Effects of the 2010 labour reform on the work or service contract

Abstract

One of the main stated aims of the 2010 labour reform was to regain the path of job creation and reduce unemployment in Spain. Of the measures taken by the labour reform to achieve this objective, the most important were those aimed at reducing labour market dualism and in particular at restricting the excessive use of temporary contracts. These measures expressed, first, in the Preamble to Royal Decree-Law 10/2010 of 16 June on urgent measures to reform the labour market and, second, in the Preamble to Law 35/2010 of 17 September on urgent measures to reform the labour market, include the following: a) those aimed at establishing a maximum time limit on work or service contracts, after which it must be considered that the contracted tasks are permanent in nature and must be subject to open-ended contracts; b) those introducing amendments to the regulation introduced in 2006 to avoid successive chaining of temporary contracts in order to make this rule more efficient; and c) those aimed at increasing compensation for the termination of certain temporary contracts.

The present paper studies how these measures introduced in the labour reform affect work or service contracts. Any legislative action intended to restrict the unjustified use of temporary employment must affect these contracts, which are the ones most commonly used for temporary employment and the ones that arouse most doubts about their justification. Nevertheless, most of the study is also applicable to other types of temporary contract, and in particular to contingency contracts, which are the other most widely used type. Though this type of contract was surprisingly not dealt with specifically by the labour reform, it was affected by the provisions that are common to all types of temporary contract. These include amendments to the regulation aimed at avoiding successive chaining of temporary contracts and those aimed at increasing compensation for the termination of certain temporary contracts.