Spain: 2012 Labour Market Reform declared constitutional

In a judgment dated 16 July 2014, the Spanish Constitutional Court rejected, by a large majority, an appeal lodged by the Parliament of Navarra in which it requested that three provisions of the 2012 Labour Market Reform be declared unconstitutional.

As a result, the following measures have been declared to be constitutional:

• The establishment of a probationary period of one year in the "contracts supporting entrepreneurs", during which time the employer is able to terminate a contract with no compensation for the employee. The judgment states that increasing probationary periods to one year in this kind of contracts (by contrast with the general rule of 15 days to three months applicable to other fixed-term contracts) not only allows employers to verify the employee's training and aptitude, but also the economic sustainability of the new job post.
• The role of the National Advisory Commission on Collective Agreements as mediator when workers' representatives and companies cannot reach an agreement on the non-application of collective bargaining agreements.
• The priority of company-wide agreements over sector-wide collective agreements. The judgment states that the aim of this measure is to protect company productivity and viability and, ultimately, employment.

   

Actions for employers

As a result of this decision, employers are able to benefit from applying an extended probationary period for new hires whenever the specific requirements for using it are met.

Author: Carmen Martinez, Madrid