Updated: Nov 29, 2021
In this article, we will look closely on basic types of employment their essence and functionality, according to Workers Statue Law in Spain.
The main thing that needs to be mentioned in this context is that in Spain, as in other countries, we will find the possibility to conclude a contract orally or in writing. It is only permitted to conclude a contract orally, which is very rare, if the duration is less than four weeks due to production conditions. All other variants of contracts are concluded in writing. The contract of employment shall contain the following points:
the identification details of the company and the employee;
the address of the company and the place of work;
the date of commencement of employment, in the case of a fixed-term contract, the expected date of termination of employment shall also be indicated;
the professional classification and characteristics of the post and the tasks to be performed;
working conditions such as: basic salary plus allowances, dates and method of payment, working time, duration of leave and why in some cases it is fixed by the employer, etc.;
a probationary period which may be required but not compulsory, but in this case, its maximum duration shall be 6 months for qualified technicians and 2 months for other staff;
mutual periods of notice for the termination of employment; collective agreement, if applicable.
After the contract has been signed by both parties, the employer must inform the public employment services of its content and possible extension of the contract.
Temporary and indefinite contracts
The contract between a worker and an employer can be indefinite or temporary. Temporary contracts are usually terminated by the date or date of termination agreed in the employment contract. According to the law, this period can be extended. We can divided them into:
Fixed-term contracts (Article 15.1 of the Workers' Statute): Contractors for specific work and service, Eventual contract, Interim contract. The contract for a specific work or service and the eventual contract due to production circumstances may be entered into full-time or part-time.
Training contracts (Article 11 of the Workers' Statute): Training and apprenticeship, Internship contracts.
As we mention before, first of the temporary contracts are fixed-term contracts, where belongs:
1. Contracts for specific work and service (Article 15 of the Workers' Statute): definition by Workers' Statute reads as follows: “The worker is hired to carry out a specific work or service, with its own autonomy and substantivity within the activity of the company and whose execution, although limited in time, is in principle of uncertain duration. The duration is related to the time that the cause for which the contract was made is maintained.“This type of contract can be done both full-time and part-time. We can describe them as contracts most used in Spain. The interesting thing about those contracts is that they mostly do not have an end date, but simply they end when the work ends. Also, if an end date is available the contract must continue if the work continues.
2. Eventual contract. They are closed when market circumstances, the accumulation of tasks or excess orders or to cover vacations. Eventual contracts may have a maximum duration of six months, within a period of twelve months.
3. Interim contract. They are used to replace workers with the right to reserve work, provided that the employment contract specifies the name of the replaced work. On the other hand, it can also be used to temporarily fill a job during the selection or promotion process of that position.
Furthermore, there are also the training contracts (Article 11 of the Workers' Statute) divided into two main sections:
1. Training and apprenticeship contract. Those types of contracts mean alternate work with theoretical training for unskilled workers in order to obtain vocational training. Contracts are concluded with workers over the age of 16 and under the age of 25 (and under 30 years of age, unless the unemployment rate falls below 15%) , without professional qualifications obtained and recognized by the vocational training system for employment or the educational system, and persons without qualification for the implementation of the internship contract. The duration established in the Workers' Statute is minimum 1 year and maximum 3 years.
2. Internship contracts. The internship work contract is a temporary contract, within the so-called training contracts. The aim is to provide the employee with professional experience in relation to his/her academic education. In this sense, the work performed must enable the worker to acquire practical knowledge appropriate to the level of study, it means there must be a correlation between the worker's qualification and the work actually performed.
On the other hand, the indefinite employment contract is one that is carried out between the employee and the employer without establishing a term or an end date for the employment relationship. Its division is on the permanent contract and the discontinuous fixed contract.
1. The permanent contract (Article 8 of the Workers' Statute): This type of contract is one of the basic contracts for an indefinite period, which means without an end date. It is worth mentioning that these employment contracts must be concluded in writing, although others are allowed to conclude them orally. From the employee's point of view, there are many advantages, such as - job stability, better pay compared to temporary workers, the same employment rights as temporary workers.
2. The discontinuous fixed contract (Article 16 of the Workers' Statute): The discontinuous fixed contract is an indefinite contract in which is a discontinuity in the activity. In other words, they only work for a period of time a year, but the need is permanent, so the company has the obligation to call the worker every year to perform the tasks for which they have been hired. The working day must be full-time (more about full-time and part-time jobs in the next section).
This type of contract must also be formalized in writing, but it is much more complicated because the contract must contain:
· the estimated duration of the activity,
· the estimated working day and its timing,
· the form and methods of appeal against the signed agreement set out in the relevant collective agreement.
And what is the difference between the fixed-discontinuous contract and temporary contract? In nutshell, a temporary contract means an extraordinary or eventual need that is not repeated permanently every year. In the fixed-discontinuous contract, the need is repeated on certain dates.
Definition of full-time and part-time job
According to Spain labour laws, full-time work is based on a maximum of 40 hours per week with at least 12 hours rest between the end and the start of the working day. it is also the employer's duty to allow you a 15-minute break after 6 hours of work on a working day.
In Spain you are entitled to minimum weekly rest time of one and a half uninterrupted days. This usually includes Saturday afternoon or Monday morning, and all of Sunday.
Part-time work means work that is not considered to be a full-time job, that is when the work is done less than 40 hours a week. Salary of part-time workers depend on the working hours and the average hourly wage stated in the contract, as well as on where the work will be performed and how long the employment will last.
Part-time work can also be combined with some other types of work, such as:
Job-sharing, which means one working say divided into two part-time jobs
Part-time parental leave, which means a parent works part-time besides their work in the home
Progressive retirement, which means reduced working hours for employees nearing retirement
Part-time workers are used to having time and energy for other activities. This type of job is really appropriate for people like young moms and dads, students, retirees and all other who can’t work, or don’t need, a full-time job.
Seasonal work is characterized by its dependence on the seasons, which means that performance is linked to the season and for which it is necessary to temporarily increase the number of employees. It is important to mention that the length of the employment may not exceed six months within a twelve-month period. This length determined paragraph about Eventual contract due to production circumstances in Article 15 of the Workers Statue Law.
This type of work is increasingly used in connection with the development of tourism. With the approaching summer season in Spain, at the time of the greatest tourism in June, July, August, there is a growing need for a certain group of employers to work, for example, in agriculture, food, forestry and construction.
Seasonal work is a good way to experience another country to see whether you would like to live there long-term at some time in the future.
A self-employed person is someone who carries out an economic activity independently, outside the management and organisation of another person, and who can employ other workers. One of the main things is to understand the legal structures for self-employed people in the Spain. There are two ways to explain an independent trade:
1. Self-employed entrepreneur (Autónomo Empresarial): Self-employedentrepreneur is a one-person company. Entrepreneur work as a sole trader in trading or commercial and he is the person who manage his own work and therefore take personal responsibility for all his liabilities. This legal structure is more suitable for small businesses that won't generate large annual income or hire many workers.
2. Freelance professional (Autónomo Profesional): Freelance professional is a person who regularly undertakes work in exchange for remuneration but is not under an employment contract with any employer. In addiction, it has the same responsibilities as a self-employed entrepreneur but will not always operate as a one-person company; e.g. when the work is irregular and income from it does not meet the national minimum salary (1108 € in 2021).
In order to commence the implementation of self-employed persons, it is necessary to complete certain formalities:
Declaración Censal de Inicio de Actividad (start-up declaration) at the local provincial Delegación de Hacienda (tax office).
Registration in the social insurance scheme Seguridad Social, under the special regime of the Autonomous Regions, at the general treasury of the local provincial Social Insurance Agency.
Registration of patents, designs, designs, name, sign and trade mark in the intellectual property register.
In case of opening of business premises, it is necessary to apply for a self-governing licence and the Employment Office in the Autonomous Region must also be informed.
As an autónomo (self-employed), your responsibility is also to pay attention to the administration work, including invoicing and tax returns. Generally, your responsibility is to fill VAT returns on a quarterly basis, as well as to keep track of your monthly social security payments. And the most important is that you must keep your records according to the basic standard required by Spanish law.
However, there is no difference between the assets and liabilities of a business owner. Therefore, the owner is personally liable for any debts incurred during its existence. On the other hand, if you want to separate your personal and business assets, then you will need to register a limited company, or a sociedad limitada. This requires an investment of €3,000 and your liability extends only as far as the investment you have made. Although this process is similar to the procedure for the self-employed, it is more complicated as businesses have to go through additional registrations.
The exact definition should be laid down in Law 20/2007 of July 11, approving the Statute of Independent Contractors and reads as follow: “Independent contractors are natural persons who carry out, on a regular basis, personally, directly, on their own account and outside the sphere of management and organization of another person, an economic or professional activity for profit, whether or not being employed.”
To make things clear - being an independent contractor is one way to be self-employed and the difference between self-employed person and an independent contractor is really small.
An independent contractor is someone who provides a service on a regular basis - for example, an independent contractor may be hired to create custom-made piece of clothing, but someone who creates clothes with no particular client in mind and sells them in a store is not an independent contractor. There are many different types of independent contractors, as well as the wide range of industries in which an independent contractor can operate.
Basically, the work of an independent contractor is not limited to several types of positions or projects, that means you can find a job as an independent contractor for anything. It is important to ensure that it must be clear that the person is not an employee and has good control over when and how he works on the project if the independent contractor is assessed.
As mentioned above, the work of independent contractors involves different types of business. For example, an individual may work as an electrician, plumber, mechanic, carpenter or maybe some hairdressers and nail technicians also perform their work as independent contractors and not as employees.
Be careful, it can be very risky for international employers to hire foreign independent contractors because your idea of a contractor and Spain’s idea of a contractor are often quite different.
The specific type of independent contractor is consultant, which means person who is usually expected to give solutions. It is assumed that he/her has very good knowledge of the field (market, standards, procedures). In general, consultant may help individuals or clients with any type of need, as long as the consultant has a relevant experience and expertise. They are mostly focused on consultancy projects like some business consultant or coach, helping business owners start, expand, or improve their businesses. Also well know are financial consultants or advisors, helping businesses or individuals to decide how to invest or save money.
To sum things up, the Spanish economy is, according to EURES - the European job network, the fourth largest in the euro zone, the fifth largest in the European Union and the fourteenth in the world in terms of nominal gross domestic product (GDP). It is also known for its large labour market and vacancies. Nevertheless, Spain has the second highest unemployment rate in the European Union with a high number of temporary jobs and seasonal workers, which represents the greatest weakness in the Spanish economy.
Spain’s business structure consist of small business units. In fact, eight out of every 10 companies in Spain has two or fewer employees. The largest percentage of small enterprises is in the services sector, especially in trade. It indicate that quite a lot persons see a great opportunity to built up their business in Spain as an autónomo (self-employed).
In contrast, large companies are concentrated in the industrial sector and many of them are main international players in sectors related to infrastructure development, renewable energy, tourism, banking, insurance, the textile industry, health technology, the agri-food sector, and the car industry. This open hundred of thousands job opportunities and job positions in those sectors.
Unfortunately, Spain's labour market was one of the worst-hit by COVID-19 worldwide. In March 2021, after one year of pandemic COVID-19, Spain recorded over four million people unemployed for the first time since 2016. Coronavirus highlighted the weaknesses of the Spanish labour market, such as the high percentage of temporary positions and the prevalence of precarious employment. According to research by (BBVA Banco Bilbao Vizcaya Argentaria) the impact may be permanent.