Spain: Employment Law Reforms

On July 8, several notable employment law reforms went into effect in Spain, further defining and strengthening changes announced in February.

The Spanish government has clarified the economic grounds for redundancy in the case of employee dismissal: if a business has suffered a reduction in sales for three consecutive quarters compared with the same period in the previous year, this constitutes an “economic” reason for redundancy purposes.

Historically, if employers and staff representatives were unable to reach agreement on the terms of a new collective bargaining agreement, the old one remained in place indefinitely. In February, 2012, that was reformed to a period of not more than two years and, in July, it was further reduced to one year, after which point, no binding agreement is considered to be in place.  This is welcome news for employers.

Spanish employees are entitled to 20 hours of paid annual leave for educational purposes associated with their employment. They are currently allowed to carry this leave over for up to 3 years. This has now been extended to 5 years, technically meaning that an employee could take all 100 hours in year 5.