The financial crisis has prompted a large number of new laws aimed at bringing the Spanish labour market into line with the dire situation faced by many companies in this country. Though, clearly, the reform has not fulfilled its stated purposes it has nevertheless resulted in the implementation of changes designed to give greater flexibility to labour relations and guarantee the Spanish social security system. Below we list the most important new laws that have substantially reshaped the Spanish labour market:
- Definition of objective grounds
The reform began with theLaw 35/10 of 17 September, introducing a new definition of objective grounds for terminating or otherwise substantially amending a contract of employment, whether such grounds are of a financial, organisational, technical or production nature. Article 51 c) of the Spanish Statute of Workers, as amended, is intended to enable employers to act with greater legal certainty in these circumstances.
- Relaxation of formalities applicable to temporary collective dismissals
The Law 35/2010 introduces a number of important modifications to collective dismissals:
It widens the scope of the right to a discount in the amount of Social Security contributions paid by employers in connection with common contingencies.
- Greater number of cases in which a contract for the promotion of permanent employment may be entered into
Also, the Law 35/2010 increases the number of cases in which a contract for the promotion of permanent employment may be entered into. Apart from the cases listed in the First Additional Provision, there are now other scenarios affecting:
- Changes relating to training contracts
The enactment of Royal Decree-Law 10/2011, of 11 February, has resulted in the following changes to training contracts:
- Temporary removal of the 2-year limitation rule applicable to temporary contracts of employment
Pursuant to Royal Decree 10/2011, the applicability of section 15.5 of the Spanish Statute of Workers is suspended for two years. This means that an employee may now be a party to any number of temporary contracts of employment beyond the 2-year limitation stipulated in section 15.5 of the Spanish Statute of Workers.
- Collective bargaining reform
Pursuant to Royal Decree-Law 7/2011, of 10 June, collective bargaining agreements may be extended between 8 months and 2 years upon expiry, depending on their original term. Upon the expiry of the extension the parties must refer the matter to binding arbitration. Also, company-level CBAs take now priority over provincial CBAs.
- Reform of the pension system
The Law 27/2011, of 1 August, has turned the Spanish pension system upside down, particularly in regards to retirement pensions. The key changes are as follows: