First impression on the new labour law reform


Dear clients,

Here I am again to comment on the new labour law reform, into effect since last 12th February 2012, which tries to make the labour market more flexible and, in consequence, try and reduce the rough unemployment rate in Spain. The controversy is served, but the reform is necessary and, in my opinion, looking to improve the latter labour scenario:

1. As means to favour the employment, temporary job agencies are authorised to act as job centers.

2. Training and apprenticeship contracts are modified: businesses with less than 250 workers are not liable to pay for National Insurance, in certain cases.

3. Improvement of the training of workers by an annual twenty-hour paid leave.

4. A contract to support enterprising persons or small businesses is created. It must be on permanent, full-time basis. The probation time cannot exceed twelve months (therefore, the contract can be terminated without any cause or compensation). In some particular cases the company may be entitled to tax and national insurance benefits.

5. Teleemployment or work from a distance is briefly regulated.

6. Benefits are settled when a training or a take-over contract is changed into a permanent one.

7. The employer can allot work irregularly to workers along the year and up to 5% of the total hours of work.

8. Reasons for geographical mobility of employees are more flexible now.

9. The arrangements to terminate a contract or reduce the work hours are more “agile”. No longer is permission from the Labour authorities necessary.

10. When technical, production, organization or economical causes take place, and if agreed by the employee and the employer, the terms and conditions included in their particular collective bargaining agreement can be modified (hours, wages, shifts, ...).

11. Priority given to the terms and conditions included in the collective agreement in regards with the basic wages, overtime, rota hours, holidays, etc.

12. Mass redundancy is made more agile as the authorisation from the Labour office is no longer a requirement.

13. Absenteeism from work is not referred to in general, for dismissal purposes, this is, from now on the absenteeism to be considered will be that of the affected employee.

14. The compensation from unfair or wrongful dismissal is reduced down to a 33-day salary per worked year, up to a maximum of 24 monthly wages for contracts entered into from 12th February 2012.

15. When unfair or wrongful dismissal, the procedure wages are eliminated, except in case of readmission.

16. Tax benefits for contracts on permanent basis in order to support enterprising employers or businesses: deduction of up to 3000 euros for the first contract to an employee under 30, on permanent, full-time basis and as long as the worker is kept at least three years; an additional variable allowance if the worker had been getting the unemployment benefit at least three months: the employer can deduct up to 50% of the unemployment benefit outstanding (to be paid to the worker in case he/she had continued unemployed), but no longer than twelve monthly payments.

Fdo. Adolfo Campos Fernández.
Economist & Lawyer

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