SUMMARY OF THE LABOUR
MARKET REFORM OF FEBRUARY 2012
ROYAL DECREE-LAW OF 10 FEBRUARY, ON
URGENT MEASURES TO REFORM THE LABOUR MARKET
Implementation and scope of the reform
The labour market reform, which entered into force on 12 February
2012, introduces some very important changes in the regulations
governing the Spanish labour market.
Royal Decree-law 3/2012 of 10 February, on urgent measures to reform
the labour market (“RDL 3/2012”), significantly modifies the
institutional framework of Spanish labour relations. Some of the main
changes introduced include removing the need to obtain administrative
authorisations in collective dismissals, reducing the compensation for
unfair dismissal from 45 to 33 days per year of service, and eliminating
back pay and the so called “express dismissal”.
Main aspects of the reform
Below is a summary of the main changes introduced by the reform:
- Temporary employment agencies will now also be able to operate as
- A “training account” linked to the Social Security registration
number has been created. The account will keep a record of the
training received by each worker during his or her professional
career. The right to training is expressly acknowledged, as well as
the right of workers to receive the necessary training in order to
adapt to the changing circumstances of their post.
- Vocational training contracts have been amended for the third time
in less than two years, to reduce social security contributions paid
- A new type of contract has been created: the “indefinite
employment contract to support entrepreneurs”. Companies with less
than 50 employees can benefit from this type of contract which has a
one-year trial period.
- Part-time contracts have been amended to allow the inclusion of
- Telecommuting or home working is regulated for the first time.
- The transformation of certain contracts (e.g., training,
hand-over) into indefinite contracts is now subsidised.
- The professional classification system now only applies to
professional groups, not to professional categories.
- In the absence of an agreement, a company may distribute 5% of the
working day during the year as required.
- Amendments in the following areas have been approved to promote
internal flexibility in companies as an alternative to terminating
employment contracts: (i) geographic and functional mobility; (ii)
substantial changes to employment conditions; (iii) suspension of
contracts or reduction of working hours due to economic, technical,
organisational or production reasons, removing the need to obtain an
administrative authorisation and extending unemployment benefits; (iv)
the non-application of certain employment conditions set out in the
applicable collective bargaining agreements is no longer limited to
salary conditions, and in the event of a disagreement, either party
may submit the discrepancy to arbitration by the National Consultation
Committee for Collective Bargaining Agreements, or similar bodies in
the autonomous regions; (v) the primacy of the company collective
bargaining agreement in certain areas, which cannot be counteracted
with inter-professional agreements, or state or regional
sector-specific collective agreements; and (vi) the so called
“ultra-activity” of the collective agreement is limited to two years
from the termination of the agreement.
- The end of the suspension period of the rule on linking temporary
contracts is brought forward to 31 December 2012.
- An administrative authorisation is no longer required for
collective dismissals and new reasons are established to carry out
these dismissals: forecasts, which are so difficult to prove, are
removed with a view to limiting the courts’ control over business
- The compensation for unfair dismissal is reduced from 45 to 33
days per year of service. This eliminates the “contract for the
promotion of permanent contracts”.
- “Express dismissals” and back pay are eliminated, except in
reinstatement cases, or when dealing with employee representatives.
- The payment by the Spanish Salary Guarantee Fund of eight days’
compensation in the event of objective or collective dismissal is now
limited to companies with less than 25 employees, and excludes unfair
- Dismissals for financial, technical, organisational and production
reasons in the public sector are clarified and certain specificities
are established in commercial and senior executive contracts in the
- Rules are established for credit institutions on compensation and
suspension and termination of contracts.
information contained in this Newsletter is of a general nature and does
not constitute legal advice