Littler Global Guide - Spain - Q4 2021

Browse through brief employment and labor law updates from around the globe. Contact a Littler attorney for more information or view our global locations.

View all Q4 2021 Global Guide Quarterly updates   Download full Q4 2021 Global Guide Quarterly

Labor Reform

New Legislation Enacted

Authors: Sonia Cortés García, Partner, and Ariadna Arriola Cabello, Associate – Abdón Pedrajas | Littler

Law 32/2021 of December 28, published on December 30, 2021, provides urgency measures for labor reform, the guarantee of employment stability, and the transformation of the labor market. Among other things, the law simplifies contracts (to reduce the temporary employment rate and encourage permanent contracts); promotes training contracts (to encourage hiring of young people); modifies the rules for temporary contracts; and updates outsourcing procedures.

The law further promotes flexibility in the employment; updates the rules for collective bargaining; modifies obligations concerning contribution to Social Security; increases the employer’s financial credit for training individuals affected by a furlough; among other provisions.

Pension Scheme

New Legislation Enacted

Authors: Sonia Cortés García, Partner, and Ariadna Arriola Cabello, Associate – Abdón Pedrajas | Littler

Law 21/2021 of December 28, published on December 29, 2021, guarantees the purchasing power of pensions and other measures to strengthen the financial and social sustainability of the public pension system. Mainly, this law provides the revaluation of pensions and guarantees the purchasing power is recovered through the updating of pensions according to the inflation of the previous year.

The law also modifies the requirements for access to the retirement pension system, especially for early retirement, introduces new incentives for people who decide to delay the access to the pension benefit, and introduces a new system to make the pension system more sustainable by means of the so-called "intergenerational equity mechanism." Furthermore, the law also provides a new regulation on access to widowhood benefits for unmarried couples (parejas de hecho), among other provisions.

Supreme Court Ruling on Return to Office-Based Work

Precedential Decision by Judiciary or Regulatory Agency

Authors: Sonia Cortés García, Partner, and Ariadna Arriola Cabello, Associate – Abdón Pedrajas | Littler

The Supreme Court on its judgment 4130/21 of October 20, 2021 examines (i) whether or not the plans to resume office-based work after COVID-19 must be negotiated with the employees' representatives, and (ii) whether this may or may not in itself involve a breach of employees’ right to physical integrity. The Supreme Court has held that employers are allowed to unilaterally implement plans to return to office-based work without entering into a prior consultation period with the employees’ representatives and that this consequently does not violate their right to freedom of association.

The decision does not pursue anything other than to resume the usual working conditions. Remote work was adopted exceptionally on the occasion of the COVID-19 pandemic. So, in the same way that employers were compelled to unilaterally modify the usual face-to-face system to provisionally implement remote work due to COVID-19 without arguing the need to previously negotiate that decision with the employees’ representatives, the Supreme Courts understands that it is not required now neither to do so in the other way around. Furthermore, in the event that the return to the offices is made in compliance with health and safety provisions and considering the necessary COVID-19 preventive measures, requiring employees to return to office-based work will not be considered itself as a breach of employees’ right to physical integrity.

Increase in the Amount of Employment Sanctions

New Regulation or Official Guidance

Authors: Sonia Cortés García, Partner, and Ariadna Arriola Cabello, Associate – Abdón Pedrajas | Littler

As of October 1, 2021, employment sanctions are increased by 20%, without retroactive effect. Consequently, minor employment infringements will lead to fines ranging from € 70 to 750 euros (instead of from € 60 to 625); serious infringements, such as breaches of contractual regulations or failure to comply with working hours and/or overtime, between others, will lead to fines ranging from € 751 to 7,500 (instead of from € 626 to 6,250).

Very serious infringements, such as the illegal assignment of employees, decisions detrimental to the employees’ right to strike, or failure to draw up an equality plan, will be sanctioned with fines ranging from € 7,501 to 225,018 euros (instead of from € 6,251 to 187,515). Furthermore, new infringements and sanctions have been introduced by art.5 of the new Law 32/2021, of December 28 on the labor reform.

Startup Proposed Bill

Proposed Bill or Initiative

Authors: Sonia Cortés García, Partner, and Ariadna Arriola Cabello, Associate – Abdón Pedrajas | Littler

On December 10, 2021, the Council of Ministers approved the referral to the Spanish Parliament of the Bill for the promotion of the startup ecosystem (the Startup Law) in support of the ecosystem of innovative technology-based companies, attracting investment and talent. With this Bill, the Government adapts the applicable framework to the specificities of startups, in the administrative, tax, civil and commercial fields, in order to support them throughout their life cycle, particularly in their early stages. To this end, it promotes the creation and growth of innovative digital-based high-growth startups and reinforces measures to attract international talent and investors. The Proposed Bill will be in line with the EU Startups Nations Standard declaration.

The main relevant aspects of this law are: definition of the concept of startup; ENISA will be in charge of granting the innovative nature of the startup; administrative agility (e.g., free of notaries and registrars fees with respect to the incorporation of certain companies); digital set up and registration; tax benefits for entrepreneurs and for investors (e.g., tax reduction, debt deferral, tax exemption for stock options); collaboration between public administrations, universities, public research organizations and technology centers; uses of regulatory sandboxes, among others.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.