illustration of working contracts.

Types of work contracts in Spain: read this guide to understand what each of them mean and the differences between them

Guide with the types of employment contracts in Spain

5 min read

If all the jargon makes your head spin, this article is for you. Learn about the different contract types and their pros and cons (and what to expect if you’ve already signed one).

If there’s something we all struggle to get our heads around, it’s work contracts: terms, rights and endless headings and clauses often make them impossible to read.

Thanks to the latest labor reform and Royal Decree-Law 32/2021, there are some changes that you have to take into account. In this guide we’ll explain each type of work contract in Spain, its purpose and its pros and cons.

Permanent contracts

Like the name suggests, permanent contracts don’t have a predetermined end date. So, yours could last until the end of your working life, if you don’t meet any of the termination requirements throughout the term.

The types of permanent contracts available are as follows:

  • Full-time permanent contract.
  • Part-time permanent contract.
  • Permanent seasonal contract.
  • Permanent contract for domestic workers.
  • Permanent contract for disabled persons.
  • Permanent contract in special employment centers.
  • Permanent contract for socially excluded persons.
  • Permanent contract for people aged 52+.
  • Permanent contract for victims of gender-based violence.

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When does a permanent contract end?

Currently, the possible grounds to terminate a permanent contract are as follows:

  • Voluntary departure of the employee.
  • Permanent disability of the employee.
  • Objective dismissal.
  • Disciplinary dismissal.
  • Employee retirement.

What are the pros and cons of a permanent contract?

One of the main advantages of having a permanent contract is the financial stability that comes with having a long-term contract, and the right to greater compensation if you’re dismissed from work. It’s also one of the best ways to be granted permanent residence in Spain.

On the other hand, the biggest disadvantage is becoming unmotivated due to a lack of new professional challenges, although that depends on the company and the sector it’s in.

The main differences between fixed-term and permanent contracts

Although fixed-term and permanent contracts are often referred to as if they were the same thing, that couldn’t be further from the truth.

A fixed-term contract has a specified term, meaning it has a start and end date. However, a permanent contract doesn’t have any time limit, so it can continue until the end of the employee’s working life. 

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Temporary contracts

These types of contracts are common in Spain if a company needs an occasional worker for a position that is only required for a set period of time.

They’re common because they bring some advantages to employers, such as lower compensation for employees compared to permanent contracts.

There are different types of temporary contracts, each with different features to take into consideration.

On-call contracts

This type of contract between employer and employee is used when someone substitutes for an employee for a previously agreed period of time.

Work or service contract

One of the most common types of temporary contracts, they allow employers to hire workers for a period of time for specific services within the company.

Casual contracts

These are specific contracts that businesses use in certain circumstances, such as leaves of absence, sick leave, maternity leave, etc. 

By law, they can’t exceed a term of six months within the same year.

Fixed-term contract

This type of temporary contract has a term of less than 30 days.

Training and internship contract

These are aimed especially at younger workers. Their purpose is to allow professionals to enter the labor market while providing training, combining work and training activities.

Work experience contract

Aimed at professionals working towards a qualification that requires professional experience in a certain sector, and who want to get their first temporary job.

10 things to watch out for before signing a contract

Just like you wouldn’t sign a mortgage deal without reading the small print, you also shouldn’t ignore any part of an employment contract. Here are 10 things to check before you sign the papers:

  • The type of contract: as you now know, they’re all very different. Make sure the contract matches the job offer you received.
  • Probationary period: lots of contracts have a probationary period, meaning the agreement can be terminated early. It should never exceed six months.
  • Term: closely linked to the type of contract. Check that the term is what you agreed to.
  • Rights according to the contract: find out what your rights are within the contract before signing.
  • Job details: make sure the job details are specified in the contract and that they match what you agreed to in the interview.
  • Project team: if you’re going to be in charge of an area, check the number of people and responsibilities.
  • Training: if you were promised ongoing training in the interview, check that it’s included in the contract.
  • Amount for retirement: this is directly linked to your salary and the type of contract you have, so it’s wise to do the calculations before signing.
  • Notice period for your current employer: remember that before you sign your new contract, the law requires you to give 15 days’ notice to your current employer.

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