Temporary contracts in Spain

15/01/2019.- The European Union Court of Justice recently amended its position and clarified its criterion on the compensation regime applicable to temporary contracts in Spain.

As readers may remember, the EU Court of Justice held on of 14 September 2016 (Diego Porras case) that the refusal to grant compensation for termination of the temporary employment contract was contrary to Clause 4 of the Framework Agreement on fixed-term work annexed to Directive 1999/70,’while allowing for the award of such compensation, to comparable permanent workers’.

EU Court of Justice judgments in connection with temporary contracts in Spain 

However, by means of two recent judgments dated June 5th 2018 –in response to two questions referred for a preliminary ruling on the compensation of temporary contracts by the Madrid Court of Social Affairs No 33 (Montero Mateos case) on an interim worker; and by the High Court of Justice Galicia (Grupo Norte Facility case), concerning the termination of a replacement contract – the EU Court of Justice amended and clarified its criterion as it was initially expressed in September 2016.

As regards the first case, the EU Court of Justice clearly states that the Spanish labour legislation governing the non-reimbursement of workers with temporary contracts in Spain is compatible with Community law.

As regards the Grupo Norte Facility case, the EU Court endorses the Spanish legislation on the retirement respite contract, which allows the employer to choose whether the respite contract is for an indefinite period or a fixed-term contract – up to the retirement age of the replaced worker.

The conclusion drawn from the two judgments mentioned above is clear. In Spain the differences in the termination of temporary contracts are not discriminatory (no provision for severance pay in the event of termination of temporary contracts and lower severance pay in the event of termination of replacement contracts). In other words, EU Law does not contradict national legislation.

Now, it seems reasonable to presume that future decisions to be taken by the European Court will follow the same doctrine. At a national level, our team of labor experts at Avantges  will keep an eye on how this new legal doctrine is followed by Spanish courts. In the meantime, do not hesitate to contact us for any further information and/or queries regarding the above.