Employment contracts are agreements that are concluded between workers and companies to establish working conditions and regulate this agreement between both, which contains a series of rights and obligations for both parties. In this blog we will detail the different types of employment contracts and their characteristics, all of this after the entry into force of the labor reform on March 31, 2022 (Royal Decree – Law 32/2021, of December 28). These reforms are urgent measures that were created in order to guarantee employment stability and transformation of the labor market. Let us begin.
We can find 4 types of employment contracts:
Work contract UNDEFINED.
Work contract TEMPORARY.
Work contract FIXED DISCONTINUOUS.
Employment contracts TRAINING.
Within each of these types we find “subtypes” of contracts. Also, to the latter we can add clauses and conditioning formulas in order to adapt the conditions of the contract to the company and the worker.
1. Indefinite employment contract
This type of contract focuses on long-term work, which is why it is established without a time limit, that is, for an indefinite period.
These are the most common and with them it is possible to create a relationship of stability, good conditions and commitment between the company and the worker.
The most significant change that can be contemplated after the entry into force of the labor reform is to limit the time established for temporary contracts to 18 months. After this period, the temporary contract in force must be transformed into an INDEFINITE contract. The purpose is for this type of contract to be the default contracting model, thus reducing temporality.
2. Temporary employment contract
This type of employment contracts are the most appropriate when there is a temporary nature of the contract, that is, they focus on the short/medium term and therefore for a specific activity or period. This can be PART-time or FULL-time.
Until the labor reform of 2022 there were three types of temporary contracts: the work or service contract, temporary due to production circumstances and interim contracts, but after this reform the work and service contract disappears and other modalities appear:
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Eventual contract due to production circumstances: This type of contract frames very specific situations such as, for example, an increase in activity in a job. It may not be longer than 6 months, but may be extendable to 1 year according to the agreement. In this modality, when the worker, in a period of two years, has been active for more than 18 months in the same job (both in the company and through temporary employment), with two or more contracts of this type, he acquires the status of Undefined.
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Contract for replacement of the worker: This contract is the one that most resembles the old interim contract. The objective of this type of contract is to replace the worker due to maternity leave, risks during pregnancy, vacation period, etc. One of the new points after the labor reform indicates that the person who is going to replace said worker will be able to start this job 15 days before the worker's leave or absence occurs.
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Other types of temporary contracts
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Contract for workers in a situation of social exclusion, victim of gender violence, domestic violence, victim of terrorism or victim of human trafficking.
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Of workers in a situation of social exclusion by insertion companies.
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Of workers 52 over years beneficiaries of unemployment benefits.
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Of situation of partial retirement.
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De relief.
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Of jobs social interest/promotion of agricultural employment.
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Of service workers family home.
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Of people with disability.
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Of people with disability in special employment centers.
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De researchers.
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Of workers punished in penitentiary institutions.
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De children and youth in centers for minors subjected to internment measures.
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3. Discontinuous permanent employment contract
This type of contract has the same character as the indefinite contract but the employment relationship in this case is intermittent, that is, we do not work continuously throughout the year but seasonally. Therefore, they have the same rights as permanent workers (vacations, compensation...)
4. Training employment contract
They can be of two types:
Alternation training: This type of contract aims to make paid work activity compatible with the corresponding professional training processes, university studies, among others. One of the conditions is that the work assignments are directly related to the training activities that justify the employment contract. It can last a minimum of 3 months and a maximum of 2 years. In this case, the working day cannot exceed 65% of the working day in the first year and 85% of the working day in the second.
Professional practice: This type of contract may be concluded between people who are in possession of an intermediate or higher degree, vocational training, university degree or master's degree. This must last at least 6 months and at most 1 year, both full-time and part-time.
5. Other types of contracts
Replacement for early retirement: This type of contract is based on the hiring of unemployed workers to replace workers who anticipate their ordinary retirement age of sixty-five to sixty-four years.
Relief contract: This type of contract is concluded with an unemployed worker or who has a fixed-term contract with the company, to partially replace a company worker, who accesses the retirement pension partially, since he receives it simultaneously with the performing a part-time job in the same company.
Choosing the appropriate type of employment contract is an important decision for both the company and the workers. Each type of contract has its own characteristics and legal requirements. It is crucial to understand your rights and responsibilities before signing a contract. Additionally, keep in mind that labor laws may vary by country and jurisdiction, so it is important to consult a competent professional in this matter for guidance specific to your situation. We hope that this blog is a guide to better understand each of them and be able to make the most appropriate decision for your needs and those of the company.
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Image by Drazen Zigic on Freepik
