Employment contracts in Spain

Thinking about working in Spain? Before you sign the wrong dotted line, it’s important to understand the basics of employment contracts. Whether you’re considering a permanent gig or a temporary stint, knowing what to expect is key.

Start off your new job on the right foot by reading this rundown of employment contracts in Spain:

Employment contracts in Spanish labor law

The Ministry of Labor and Social Economy (Ministerio de Trabajo y Economía Social – MITES) is responsible for planning and implementing labor policies in Spain.

A key aspect of Spanish labor law is the Workers’ Statute (Estatuto de los Trabajadores). This sets clear rules for employment rights and benefits, job descriptions, working hours, and minimum wages. It also oversees collective bargaining agreements (convenio colectivo de trabajo – CCT) between employers and labor unions.

Spanish labor law stipulates that every worker has a right to an employment contract (contrato de trabajo). These may be written or oral agreements. However, special labor relations (e.g., attorneys and top managers) and employment lasting more than four weeks require a written contract.

Work contracts are typically in Spanish, and there is no legal obligation to translate them into any other language. However, employers may provide foreign employees with an English-language version or translation so that they fully understand the terms.

Once both parties have signed it, the government’s Public Service of State Employment (Servicio Público de Empleo Estatal – SEPE) must receive a copy of the agreement within 10 days of it coming into force.

How to avoid an employment dispute in Spain

Poorly drafted employment contracts could lead to significant legal challenges. Ambiguous language, vague clauses and provisions, and non-compliance with collective bargaining agreements could result in an employment dispute, particularly when it comes to wages and working hours. In turn, this could snowball into costly litigation and damage to the company’s reputation.

Don’t let it come that far. A specialized employment lawyer can help you avoid common pitfalls by drafting clear, comprehensive contracts that safeguard both parties’ interests. English-speaking legal firms such as Lexidy may be able to assist you.

Can you work without a contract or work permit?

Working without a contract or work visa makes you part of the shadow or underground economy. This basically comprises all off-the-books payments, from informal farm and service work to plumbers failing to declare cash income.

As the name already suggests, under-the-table transactions – colloquially known as paying “in B” (or en negro) – is illegal.

Spain’s shadow economy is one of the largest in Europe. In 2018, it was reportedly equivalent to 17.2% of its GDP. Despite the government’s labor reforms, off-the-book work increased by 9.74% during the COVID-19 pandemic. 

Despite its commonality, working without an employment contract is (like we said) illegal. While yes, you receive more money by not paying tax, it also has a flipside. The social security office loses out on contributions, and workers’ rights cannot be protected, meaning you’re exploited more easily. As such, it violates both employment and tax laws. 

Employers caught taking on someone without a contract face: 

• Heavy fines of up to €10,000
• Back payment of social security fees with interest
• Losing access to all social security discounts and government benefits for up to two years
• (Possible) closure of the company between six months and five years
• Criminal charges if the tax evasion is intentional

The same consequences and penalties apply to employers hiring expats without a valid work permit. Foreign employees without a work permit may face hefty fines, deportation, and a ban from entering Spain and the Schengen area for up to three years or more.

Types of employment contracts in Spain

Indefinite contracts

An indefinite contract (contrato indefinido) is an ongoing employment agreement without a fixed end date. It is often referred to as the standard contract and can be for full-time or part-time work (contrato a tiempo parcial) in Spain. Indefinite contracts may not apply to remote work (trabajo a distancia).

The major advantages of this type of contract are a stable income (e.g., if you want to apply for a mortgage) and greater job security. For example, it’s much more difficult to dismiss a permanent employee. Employers must have a just cause to terminate the contract, and, as such, permanent employees are often the last to go during collective layoffs.

Open-ended contracts also provide access to a wider range of benefits, such as work bonuses, improved career prospects, and severance pay (indemnización por despido).

Temporary contracts

A temporary contract (contrato temporal) has a fixed end date and is used for hiring employees for specific, short-term tasks or events. Under Spanish labor law, employers may only resort to fixed-term agreements when: 

• There is a temporary increase in workload beyond the company’s regular production requirements – limited to six months within a 12-month period
• Hiring a replacement worker to cover for someone who is temporarily absent but retains the right to return to their position (e.g., new parents on parental leave) – lasting for the duration of the absent employee’s entitlement

Fixed-term contracts must always be in writing and include the reason why the position is temporary. If it doesn’t specify these details or the reason doesn’t comply with the law, the contract may be considered indefinite by default.

Similarly, if a worker is hired for the same or a similar job within 30 days of the end of the last contract, their new employment agreement may be classified as permanent.

Temporary contracts can generally be renewed. However, the total duration must not exceed 24 months within a 36-month period. After that, the employee must either be dismissed or given a permanent contract.

Some fixed-term agreements (e.g., for specific projects, seasonal work, or substituting another employee) have different regulations regarding their durations and renewals. The SEPE website has more information about these types of fixed-term contracts.

Training contracts

When students and young graduates work to gain professional work experience, they’re hired under a training contract (contratos formativos). There are two types:

• Internship contracts (contrato destinado a adquirir una práctica profesional, formerly known as contrato en prácticas) are aimed at students aged under 30 (or 35 in certain circumstances)
  • The contract may last from six months to one year. A one-time renewal is only allowed if the first contract does not exceed one year, and the student has not yet obtained the associated Professional Certificate.
• Trainee and apprenticeship contracts (contrato de formación en alternancia de trabajo y formación, formerly known as contrato de formación y aprendizaje) mean to hire students aged 16–25 (or 30 in certain circumstances) who receive on-the-job training as part of a vocational study program
  • These agreements may last from three months to two years, or three years if they involve a person with disabilities. They cannot be renewed.

During their training, students may not work more than 65% of the time during the first year and 85% during the second year. Overtime, night shifts, or shiftwork are not allowed.

Other types of work contracts

• Fixed-discontinuous contracts (contrato fijo discontinuo) – applies to annually recurring employment that is carried out at certain times of the year, such as seasonal or on-call work
• Payroll contracts (contrato de nómina) – used for employees working at one company while technically being employed by another third-party agency
• Remote work or distance-work employment contract (contrato de trabajo a distancia) – designed for hiring remote workers as specified in the Law on Remote Work (Ley de Trabajo a Distancia)
• Secondment contracts (contrato de comisión de servicios) – involves temporarily assigning an employee to a different branch or company in Spain while maintaining their original employment contract. They apply to different types of work, such as projects, temporary positions, or training work placements.

What should be included in your contract?

The following elements are mandatory in a standard employment contract:

• Personal details of the employer and employee, including full legal names
• Job title and role description
• Salary and any additional remuneration (e.g., bonus payments)
• Employment benefits (e.g., health insurance or travel allowances)
• Information on retirement contributions 
• Type of contract and starting date
• If a fixed-term agreement, the end date
• Standard work hours and overtime policy, including payment
• Details of the probation period
• Termination clauses, including notice periods and any severance pay
• Confidentiality clause during and after employment
• Statutory rights as outlined in Spanish labor law and any applicable collective bargaining agreements
• Information on team involvement or required training programs
• Acknowledgement of the employer’s obligation to provide a written copy of the employment terms within two months of you starting the job
• Any additional clauses (e.g., non-compete clauses, garden leave provisions, and transfer of rights for any intellectual property)

What is the probation period in Spain?

When you first start a job, it is common to have a trial period (período de prueba). The employment contract must clearly state the duration and working conditions. The standard probation period for new hires is typically two months, but could be up to six months for senior positions.

Apprentices and trainees may not have a trial period; interns can have a one-month probation period unless otherwise specified in the CCT.

During your trial period, you have the same rights and obligations as other employees. An exception applies to a possible termination; both you and your employer may end the employment relationship without notice or reason.

Tricky contract clauses to look out for

While some clauses in an employment contract are standard and reasonable, others might be restrictive and impact your professional freedom. Before signing a bad agreement, you should look out for:

• Arbitration clauses – these require disputes to be resolved through arbitration instead of court litigation. While arbitration can be quicker and less formal, it may also limit your ability to argue your case or appeal the decision.
• Exclusivity or non-compete clauses – these restrict you from working for other employers or pursuing side projects that might be deemed competitive. Check the duration and geographic scope of these clauses to make sure they won’t restrict any future employment opportunities.
• Confidentiality agreements – while protecting company secrets is understandable, ensure that the confidentiality clause is not overly broad and permanent, as this can limit your future job prospects or ability to start your own business
• Intellectual Property (IP) rights – understand what happens to the intellectual property you create during your employment. Some contracts state that any IP you create, even on your own time, belongs to your employer.
• Job duties and location – make sure your job responsibilities and work location are clearly defined. Ambiguous descriptions can lead to unexpected changes in your role or work location.
• Right to Amend – be cautious of clauses that give the employer the right to amend the contract terms unilaterally. Changes should ideally require mutual consent.
• Termination clauses – look closely at how and when you can end your contract, including notice periods and what constitutes grounds for termination. Be wary of clauses that allow the employer to terminate the contract without cause, without severance pay, or with minimal notice.

When in doubt, you should seek professional advice from a licensed employment lawyer or attorney.

Amendments to your Spanish work contract

Employers can amend signed contracts by changing duties or job levels without reducing salaries. However, they must inform the employee (and ideally consult with them) beforehand.

Spain’s labor laws stipulate strict procedures regarding changes to an employment contract. If the employer fails to comply, the worker has the right to terminate the contract without notice and seek legal representation to collect compensation.

Ending your employment contract in Spain

How to quit your job in Spain

You can resign from your job at any time, provided you give advanced notice in writing (unless your temporary contract lasts less than 12 months). The standard notice period in Spain is 15 days, though, the collective labor agreement might stipulate a longer time frame. Be sure to review your employment contract for the specific details.

Like everywhere else, the standard resignation process is to write a termination letter detailing your reasons for leaving. Your employment contract may list additional details.

If you stop working during the notice period, your employer has the right to deduct a portion of your salary or severance pay.

Employees may also resign without notice and with immediate effect. This is known colloquially as ‘quitting on the spot’ and legally as ‘resignation with just cause‘ (renuncia con justa causa). These resignations typically involve a breach of contract or a violation of employee rights, such as:

• Non-payment of wages
• Harassment or discrimination
• Health and safety violations
• Significant changes in working conditions without the employee’s consent
• Violation of privacy (e.g., mishandling of personal data)

You should seek legal advice from a labor attorney to ensure your actions are legally sound. They can also explain the potential implications, including your eligibility for unemployment benefits or other legal recourse.

Depending on the situation, you may be eligible for 20 days’ compensation for each year of your employment with the company.

What to do in difficult work situations

If you feel unsafe at work or experience workplace harassment, you can contact your employer’s health and safety representative (delegados de prevención) or Human Resources department (recursos humanos). Depending on the situation, you can also:

• Speak to a labor union representative
• Take the matter to the Arbitration Office (Instituto de Mediación, Arbitraje y Conciliación)

Getting laid off or fired in Spain

An employer can also terminate an employment contract by providing prior written notice. Like employees, the standard notice period they must give is 15 calendar days; however, collective CCTs may require more time. Prior notice is not required in the case of interim contracts, probation periods, or temporary contracts shorter than 12 months.

Employers must provide valid grounds for termination, such as:

• Objective causes (extinción del contrato por causas objetivas) – when the employee doesn’t perform their work duties (well), and this was not apparent during the probation period
• Disciplinary reasons (despido disciplinario) – a consequence of employee misconduct, such as contract violations, being chronically late to work, repeated or unjustified absences, threatening behavior, harassment, and substance abuse
• Collective dismissals (despido colectivo) – when a group of employees is dismissed due to economic, technical, organizational, or production reasons within the company

Learn more about employee rights and protections (including severance pay) in our article on termination and redundancies in Spain.

Useful resources

• Ministry of Labor and Social Economy – official website of the ministry responsible for labor laws in Spain
• Public Service of State Employment – official government website with information on employment contracts in Spain
• 2023 labor guide (in Spanish) – MITES pdf containing Spain’s labor laws