Employment Law Bombshell Could Hit Most Large Spanish Businesses Financially

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Minister of Labour, Migration and Social Security, Yolanda Díaz Credit: La Moncloa flickr

SPANISH business and to a lesser extent even the unions are up in arms over a decision by the government to completely redefine the concept of subcontracting work out.

Many companies find that that it can be financially advantageous to decentralise their businesses and rather than employ staff on a full time basis (with all of the financial commitments this entails) and especially for short term projects, prefer to subcontract the work out.

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Smaller organisations often have a more relaxed attitude over employment contracts and are able to find workers who are prepared to accept temporary work without significant overheads but this could be a thing of the past under proposed legislation.

The government is saying that if a company does subcontract work out and has its own staff doing exactly the same work, then it must ensure that the subcontracted worker receives exactly the same pay and benefits.


The fear is that costs will rise almost across the board in Spain and that in the long-run, there will be fewer jobs overall as there will be less work as in many cases, potential customers look outside of Spain for their products to be produced.

It’s not just going to affect industry or construction but could stretch into retail, where some stores allow stores within stores to be set up, the health service where many doctors and nurses are employed via agencies (although in some cases their recompense is higher than employees) and indeed almost any walk of business.


Even councils could find that they have to take on more staff and increase local taxation.





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