The Government will simplify the contracting modalities and generalize the indefinite contract
The Government of Pedro Sánchez has sent to Brussels the 'Recovery, Transformation and Resilience Plan', a document that includes the guidelines of two of the main reforms that it plans to undertake: that of pensions and that of the labor market. The latter includes 17 measures to correct imbalances such as high structural unemployment, the duality of employment contracts or the high rate of temporary employment, in addition to laying the foundations for the status of 21st century workers.
The actions are explained in the document titled 'New public policies for a dynamic, resilient and inclusive labor market'. Some with a calculated ambiguity so as not to offend sensitivities, neither among social agents, nor within the Government itself, where different points of view coexist on how to undertake these reforms.
Where there is greater specificity is in the measures that seek to reduce the high temporality of the Spanish labor market. Not in vain, currently nine out of every ten contracts signed in Spain have an expiration date.
Currently there are four types of hiring: permanent, temporary, for training and learning; and practices. Each of them contains its own subtypes. For example, indefinite contracts can be ordinary, partial, or discontinuous fixed contracts. There are also interim contracts, work or service contracts, relief contracts, etc.
Broadly speaking, the Government wants to simplify and reorganize these contracting modalities. The idea is to generalize the indefinite contract, which three out of four workers have. To achieve this they want to "return causality" to the temporary contract. The Executive will require companies to provide clear justification of the reasons why they resort to temporary hiring, so that it is limited to the performance of purely temporary activities.
Many companies resort to the termination or non-renewal of this type of contract as an adjustment mechanism, since the compensation for dismissal is lower than in permanent contracts. It is worth remembering that in the third quarter of 2020 three out of every four jobs destroyed in Spain were temporary.
In addition, the Government plans to further tighten the use of very short-term contracts, as well as ensuring "appropriate use of subcontracting by discouraging cases in which it is a mere cost reduction instrument", according to the document sent to Brussels.
Discontinuous fixed contracts
Another measure consists of reviewing the application of discontinuous fixed contracts. This is an indefinite and fixed type of contract, through which the company incorporates a worker during a specific period in which the activity is carried out. Therefore, it is a cyclical work, widespread in sectors such as tourism.
It is also seeking to adapt the regulation of training and learning contracts - which are now rarely used and want to be promoted - and internship contracts. Hiring modalities that will be simplified to favor training in alternation with employment for young people between 16 and 21 years old, and generalize the stable hiring of those between 22 and 29 years old. These measures are included in the new youth employment program that the Government wants to articulate for the period 2021-2027.
The Executive will review subsidies and hiring bonuses - they represent 25% of spending on employment policies -, simplifying them and limiting them to indefinite contracts for unemployed people.
With a view to reducing the level of unemployment, several measures are contemplated: promoting Temporary Employment Regulation Files (ERTEs) as a permanent labor market mechanism. The idea is to turn them into "an alternative flexibility instrument to the external adjustment of employment in the face of negative shocks" and "reinforce investment in training" to retrain affected workers. On the other hand, it seeks to modernize deficient employment policies, which will be negotiated with social agents.
English 
Spanish