The new labour reform put forward by the Government (which, following the approval of the Royal Decree-Law, must go through a parliamentary process that is expected to be complicated) is the first major reform agreed with both social partners. In terms of content, it corrects some of the most harmful aspects of the 2012 labour reform, while preserving those that have helped create internal flexibility within a framework of stability.
There are many aspects that this labour reform does not address or on which it could be more ambitious:
– In the case of temporary employment, one of the flagship issues of the reform, although contract types are limited and the requirement to justify temporary contracts is strengthened, there are still significant differences in how contracts are terminated that continue to make temporary contracts more attractive than their permanent alternative.
– Something similar happens with very short-term temporary contracts, which may last only a few days or even a few hours, and which have multiplied in recent years: although the surcharge already applied to employers’ Social Security contributions on these contracts is increased, in order to make them relatively more expensive, the measure does not seem sufficient on its own to stop employers resorting to them.
In any case, it seems difficult to find a much better viable political balance that combines consensus between the social partners with progress towards the goals of reducing abusive temporary employment, rebalancing collective bargaining or encouraging internal rather than external adjustments during crises.
→ In collective bargaining, the reform seeks a balance between internal flexibility and wage stability:
• the extension of expired collective agreements (ultraactividad), whose removal was already tempered by the courts shortly after the 2012 reform, is restored, as is the precedence of sectoral agreements, but only for setting wages;
• but the precedence of company-level agreements is maintained for conditions more closely related to internal flexibility.
• In addition, workers at contractor or subcontractor companies will be subject to the sectoral agreement applicable at the main company.
→ In hiring, the reform follows the line of previous gradualist attempts (so far unsuccessful) to reduce the abuse of temporary contracts:
• contracts are presumed to be permanent as a general rule; contracts that do not specify sufficient grounds for being temporary will be considered permanent for all purposes.
• the temporary contract for a specific project or service, the one most often used for purposes far removed from its original spirit, is abolished.
• the grounds are specified and the duration is limited for temporary contracts in training, replacement and production-related circumstances.
• the permanent seasonal (fijo-discontinuo) contract is promoted, and may be used to cover intermittent work needs for the performance of commercial or administrative contracts related to the company’s activity.
→ It is perhaps in reducing external flexibility (through dismissals) to increase internal flexibility that the reform is most ambitious and promising:
• the regulation of furlough schemes (ERTEs) for economic, technical, organisational and production reasons and for force majeure is developed to incorporate everything learned during the management of the COVID-19 pandemic.
• In addition, ERTEs will entitle employers to reductions in Social Security contributions and workers to unemployment benefits, as during the pandemic.
• A new “RED Flexibility and Employment Mechanism” is also created as a complementary measure to ERTEs, to strengthen protection through internal adjustments by companies in the face of general cyclical shocks to employment (economic crises) or permanent sectoral shocks (industrial restructuring), either to help sustain employment, in the first case, or to facilitate the transition to other sectors of activity without going through unemployment, in the second.
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24 Mar, 2026
