In the following cases, a contract for the promotion of indefinite-term employment could be entered into:

• a) Unemployed workers, registered at the employment office, in the following events:
  • Young people from 16 through 30.
  • Unemployed women, when hired to render services in activities with a lower index of women employment; women within two years immediately following childbirth or adoption or fostering of minors, unemployed women rejoining the labor market after an absence of five years, and unemployed women who are the victims of gender-based violence and human trafficking.
  • People over 45.
  • People with disabilities.
  • Unemployed people who have been registered for at least one month as jobseekers.
  • Unemployed persons who during the two years before the signature of the contract, have been employed only under temporary contracts, including training contracts.
  • Unemployed persons who, during the two years before the signature of the contract, have had an indefinite-term contract terminated at a different company.
• b) Conversion on indefinite term employments of employees hired by the same employer through fixed term or temporary contracts, including training contracts formalized as from June 18, 2010. Such contracts should be transformed into permanent contracts before December 31, 2011, conditioned to the fact that its duration has not exceeded six months (such maximum duration does not apply to training contracts).
• If a contract of this type is terminated on objective grounds and its termination is then adjudged or recognized by the employer to be unjustified, the worker will be entitled to severance equal to 33 days’ pay per year worked, with periods of less than one year being prorated by month, and up to a maximum of 24 months’ pay.

It has to be born in mind that the prohibition against executing this type of contract applies in cases where ordinary indefinite-term contracts have been terminated within the preceding six months on objective grounds adjudged or recognized to be unjustified or where a collective layoff procedure has been implemented, and will only affect coverage of the same position in the same work centre.

Moreover, the Wage Guarantee Fund will pay 8 days’ salary per year of service as part of the indemnity for the indefinite-term contracts (ordinary contract as well as contracts to promote the indefinite hiring) that have been entered into after June 18, 2010, when they are terminated on objective grounds , collective dismissals, or procedures of the Insolvency Law, provided that the contract must have had a duration exceeding one year (the Company will pay the severance to the employee and will have to request the reimbursement to the Wage Guarantee Fund).

For further information, visit the extended version of our online Guide to Business:

Labor and Social Security regulations

pPrepared by Garrigues

Last updated: 28|06|2011