Temporary and Fixed-Discontinuous Contracts in Spain

Temporary Contracting in Spain After the 2021 Reform

The 2021 labour reform (Royal Decree-Law 32/2021) fundamentally restructured Spain’s temporary contracting landscape. The reform’s stated goal was to reduce Spain’s chronically high rate of temporary employment (historically among the highest in the EU), which stood at approximately 25% of the workforce before the reform.

The key changes were:

• Elimination of the contrato por obra o servicio determinado (work-and-service contract), which had been systematically abused to avoid permanent hiring.
• Elimination of the contrato eventual por circunstancias de la producción for seasonal or cyclical needs that recur.
• Restriction of the remaining contrato eventual to a maximum of 90 days per year per worker.
• Elevation of the fixed-discontinuous contract (fijo-discontinuo) as the preferred vehicle for recurring, seasonal, or intermittent work.
• Strengthening of the conversion and presumption-of-permanency rules.

Temporary Contracts Still Available

1. Contract for Specific Production Circumstances (Contrato por Circunstancias de la Producción)

This is the main surviving short-term temporary contract. It covers two distinct situations:

A. Occasional, unforeseeable increase in activity:

• Maximum duration: 90 days per calendar year per worker (not necessarily continuous).
• Purpose: genuinely sporadic, unpredictable peaks in production or service demand.
• It cannot be used for seasonal or foreseeable recurring needs (those require a fixed-discontinuous contract).
• The 90-day annual limit per worker is strictly enforced regardless of the number of contracts signed.

B. Replacement during predictable periods of reduced activity:

• Allows temporary hiring for defined calendar periods of low activity (e.g., Christmas campaigns where predictable demand spikes occur).
• Maximum duration: 90 days per year (same annual cap, shared with situation A).
• Requires that the collective agreement authorise or establish the specific periods.

2. Substitution Contract (Contrato de Sustitución)

This contract replaced the old interinidad contract and is used to:

• Replace a worker with a reservation of job position (sick leave, maternity/paternity leave, sabbatical, secondment, suspended duty).
• Hire a worker to cover the vacancy period while a recruitment process is underway (up to 3 months).
• Cover the overlap when an employee’s working hours are reduced ahead of their retirement.

The contract must identify the substitute worker and the reason for substitution. It lasts as long as the cause persists (or up to 3 months for pre-retirement hiring coverage). When the cause ends, the contract terminates by expiry — this is the legal end of the contract, not a dismissal.

3. Training Contracts (Contratos Formativos)

Two training-oriented temporary contracts exist:

A. Alternating Training and Work Contract (Contrato de Formación en Alternancia):

• For workers up to age 30 (no age limit for those with a disability).
• Combines work activity with participation in an official training programme at a university or vocational education centre.
• Duration: 3 months to 2 years.
• Remuneration: minimum 60% of the applicable category salary (year 1), 75% (year 2), but never below the SMI.
• Reduced Social Security contributions for both employer and worker.

B. Work Experience Contract (Contrato para la Obtención de Práctica Profesional):

• For workers who have obtained a relevant qualification within the last 3 years (5 years for persons with disability).
• Duration: 6 months to 1 year.
• Worker must be performing work corresponding to their qualification level.

Fixed-Discontinuous Contract (Contrato Fijo-Discontinuo)

The fixed-discontinuous contract is now central to the Spanish labour landscape. It is a permanent contract — not a temporary one — but it covers workers whose employment relationship is inherently intermittent or seasonal.

When to Use It

• Seasonal and recurring work: Hotels, summer tourism, agricultural harvests, Christmas campaigns, ski resorts — any recurring pattern of demand.
• Contracted services (externalised activities): When companies provide services to other entities on a seasonal or recurring basis, the staff performing those services should generally be on fixed-discontinuous contracts.
• Platform and on-call work: Work provided to multiple clients on a recurring but non-continuous basis.

Key Features

• The worker is a permanent employee with full seniority from the original hire date.
• During inactive periods, the worker can claim unemployment benefit from SEPE (subject to contribution requirements).
• The collective agreement or company agreement must specify how call-to-work notifications (llamamiento) are communicated and what the minimum advance notice period is.
• Failure to call a worker back at the appropriate time is treated as a dismissal and may be declared unfair.

Social Security During Inactivity

Workers on a fixed-discontinuous contract in their inactive period remain registered with Social Security for healthcare purposes but contributions are suspended. During inactive periods, they are counted for statistical employment purposes as employed (not unemployed), which affected Spain’s official unemployment statistics.

Consequences of Improper Temporary Contracting

Using temporary contracts outside their legal scope — for example, using a circunstancias de la producción contract for what is actually recurring seasonal work — carries serious consequences:

• The contract is automatically converted to a permanent contract (contrato indefinido) from the date of the improper hiring.
• The employer must pay Social Security back-contributions, plus a 20% surcharge (recargo de prestaciones) if an employment accident occurred on an improperly registered worker.
• ITSS (labour inspectorate) fines range from EUR 1,000 to EUR 10,000 per worker in serious cases.
• Workers may claim unfair dismissal compensation when their “temporary” contract is allowed to expire — since it was actually a permanent contract, its expiry constitutes an unfair dismissal.

Collective Agreement Provisions

Many collective agreements include provisions on:

• Sector-specific temporary contract types or conditions.
• Maximum percentages of temporary workers in the workforce.
• Conversion obligations after defined periods of temporary work.
• Fixed-discontinuous call-to-work procedures and minimum activity guarantees.

Always verify the applicable convenio colectivo before structuring workforce contracts.

Frequently Asked Questions

Can I use a string of consecutive temporary contracts instead of hiring permanently? No. The 2021 reform introduced an automatic conversion rule: a worker who has been employed under two or more temporary contracts — with the same company or group, for the same or similar functions — for more than 18 months in any 24-month period, is presumed to be a permanent employee.

What happens when a temporary contract expires? Expiry of a legitimate temporary contract terminates the relationship without the need for severance (other than the statutory 12 days/year compensation, payable on termination). However, if the contract was not lawfully temporary, its expiry is treated as an unfair dismissal.

Is there a minimum severance payment for temporary contracts? Yes. Workers on temporary contracts are entitled to a severance of 12 days’ salary per year of service on contract expiry (natural termination due to completion of cause). This applies to circunstancias de la producción and sustitución contracts.

How many days per year can we use a production circumstances contract per worker? A maximum of 90 days per calendar year, per worker. This is an absolute cap that cannot be extended by collective agreement.

Do fixed-discontinuous employees accrue holiday entitlement during inactive periods? No. Holiday entitlement accrues only during active working periods. However, seniority for all other purposes (redundancy compensation calculation, promotion criteria) accrues continuously from the original contract date.