Guide to all types of employment contracts in Spain.

Thanks to Royal Decree-Law 16/2013, of December 20, on measures to promote stable hiring and improve workers’ employability, we have gone from having some 42 different employment contracts to just 4, which encompass most of them.

This gives us a simpler framework for understanding and knowing the circumstances in which we will hire a worker.

If you would like to look at these contract models in more depth, read on:

1. The permanent contract.

A permanent employment contract is one under which paid work is performed with no end date.

It is one of the contracts most used by companies and one that many employees would like to have, since it has no contractual end date and the State grants more relief (bonificaciones) for it.

These contracts may be full-time, part-time, or permanent intermittent (fijos discontinuos).

2. The temporary contract.

The main difference between a temporary employment contract and a permanent contract is that the former is intended to bring in a worker to fill a specific position for a fixed period of time.

It is therefore an employment relationship between the company and the worker for a limited period. It may be executed verbally or in writing, except for contracts with a duration of more than 4 weeks.

3. Apprenticeship and training contract (contrato para el aprendizaje y la formación).

The purpose of this training contract is to provide employees with vocational training. It involves a regime that alternates paid work for an organization with training received within a vocational training system.

It is subject to a number of requirements when hiring:

• Workers must be unemployed and over 16 and under 25 years of age.

• Minimum duration of 1 year, extendable up to a maximum of 3 years.

• The worker must not previously have been hired under the same circumstances for the same occupation

4. Internship contract (contrato en prácticas) or training employment contract.

The purpose of this contract is to provide professional work experience in line with the studies completed. The aim is to acquire experience within the 5 years following the award of the qualification for the studies completed.

When hiring an intern, a distinction must be drawn between students who are still enrolled at university and those who have already completed their university studies and may therefore enter into an internship contract.

Requirements for hiring interns.

In the first case, the intern’s engagement will be governed by an agreement between the company and the institution to which the student belongs. This is an advantage for the company, since the engagement entails no cost for it. These internships are of limited duration, usually around 3 months, with a working day of 4 or 5 hours, and there is no obligation to pay the intern.

Companies will need to go to the job boards of the various universities and register with them as collaborating entities. They will then be able to post offers specifying the requirements that students must meet to apply for them.

Training contract alternating with work (contrato formativo en alternancia).

In the second case, companies may enter into an internship contract, which is an employment contract, and the person hired must therefore pay Social Security contributions.

The worker must receive remuneration, which will be set out in the collective bargaining agreement.

This amount will be at least 65% during the first year and 85% during the second. The duration of this type of contract may not be less than 6 months or exceed 2 years.

There is no entitlement to severance pay on termination, and overtime is prohibited except in cases of force majeure.

If the company opts for an internship contract, the formalities are similar to those for any hiring: registering the worker with Social Security and filing the contract with the SEPE (Spanish Public Employment Service, Servicio Público de Empleo Estatal). The employee must have completed his or her university studies.