After the labor reform that considerably restricted the use of temporary hiring in Spain, understanding the real difference between the two types of contract, and especially when a temporary contract is legal and when it isn't, has become more relevant than ever for any employee.
What a permanent contract is
It's the general form of employment in Spain: it has no end date agreed in advance, and it can only be terminated for legally established reasons (dismissal with justified cause, voluntary resignation by the employee, retirement, or other regulated grounds for termination), not simply by the passage of a set period.
What a temporary contract is and when it's legal to use one
After the labor reform, temporary contracts in Spain were restricted, as a general rule, to two specific grounds:
- Contract for production circumstances: to handle an occasional and unforeseeable increase in activity, or occasional and foreseeable situations of short, defined duration (with limits on maximum duration and on how many times a year this second type can be used).
- Replacement contract: to cover for an employee with a right to have their position held open (for example, during sick leave or a leave of absence), or to temporarily cover a position during a hiring process.
Outside these specific grounds, the general rule is that hiring must be permanent. A "temporary" contract signed without one of these grounds actually being present can be considered fraudulent, with the consequence that the contract is presumed permanent from the start.
Severance pay when each type of contract ends
| Type of termination | Severance pay |
|---|---|
| End of temporary contract (legal grounds, not a dismissal) | 12 days' salary per year worked |
| Unfair dismissal (permanent or temporary) | 33 days/year (capped at 24 months' pay) |
| Fair dismissal | No severance |
| Voluntary resignation | No severance |
It's important to note that if a "temporary" contract turns out to be fraudulent, its termination isn't treated as a simple end-of-contract with 12 days per year, but potentially as a dismissal, with the corresponding severance if it's declared unfair.
The intermittent permanent contract: a middle-ground arrangement
There's also the intermittent permanent contract (fijo-discontinuo), designed for seasonal or intermittent activities (for example, tourist seasons), which is permanent in nature (it has no end date), but involves periods of activity and inactivity throughout the year, with periodic call-ups depending on the company's activity.
What to do if you suspect your temporary contract is fraudulent
If you believe your temporary contract doesn't actually fit any of the legally established grounds, you can claim recognition of your status as a permanent employee, which has direct consequences for the severance pay you'd be entitled to if the contract were terminated in the future.
Estimate your approximate severance pay
Our severance pay calculator helps you calculate an estimate of the severance you'd be entitled to based on how your contract ends and your length of service at the company.