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On Urgent Measures for Labor Reform, Guarantee for Stable Employment and Transformation of the Job Markert

In brief

Royal Decree-Law 32/2021 of 28 December 2021, published in the Official State Gazette (BOE) on 30 December 2021 and in force from 31 December 2021, contains the measures agreed on 23 December 2021 within the scope of social dialogue between the Spanish government and the most representative trade unions and business organisations state-wide.

After nine months of negotiations, this new regulation is the result of a reform process undertaken at the initiative of the government and has basically concluded with significant amendments in three regulatory fields: (i) Temporary employment contracts; (ii) collective bargaining and (iii) internal flexibility measures or temporary lay-offs (ERTE). 


  1. Key Points

Read the alert in Spanish here.

Key Points

Are the types of employment contracts simplified?
Yes, training contracts are unified in one sole training contract with two types of such contracts (work-study training programmes and internships) and fixed-term contracts are also reduced to one single type, which can be entered into for production reasons or in order to substitute a worker.

Are temporary contracts for a specific project or service eliminated?
Yes, this type of contract has been eliminated.

Can workers be recruited by means of temporary contracts for production reasons to perform work within the context of subcontracting, outsourcing or administrative concessions?
As a general rule, temporary recruitment is not possible when the subcontracting, outsourcing or administrative concessions involve the company’s usual or ordinary activity. The reform includes current case law doctrine on this point; therefore, this provision will not have a significant impact. 

Can workers be recruited by means of a discontinuous-permanent contract to perform work within the scope of subcontracting, outsourcing or administrative concessions?
Yes, employment by this permanent contractual system is promoted for performing work consisting of rendering services within the scope of subcontracting, outsourcing or administrative concessions.

Is the limitation in successive temporary contracts reinforced?
Yes, the temporary period that determines the temporarily recruited worker’s right to acquire the position of a permanent worker is reduced more than eighteen months in a period of twenty-four months) and there is a guarantee applicable to the job temporarily held; therefore employees holding their jobs for more than eighteen months within a period of 24 months by means of two or more contracts for production reasons will also become permanent employees.
Are administrative sanctions for fraudulent use of temporary contracts reinforced?
Yes, an administrative infringement will now be considered for each worker involved. Moreover, the amounts of the fines are also higher: at the minimum level from €1,000 to €2,000; at the medium level from €2,001 to €5,000 and at its maximum level from €5,001 to €10,000.
What changes have taken place within the scope of contracts and sub-contracts for projects and services?
The most significant aspect is that, as a general rule, the collective bargaining agreement applicable to the contractor or sub-contractor company will be the one of the business sector included in the contract or sub-contract, regardless of the company’s object. However, if the contractor or sub-contractor company has its own collective bargaining agreement the latter will be applicable.
The reform includes current case law doctrine on this point; therefore, this new provision will not have a significant impact. 

Has the one-year period of ultra-activity in collective bargaining agreements been eliminated?
 Yes, ultra-activity in collective bargaining agreements now has no time limit.
Does the application of companies’ collective bargaining agreements continue to take prevalence in certain matters over higher-level collective bargaining agreements?
Yes, but it is significantly limited because the application of the company’s collective bargaining agreement eliminates the prevalence over the amount of the base salary and salary supplements, including those subject to the company’s situation and profits or losses.
Has the current temporary lay-off system (ERTE) been reviewed?
Yes, following the model used during the pandemic, temporary lay-offs are allowed to be processed for Economic, Technical or Production reasons (ETOP) and the hindrances or limitations in the company’s normal activities are expressly included as a specific situation of force majeure if they are due to decisions adopted by the competent public authorities, including those aimed at protecting public health.
Is a new mechanism provided for internal flexibility in situations of crisis stemming from the macroeconomic situation or reconversion processes and professional transition in a certain business sector or sectors?
Yes, following the model used during the pandemic, the resource of using measures to reduce and suspend contracts is encouraged as an alternative to dismissals in certain contexts where there are macroeconomic difficulties or production reconversion and transition by creating the RED Mechanism for Job Flexibility and Stabilisation.

In the following link you will find the summary of the Royal Decree-Law 32/2021.


Mireia Sabate is a partner in Baker McKenzie’s Barcelona office. She practices mainly in the areas of labour and employment law. Ms. Sabate also regularly teaches at universities, having lectured on labour institutions and litigation at ESADE Law School in Barcelona, and conducted training on employment termination at ISDE (Higher Education Law and Economic Institute). She is teaching courses on social security law at the Universitat Internacional de Catalunya. Ms. Sabate has also provided training in equity law at the Barcelona Chamber of Commerce, and on the free transfer of employees at the Barcelona Bar Association.


David Díaz is a partner in Baker McKenzie’s since 2004 and heads both the Employment & Compensation and Sports Law practice in Baker McKenzie Madrid. He has significant experience litigating in labor courts and negotiations with unions. He is recognized in the field of employment law by Chambers Europe and Legal 500. In addition to his practice, Mr. Díaz regularly collaborates with economic newspapers, has co-authored several leading reference books on employment and is a regular speaker in industrial relations courses. As head of the Sports Law practice in Baker McKenzie Madrid, holds extensive experience this area particularly in the football industry. Specifically he regularly advice professional athletes and clubs in all the matters related to negotiation of contracts and transfers and its compensation schemes. David also has wide experience in assisting foreign investors with interest in the European football industry.


Concha Martín joined Baker McKenzie in 1991, and currently serves as a partner in the Firm’s Labor and Employment Practice Group in Madrid. She is ranked in Chambers Europe, and has significant litigation experience in the area of labor and employment law. She has also participated in significant Supreme Court cases on employee equity benefits and other employment and labor matters. Also a member of the Madrid office’s Restructuring Committee, Ms. Martín is seasoned in labor negotiations and restructurings. She regularly collaborates with economic newspapers and specialized journals, and is a frequent speaker in courses at the Instituto de Empresa, the Madrid Bar Association and ICADE’s MBA program.


Marc Cucarella is an Associate in Baker McKenzie Barcelona office.

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