- The term of temporary contracts for specific jobs or services is limited to 3 years, which may be extended by another 12 months under the sector’s collective bargaining agreement. After that time, if the worker continues in the company, the contract becomes permanent.
- In successive temporary employment contracts which, due to their term (24 months in a given period of 30 months), convert the contract into permanent, the Reform includes that the successive employment contracts can be not only in one company, but also in different companies of the same groups and in cases of transfer of undertakings. The employer will have 10 days from the automatic conversion of the contract into permanent to give the employee a document verifying that (s)he is now a permanent employee.
- The causes for dismissing employees under a Collective Redundancy Procedure have been made more flexible. Among economic causes is a decrease in profits, not only losses. Technical, organizational, or production causes are allowed, not as before to guarantee the viability of the company but to improve the organization of resources and strengthen the company’s competitive position. In any event, the company must verify the reasonableness of the measures. It is recommended that workers be relocated or enter training to improve their chances of finding employment. The term for the negotiation process with the workers’ representatives has been shortened. The process cannot exceed 30 days (15 days for companies with less than 50 employees). The agreement reached must be validated and the dismissals authorized by the Labor Authorities. The authorization period is shortened from 15 to 7 days.
Employees in companies in which workers have no legal representatives are allowed to designate a commission democratically from among the employees of the company or from among representatives of the most or sufficiently represented trade unions.
- In order to make an employee redundant on the basis of absenteeism, the Reform has reduced the percentage of time which all employees lose due to absenteeism from 5% to 2.5%. This is in addition to the individual worker’s allowed absences (20% of working days in a given period).
- The period for consultation with the workers’ representatives for collective geographical mobility is reduced to 15 days for collective transfers. In companies in which workers have no legal representatives, the consultation may be carried out through a commission democratically designated by the workers from among the employees of the company or among representatives of the most or sufficiently represented trade unions.
- Substantial changes in working conditions may be made to prevent the deterioration of the company’s situation, besides improving the company’s situation and perspective through a better organization of resources.
The consultation period with the workers’ representatives is reduced to 15 days for collective changes. In companies in which workers have no legal representatives, the consultation may be carried out through a commission democratically designated by the workers from among the employees of the company or among members of the most or sufficiently represented trade unions. In such event, the designation must take place within 5 days of the beginning of the consultation period.
Any change to a collective bargaining agreement is limited to the term of that collective bargaining agreement and will always be temporary. For such changes, if no agreement can be reached with the workers’ representatives, the out-of-court settlement mechanisms established in the collective bargaining agreement must be used.
- The salary increases provided for in the collective bargaining agreement may remain unapplied when, otherwise, the company’s economic situation and perspectives could suffer and thus affect the maintenance of jobs.
If an agreement is reached with the workers’ representatives, it shall be assumed that the stated causes exist, and the agreement may only be challenged in the event of fraud, willful intent, coercion, or abuse of the law.
The agreed salary increases may only be left without application for the term of the collective bargaining agreement and, in any event, no more than 3 years.
- Salary in kind may not exceed 30% of an employee’s salary, even for top management. Salary in kind may not lower a worker’s total salary below the minimum wage.
Together with these modifications, the Reform also included measures on refund of social security contributions for employment contracts of certain group of employees who experience reemployment difficulties. Anyhow, it is expected that a second package of employment measures will be passed during the following months.Isabel Puig, Associate at Baker & McKenzie Barcelona