or actions.

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