Hire in Spain

Employers and employees are free to negotiate the terms and conditions of their employment relationship. However, employees retain various minimum rights under the law, regardless of any contrary language in an employment agreement. These minimum working conditions are set forth in the Workers Statute and the applicable collective agreement, among other documents.

Where a probation period is agreed (provided that the worker has not performed the same functions before at the company under any type of employment contract, in which case the trial period would be null and void), it must be put in writing.

The time limits for trial periods may be established in the respective collective bargaining agreement and vary from 3-6 months. However, as a general rule and in the absence of any provision in the collective labor agreement, the probationary periods cannot exceed:

• Six months for college and junior college graduate specialists.
• Two months for all other employees.
• At companies with fewer than twenty-five employees, the trial period for employees who are not college or junior college graduate specialists cannot exceed three months.
• One month in the case of temporary fixed-term employment contracts which are less than six months. Moreover, training contracts, indefinite-term employment contracts in support of entrepreneurs and special employment contracts (domestic workers, senior managers, among others) have their own specific trial periods.

During the trial period, the employer or the worker can freely terminate the contract without having to allege or prove any cause, without prior notice and with no right to any indemnity for either the worker or the employer.

A worker may be posted to a higher level position for a maximum of six months. They must rejoin his/her original work group or be promoted at the end of the six months.

If the worker has already worked with the employer in the same functions, or in the case of contract subrogations, there cannot be a probation period.

The Spanish working time regulations state that employees must (Workers’ Statute):

• Not work (on an annual average) more than 40 hours a week. (Maximum working hours may differ as per Collective Bargaining Agreement)
• Not work more than nine hours a day.
• Be given at least 12 hours’ rest before starting the next day’s work.

In the month of August, working hours may not exceed 36 hours per week (‘jornada intensiva’). The remaining 4 hours per week (total 16 hours for 1 month of August) is to be fulfilled throughout the year. If the employee has a preference to work 40 hours per week in the month of August, it is recommended to sign an agreement of mutual understanding on this.

Rest time

Employees required to work more than six uninterrupted hours are entitled to a minimum 15­-minute break. Exceptions to these rules may apply for employees in certain industries and other specified employment relationships (such as senior executives, security guards or hospitality workers). Employees shall have the right to an uninterrupted minimum weekly break of one day and a half that may be accumulated for periods of up to fourteen days, which shall include Saturday afternoon or, as applicable, Monday morning and the whole day of Sunday.

As a general rule, overtime hours are of voluntary acceptance by employees, with exceptions made for specific individuals and an applicable collective agreement. Overtime must be pre-approved by the company and can only be worked under below circumstances:

• To prevent or repair accidents, or other extraordinary and urgent damages.
• Peak production periods, unforeseen absences, shift changes and other circumstances of a structural nature

According to statutory law, overtime cannot exceed 80 hours per year. In addition, there is a form of overtime that is considered as force majeure, wherein overtime is required due to the need to prevent or repair accidents, or other extraordinary and urgent damages. This type of overtime is mandatory for the employees and will not be taken into account for the annual maximum limit.

Employers must pay employees two “extraordinary bonuses” (‘gratificaciones extraordinarias’) each year. As a rule, one bonus is required to be paid at Christmas and the other in a month specified by an applicable collective agreement or an agreement between the employer and employee representatives. However, a collective agreement may provide for the bonuses to be paid in monthly installments. The law does not set the amount of the bonuses. This is instead left to collective agreements to decide. In practice, each bonus is usually equivalent to one month’s pay.

In Spain, bonuses are defined as salary supplements in Article 26.3 of the Workers’ Statute (‘Estatuto de los Trabajadores’). This remuneration scheme is either based on company performance or on the employee meeting certain objectives. At the outset, the company should set the requirements that entitle an employee to receiving a bonus. The employer must ensure their employees are aware of the conditions and objectives that must be met in order to receive a bonus. Workers are entitled to receive payment of bonuses even if the employer has violated the disclosure obligations. Since a bonus has a salary nature, it must be included in the compensation in case of dismissal. There are only two possibilities that allow not including it:

• if both parties have agreed not to include the bonus
• the bonus was paid in exceptional circumstances (regardless of the achievement of certain goals)

Grounds for termination in Spain include the following: 

• Mutual consent of the parties
• Grounds established in the contract
• Expiration of the contract term or completion of the specific job
• Employee resignation
• Death or permanent illness
• Retirement of employee
• Employer’s death, retirement or permanent illness
• Force majeure that makes it impossible to continue rendering services
• Collective dismissal based on objective grounds
• Employee’s voluntary departure based on a breach of contract (by the employer)
• Dismissal of employee

Collective Dismissals:

Terminations based on economic, technical organizational or productivity grounds are deemed collective when:

• 10 workers are affected in companies with less than 100 workers
• At least 10% of the employees are affected within a period of 90 days in companies that have between 100 and 300 workers
• 30 workers in companies with 300 or more workers

Individual Dismissals:

Reasons for objective dismissal:

• Worker’s incompetence
• Worker’s inability to adapt to technical change
• Lack of attendance at work
• Layoffs based on economic, technical, organizational and or productivity grounds.

Labor courts are very restrictive in accepting dismissal based on business grounds. Hence, this procedure is very seldom used unless the grounds are absolutely clear (e.g., bankruptcy).

Reasons for disciplinary dismissal:

• Repeated and unjustified lateness or absences
• Lack of discipline or insubordination
• Verbal or physical offense towards the employer, other people working in the company or residing family
• Contravention of contractual good faith and misuse of trust
• Continuous and voluntary decrease of the worker’s typical or agreed performance
• Intoxication due to alcohol or drugs (if causing a negative effect at work)
• Harassment based on race, religion, birth, gender, age, disability, opinion, social condition and sexual orientation

Disciplinary dismissals must be communicated by a written letter to the worker clearly and sufficiently stating the facts that motivated the dismissal and the date on which the dismissal will take effect.

The Labor Law requires that the party seeking to terminate an employment agreement provides the other party with a minimum of 15 days’ notice prior to termination. The parties involved in the contract may agree upon longer notice periods.

A disciplinary dismissal does not entitle an employee to receive any compensation in the form of a severance payment from the company, unless a court ruling declares the dismissal unfair.

The severance pay resulting from an objective dismissal is a tax-free payment in the amount of 20 days’ salary per year of service. This can total up to 12 months’ salary. If the dismissal is deemed unfair by the judge or acknowledged as unfair by the company before the conciliation chamber or the court, the relevant tax-free severance is 33 days’ salary per year of service up to 24 months’ pay.

Severance compensation is calculated under two criteria: Seniority and daily salary. In case of objective or unfair disciplinary dismissal the severance will be calculated by multiplying the seniority by the daily salary and the days (20 in case of objective dismissal/ 33 in case of unfair dismissal). The daily salary is calculated taking into consideration the 12 last payments, and the company shall include all salary concepts, including salary in kind and extra-hours. Therefore, bonus, incentives and irregular payments are included. Only extra-salary concepts should be excluded. Stock Options are salary and are included in the computation for indemnity.

To meet with provisions set out by the European Court of Justice in 2019, companies should implement an objective, reliable and accessible system that allows recording of the daily workday performed by each employee.

Definition

Restrictive Covenants are bilateral agreements signed between an employer and an employee. They are used to protect key business information. However, they can be deemed to represent a limitation of the right to work and the free choice of profession or trade. Hence, any restriction of this constitutional right must be performed in compliance with all requirements established by labor law. Non-competition rights and obligations are regulated in Spain’s Statute of Workers.

Types of Restrictive Covenants:

Non -Compete Clauses

Non-competition agreements are intended to prevent an employee from working in a competing company or sector following the termination of employment. A non-compete obligation following the termination of the employment contract (which must not last longer than two years for technicians and six months for other workers) will only be valid if both of the following requirements are met:

• the employer has an effective industrial or commercial interest in such non-compete obligation
• the employee is paid adequate economic compensation

Non -solicitation of customers

Agreements on the non-solicitation of customers are not specifically regulated by Spain’s labor laws but case law has considered these types of agreements valid within the scope of the non-compete clause as described above.

Non -solicitation of employees

Spanish Labor Legislation does not specifically regulate this type of restriction but case law has considered this restriction valid within the scope of the non-compete clause as described above.

Enforcement of Restrictive Covenants —process and remedies:

If the employee breaches the non-competition agreement, he or she will be required to return the amount received for this concept and may be required to pay damages (should the company provide evidence of damage). If there is doubt when determining the amount of compensation to be returned or if the employee refuses to comply with the agreed payment as compensation, the employer can appeal to a social court or an arbitrator (when specifically agreed) to settle said amounts. Likewise, the employee can file a claim against the employer if the agreed compensation was not paid. However, the non-compete clause remains in full effect. The clause itself can be declared void if the legal requirements explained above were not met. However, the agreement can be canceled if both parties agree to it. However, it can not be canceled or waived unilaterally.

The Spanish Constitution gives unions the authority to promote and defend the economic interests of workers. It also empowers unions to represent workers in collective bargaining and to engage in the preliminary mandatory conciliation steps before disputes can be presented to government conciliation agencies.

Freedom of association and representation are fundamental rights provided in the Spanish Constitution. All employees (except senior executives such as general managers) are represented by the elected representatives. There is no distinction between blue and white-collar representatives in Spain. There are two types of employees’ representation, depending on the company’s size: individual delegates and works councils.

In principle, employment contracts are presumed to be for an indefinite term. There are, however, a limited number of definite-term employment agreements. If the employee continues to work past the original term of the temporary agreement, the relationship becomes indefinite in time and the employee becomes entitled to the standard severance upon termination. Fixed term contracts are very restrictive and highly controlled, we require valid reasons for Fixed Term Contracts, and they limited to the following scenarios:

• To deal with an increase in the company’s workload, resulting from market circumstances, backlog of work or an excess of orders (an applicable collective agreement may identify the relevant activities and stipulate the proportion of a company’s workforce that can be employed on fixed-term contracts for this reason).
• For any of the above reasons that justify signing FTCs, you can use FTCs within 18 months from the moment the cause arose (i.e. 18 months from the time when the overload started). The maximum term for the FTC is 6 months, which can be extended for another six (depending on the Collective Bargaining Agreement). Fixed term contracts cannot be made for the same position, whether to a same or different person.

Employers in Spain must pay their employees on a monthly basis, or more frequently depending on the employment contract or collective bargaining agreements.

The total annual compensation package will be divided into 14 months:

• 12-month salary
• 13th month in June
• 14th month in Christmas

The 13th and 14th month must be paid within the 15 and 20 of each month. If the employee has not worked for the whole month, it will be calculated and prorated.

All payments must be made by cheque or direct bank deposit, and, for payments made by cheque, the employer must provide a payslip with the amount of payment and withholdings to be signed by the employee.

The employee will typically receive an official monthly payslip (‘nómina’) by the end of each month. This legal document proves the contractual relationship with the employer and the exchange of the provided services and payment. The employee must sign two copies, one of which is kept by the employer and the other one is for the employee. The payslip is separated into three distinct sections:

• Header which must include information about the employer and employee
• Body which contains information about the worked period, earnings and deductions
• Footer which contains information about the rates used in calculating the payment

Annual leave is set in collective bargaining agreements or individual contracts and may never be less than 30 natural calendar days (which normally equates to 23 working days). It may not be replaced by financial compensation. Leave entitlement is reduced proportionally for periods of employment for less than a year. Wherever possible, the holiday calendar is established in each company by mutual agreement between workers and employers.

Carry Over Rules: Companies normally would allow vacations that have not been enjoyed in the year to be rolled over to the first quarter of the following year.

Any sick leave compensation depends on the length of the absence:

• The first 3 days of the sick leave: the company will pay.
• From the 4th to the 15th day of the sick leave: an allowance consisting of 60% of the calculation basis is to be paid by the company.
• From the 16th to the 20th day of the sick leave: an allowance consisting of 60% of the calculation basis is to be paid by social security.
• From the 21st day of the sick leave: an allowance consisting of 75% of the calculation basis is to be paid by social security.
• If an employee is absent due to an accident at work, employers must make a payment of 75% of salary, but this is then reimbursed to the employer by Spain’s National Institute of Social Security.

The company pays the corresponding amount to the worker and this amount is refunded by social security to the company.

A minimum previous contribution period of 180 days’ worth of social security contributions in the previous 5 years has to be fulfilled for the Spanish Social Security covers part of the worker’s salary, except where the incapacity is due to an occupational illness or accident at work.

A worker’s period of sick leave cannot exceed one year; however, the National Institute of Social Security (INSS) may extend the sick leave by 6 months if it considers that the worker can recover in that period of time.

** Please refer to collective bargaining agreement as this can be more favourable than the minimum terms set out above.

In the following circumstances, employees are entitled to receive their full salaries for the periods indicated:

• Fifteen calendar days in case of marriage and civil partners duly registered;
• Four days of paid leave in cases of force majeure, where the employee’s absence from work is necessary for urgent and unforeseen family reasons and where illness or accident makes the employee’s immediate presence crucial.
• The time required to comply with a public obligation (e.g., voting or jury duties);
• One day for moving to a new residence;
• For tests and examinations prior to childbirth, and training prior to adoption or fostering, whatever time is needed where this coincides with working hours;
• For premature births involving hospitalization of the newborn, one hour per working day;
• For breastfeeding children under nine months of age, workers are entitled to one hour of absence from work per day, or half an hour if taken at the beginning or end of the working day. This leave may be taken either by the mother or the father, if both are working;
• For legal guardianship of a child under 12 or of a person with a disability, reduction of the working day by between one-eighth and one-half;
• To fulfill public and personal obligations (jury duty, appearance in court, etc.), as long as necessary;
• To perform trade union or workers’ representation duties, the time established by law or collective agreement.

In all cases, to exercise their right to leave, workers must notify the employer in advance and provide proof of the reason for their absence.

Employees are entitled to 5 days paid leave for a serious accident or illness, hospitalization or outpatient surgery that requires recovery at home suffered by (i) persons who live with the employee, (ii) civil partners of the employee, and (iii) relatives of the civil partner.

Workers are entitled to request leave to care for family members for:

• the maximum duration of three years to care for each child
• one year (which is extendable by collective bargaining agreement) to care for a blood relation or relation by marriage up to the second degree or similar, who for reasons of age, accident or illness cannot look after themselves and do not perform paid work.

Handicapped Family Member Leave

The Statute of Workers also guarantees employees unpaid leave of up to two years to take care of a close family member (parent, child, sibling, grandparent, grandchild, aunt, uncle, first cousin, niece or nephew) in the event the family member is handicapped or is deemed by the health authorities to be unable to execute the most basic activities of daily living without help from a third person.

Voluntary Unpaid Leave

Employees with at least a year’s tenure are entitled to the voluntary unpaid leave of between four months and five years. Following the exercise of this right, no other voluntary unpaid leave may be taken for four years. Following unpaid leave, the employee is entitled to be reinstated in their previous professional category but not necessarily in the same position. Time taken for unpaid voluntary leave is not accounted for in the calculation of seniority.

A new Royal Decree introduced a novelty in paid leaves for birth and adoption, which applies to all births occurring after April 1, 2019. This regulation aims to achieve effective equality between men and women in employment in the promotion of personal and family life, allowing time for both parents to enjoy the leave for birth and adoption. The term “paternity leave” has been replaced by “partner leave,” referring to the parent other than the biological mother.

Maternity & Partner leave: 16 weeks. The mother & father must take 6 of these weeks immediately after the birth or adoption. The remaining 10 weeks can be organised at the parents’ discretion (to be taken in blocks of 1 week) until the child is twelve months old. The biological mother can commence maternity leave up to four weeks before the expected date of birth.

Unpaid parental leave: Employees are entitled to up to 8 weeks of unpaid parental leave to care for a son or daughter, or a child who has been fostered for more than a year. This leave may be taken until the child reaches the age of eight. This leave may be taken continuously or in segments, in a flexible manner, and it cannot be transferred to another individual.

Reduction of working hours: The employee (mother or father) have a right to ask for a reduction of working hours if they have a child younger than 12 years old. In this case, the employee will only receive the salary according to the base hours worked. The company cannot dismiss the employee, or the dismissal can be declared invalid (“nulo”).

Adoption rights: Each adoptive or foster parent receives 6 weeks of mandatory uninterrupted leave which they should take during the first 12 months after the child comes into their home. The law extends this leave on a voluntary basis for up to 16 weeks for each adoptive parent, and two extra weeks for each additional child. Also, one parent can leave the other parent up to 6 weeks of their leave.

Pregnancy leave: Pregnant workers shall have the right to be absent from work, with the right to remuneration, to carry out prenatal examinations, but the employer has to be informed in a timely manner.

Nursing leave: Workers who are nursing a child under nine months of age shall be entitled to one hour of absence from work at a time to be chosen by them, and which may be divided into two parts, one at the beginning and one at the end of the day. The worker must notify the employer fifteen days in advance of the date on which she will return to her usual working hours. It is also permissable to accumulate this leave which normally equates to 15/20 days off.

Each municipality is allowed to declare a maximum of 14 public holidays per year; up to ten of these are chosen by the national government, two from the autonomous community and two from the municipality.