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Employment legislation changes in Europe: Spain and Portugal

As remote and hybrid workforces are becoming a permanent fixture in a post-COVID-19 working world, we look at the new legislation by governments to reflect the new world of work in particular the employment legislation changes that has occurred in Spain and Portugal.  

Over the last year, we have seen many changes in legislation due to Covid-19 lockdown. As the trend of staff working from home continues, governments in Europe are making changes to their employment legislation.  

While some legislation was seen as temporary due to Covid-19 lockdowns, other governments have focused on bringing in new legislation to reflect the new world of work. In this post, we look at the new employment legislation changes that has occurred in Spain and Portugal.  

Employment legislation changes in Spain 

In February this year, the Spanish government signed off on the new Spanish labour reform. Following months of negotiations last year between the government, trade unions (CCOO and UGT) and employers’ representative’s (CEOE and CEPYME), the Royal Decree Law 32/2021 to structurally reform the Spanish labour market was published last December. The new labour reform focuses on the temporary nature of contracts. The new legislation comes into force on 30 March 2022. 

Changes in Temporary Contracts 

In the new labour reform, fixed-term contracts are only allowed in the following cases: 

  • fixed-term contracts for a specific work or services 
  • fixed-term contracts due to market circumstances 

In the new reform there can only be two reasons that justify the temporary contracts: 

1. Increase in production 

When the increase in production is occasional and unforeseeable: the contract cannot exceed 6 months (unless the sectorial CLA extends the maximum duration to 1 year). 

When the increase in production is occasional and foreseeable: short duration, it may be use for a maximum of 90 days per calendar year, and it cannot be used continuously.  

2. Replacement of a permanent worker 

The services of the person who replaces may begin to be provided before the absence of the person being replaced occurs (up to 15 days prior to the absence of the person to be replaced).  

It can be used to complete the reduced working hours of a worker and to cover a post during the selection process or promotion. (the duration cannot exceed 3 months) 

Employment legislation changes in Portugal 

In December 2021, the parliament approved new employment legislation in Portugal. This new legislation focuses on significant changes to remote work as well as a new rule on contact outside of working hours. The new legislation was entered into force on 1st January 2022.  

During the pandemic, many people worked from home and continue to do so. This legislation was not only created to protect home office workers but also to encourage more foreigners to select Portugal as a location for working remotely, as Portugal has become a major destination for so-called digital nomads.  

Changes to the legislation includes: 

  • Employee’s privacy to be respected 

The Labour Code now stipulates those employers must refrain from contacting employees during their rest period, except in case of force majeure. Companies that breach this right could face fines of up to €4,080. It has become a serious offense for employers to violate the employee’s privacy. 

  • Internet/Electricity bills Expenses covered by the employer 

The law requires employers to pay part of the electricity and internet bills/equipment of staff who work from home. 

  • Mandatory home office regime 

Home office regime is mandatory whenever required by the employee, under certain circumstances imposed by law, such as  

a) employees with child up to 3 years of age  

b) employees having children up to 8 years of age if the company has more than 10 employees hired: among other situations. 

How People2.0 can help?

People2.0 is the world’s largest global employer of record (EOR) and agent of record (AOR) services platform, created exclusively to serve the global talent ecosystem.

Whether you’re an independent recruiter with big ambitions or a large staffing agency with bigger ambitions, we can unlock access and engagement to the world of talent for your clients. 

With People2.0 you can be confident everything is done compliantly, thanks to our breadth and depth of expertise and deep local knowledge of compliance across more than 40 countries. 

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