How a spike in permanent contracts is improving job security in Spain

Spain still has a long way to go in terms of turning its services-heavy job market into a more resilient, fair and diverse model, but progress is being made.

In just four months since it came into force, the left-wing coalition government’s labour reform is already changing one of the main pitfalls of the Spanish job market: temporary employment. 

Around a third of employees hired in the first four months of 2022 have been given permanent contracts. 

The rate of new permanent contracts has been rising month on month this year, representing 15 percent of new hires in January, 22 percent in February, 31 percent in March and 48 percent of new contracts in April.

In fact, the month of April saw a record 698,646 contratos indefinidos (permanent contracts) signed and there have now been more permanent contracts handed out in these first four months of 2022 than for every full year from 2009 to 2016.

It’s the first time there are more than 20 million workers in Spain affiliated to the country’s social security system and the number of unemployed has dropped below 3 million, the lowest rate since before the 2008 financial crisis.

So what’s changed for Spain’s job market?

Before the labour reform came into force in 2022, fixed-term contracts represented the vast majority of those signed month on month in Spain, many of which were lined up one after another and some contratos temporales could last just hours.

In fact, in 2021 Spain had the highest number of temporary contracts in Europe.

For millions of temporary workers in Spain, there were (and still are) no guarantees in terms of future work and income in a seasonal market where employers have become accustomed to not offering employees guarantees or work rights.

But the measures spearheaded by Spanish Labour Minister Yolanda Díaz, fully approved in February after a voting error by a PP deputy, are now helping to resolve the rampant insecurity of Spain’s labour market as well as improving working conditions.

READ ALSO: Spain’s govt salvages key labour reform thanks to voting error

Temporary workers may now be hired to fill a position, but for a maximum of 90 days a year and not consecutively, as is often the case for large employers trying to save on costs and who effectively employ temporary workers full-time but don’t recognise their pay or protection as such.

Likewise, in the last quarter of each year, companies must give workers some kind of forecast of what type and how much work they will need for the coming year. 

In terms of new temporary training contracts, temporary hires are allowed in alternation, meaning in situations that include both elements of work and training, but are only available with employees who are 30 or under. 

To try and further clamp down on exploitative practices in seasonal work, the reforms introduce a ‘fixed-discontinuous contract’ for “carrying out work of a seasonal nature or linked to seasonal productive activities.”

A contrato fijo discontinuo, as the name suggests, is a type of contract with no set end date but that isn’t carried out throughout the whole year and it is often meant for seasonal work.