I. FIXED-TERM CONTRACTS
The maximum duration shall be determined depending on the subject of the employment contract. The most common types of temporary contracts are as follows:
- Temporary employment contract depending on production circumstances: When for circumstantial market requirements, accumulation of tasks or excess of orders is necessary to hire staff to satisfy the demand. The maximum duration allowed in this type of contracts is 12 months within the period of 18 months, and it can be made a one-time extension of the initial contract within this period.
At the end of the contract, the employee is entitled to receive financial compensation of an amount equivalent to the proportion of the amount that would be required to pay a day and a half’s salary for each month of service.
- A contract for specified works: They are performed when needed staff for a project, a work or a specific campaign.
This type of contract has an implicit compensation payable to the worker to completion of 12 days of salary per year worked.
There are also other types of fixed-term contract to cover any lack or need to specify the company throughout its activity. The most common are the contracts for training and learning, internship contracts, interim contracts, etc. Temporary contracts are usually not subsided nor accompanied by any aid for the recruitment, because these contracts don’t generate stable employment.
II. INDEFINITE CONTRACTS
The indefinite contracts are the one that is agreed without establishing limits on its duration and remains effective over time until the company or the worker decide to end it.
This type of contract may be subsidized if the company meets certain requirements for hiring an unemployed person who fulfills certain characteristics (age, groups at risk of social exclusion, disabled, etc.).
In case of dismissal, the worker is entitled to higher compensation than in a temporary contract. This compensation will be based on the cause that motivates extinction, the number of days the employee had to provide services and the wage he had been receiving.
– Dismissal for objective reasons: the compensation is 20 days of salary per year worked, with a maximum of 12 months. It is understood that the employer´s decision to terminate the contract worker is justified by a number of objective reasons.
– Dismissal for disciplinary reasons: it is considered that the employer´s decision to terminate the contract is justified when the employee is the one who has breached its obligations, so there’s no compensation to pay.
In both types of dismissals, if the worker has filed a lawsuit (after his dismissal), it can be initiated legal proceedings in which the judge (or the company) recognizes the dismissal as unfair. In this case, the company shall be obliged to pay the worker a maximum compensation of 33 days salary per year worked with a maximum of 24 months.
In case it is the worker the one who decides to terminate the contract, it would be considered as a voluntary resignation, which means losing his right to a compensation and limitations to access the unemployment benefits.