Spain successfully campaigns against fraudulent contracts

by Lorraine Williamson
fraudulent contracts from companies

MADRID – Spain’s government and labour inspectorate are breaking all records this year when it comes to detecting fraudulent contracts. Temporary workers in Spain are still being exploited, but the current ‘plan de choque’ exposes many Spanish companies. 

At the end of February 2021, the Labour Inspectorate issued a letter to several companies in Spain. It discovered cases of employees who should be in permanent employment while still listed as temporary workers and being paid. This warning appeared to work, because by April 22 almost 90,000 temporary contracts were converted into indefinite period contracts. 

Not only employees are disadvantaged 

“The Labour Inspectorate has achieved great results with this massive action against Spanish companies,” said the Labour Inspectorate and Social Security Association. “Unjustly leading these employees does not only harm the employee himself. Since he is paid less, he does not accrue pension and sickness benefits.But also, it constitutes an attack on the social security system in general.” 

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Previous Spanish labour inspectorate campaigns also successful 

In 2018, the Labour Inspectorate carried out a similar campaign after which 61,445 contracts were converted. The last action in 2019 granted 59,129 open-ended contracts. The labour inspectorate is not ready for this year; the inspectorate says it will write to nearly 60,000 companies in the coming months where contract fraud has been discovered involving just over 122,000 employees. 

Highest number of fraudulent contracts in Andalucia 

Although the 2021 campaign is not over yet, the success rate for this year is around 70%. This means that 70% of all questionable contracts discovered have been converted to open-ended contracts. The highest number of incorrect contracts (30%) was detected by the labour inspectorate in the Andalucia region. 

Legislative amendment against fraud with temporary contracts 

At the same time as this large-scale campaign, the Spanish government, together with the social partners, is changing the law on the provision of temporary and permanent contracts. One of the issues currently being discussed is the maximum term of a temporary contract. Both entities want to set this term at a maximum of one year. 

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