Types of Employment Contracts in Spain: What They Are and Which to Choose

Before delving into each modality, it is important to know what any contract must include. The document identifies both parties, specifies the type of contract and the place of work, sets the start date and, if applicable, the end date. It also details the professional category, working hours, salary, and the applicable collective agreement. If the contract is temporary, it must also justify the reason that makes it possible.

Indefinite Contract

The indefinite contract is one that has no termination date and offers the most stability, both for the employee and the company. It may include a trial period that must not exceed six months for technicians or two months for the rest of the staff, unless the agreement stipulates otherwise. During this time, either party can terminate the relationship without notice.

Within this modality, there are several variants. The most common is full-time, known as contract 100, compared to part-time, formalised with contract 289. There is also the indefinite contract for long-term unemployed individuals, which generates bonuses for the company, and the remote indefinite contract, designed for those who do not provide their services at the usual workplace. Finally, there is the transformation contract, which is signed when a temporary relationship becomes indefinite, with code 189 for full-time or 289 for part-time.

Fixed-Term Contract

What was known for years as a temporary contract is now called a fixed-term contract since the 2022 labour reform. Its defining feature is that it establishes from the outset the start and end date of the provision. To protect the workforce, it can only be used in very specific circumstances. The two most common are production circumstances, when there is a temporary increase in demand or a limited-duration project, and substitution, to cover the absence of a person with the right to job retention, such as during maternity leave or illness.

The reform also set time limits. The duration of these contracts cannot exceed six months, extendable to twelve if stipulated by the collective agreement, and if this period is exceeded, the contract automatically becomes indefinite. Additionally, the contract for a specific work or service has been eliminated, something companies must keep in mind if they still work with old models.

Discontinuous Fixed Contract

The discontinuous fixed contract is, for legal purposes, an indefinite contract designed for jobs that do not last throughout the year but occur in specific seasons. It is known as contract 300 and is common in sectors with strong seasonality, such as hospitality, agriculture, or tourism. The individual is called to work during each activity period and, during inactive times, may be entitled to unemployment benefits.

Training Contracts

Training contracts aim for young people and those without experience to gain practical experience in a specific sector. There are two well-defined modalities. The alternating training contract lasts between three months and two years and allows for a combination of work and study. During the first year, the effective working time cannot exceed 65% of the maximum working hours, a percentage that rises to 85% in the second year. The contracted person cannot work overtime, night shifts, or rotating shifts, and the company enjoys a 100% bonus on the Social Security contributions it would pay for them.

The contract for obtaining professional practice is aimed at those who have already completed their studies and need experience in their field. It can be signed within three years following the completion of training, or five if the person has a recognised disability, and its duration ranges from six months to one year. Both are commonly referred to as internship contracts, although the differences between them are notable. They should not be confused with scholarships: from January 1, 2024, interns will contribute to Social Security under the terms set out by Royal Decree-Law 2/2023.

How to Choose the Right Contract

The choice mainly depends on how long the need will last. The indefinite contract fits when the position is long-term and provides stability for both parties. If the need is temporary, such as a peak in demand or the absence of a staff member, it is logical to resort to the fixed-term contract. When the company seeks profiles without experience to learn its processes and work pace, the path is a training contract, and the difference between the two types is marked by the candidate's situation regarding their studies.

It is also important to consider the bonuses. The government offers reductions in Social Security contributions for hiring young people, individuals with disabilities, or long-term unemployed persons. To apply them, the company must be up to date with its payments to Social Security and the Tax Agency and hire individuals registered as job seekers with the State Public Employment Service (SEPE). This agency also publishes models of each type of contract, with the mandatory data that must appear in each one.

What Changed with the 2022 Labour Reform

The 2022 reform aimed to reduce temporality and strengthen job stability. In addition to eliminating the contract for specific work or service and limiting the duration of temporary contracts, it introduced incentives to convert temporary contracts into indefinite ones. Since then, more indefinite and discontinuous fixed contracts have been signed, but penalties for signing false temporary contracts have also increased.

Agreements That Are Not Employment Contracts

Within an employment relationship, confidentiality clauses, exclusivity clauses, or a promise of work, known as a pre-contract, can be agreed upon. There are also formulas that fall outside labour legislation. Commercial contracts or professional service contracts are governed by civil or commercial law, and in them, the person works autonomously, without dependence on the one who hires their services. Therefore, before choosing a formula, it is advisable to review whether there is truly autonomy or if there is dependence, as this determines which rules apply.