UK: Key Differences Between Spanish And English Employment Law: An Employer's Guide

Last Updated: 19 January 2015
Article by Sarah Gill

Summary and implications

The Spanish legal system is a civil law system based on legal codes and laws that have their roots in Roman law. Like its English counterpart Spanish employment law is ever-changing.

The governments of both jurisdictions have made changes to employment law in an effort to help business, control costs and stimulate the economy. For example:

  • in England and Wales the length of service that is required to claim unfair dismissal has increased from one year to two years and pre-claim conciliation and tribunal fees have been introduced; and
  • the Spanish government has put in place a package of incentives to promote job creation and entrepreneurship.

In conjunction with our Broadlaw Group partner, Roca Junyent, we have prepared an overview of some of the key differences between English and Spanish employment law.

Watch this space for similar comparisons with other jurisdictions.

English employment law versus Spanish employment law

Issue England and Wales Spain

Do you need to have a written contract of employment?

No, but the employer must provide the employee with a written statement of certain particulars of employment as prescribed by section 1 of the Employment Rights Act 1996.

No, except for temporary contracts of employment, which must include amongst other terms the reason why the temporary worker is required (for example, to work on a specific project) and some types of contracts included in a public programme for the promotion of employment (for example, an apprenticeship contract).

Is there a national minimum wage?

All UK workers who are over school leaving age must be paid the national minimum wage. The hourly rate depends on the worker's age and the rate is adjusted in October of each year. The current national minimum wage limits are as follows:

- 21 and over: £6.50

- 18 to 20: £5.13

- Under 18: 3.79

- Apprentice: £2.73 (for those aged 16 to 18 or for those aged 19 or who are in the first year of their apprenticeship).

The official minimum wage is set by the Spanish Government each year. The rates for 2014 (for all age groups and industries) are €645.30 per month or €9,034.20 per year (including 12 monthly and two extra payroll payments).

Collective agreements may however provide for higher amounts to be paid.

What rights do employees have to paid time off when they are sick?

Subject to satisfying the statutory qualification requirements employees who have been off work for four or more consecutive days receive statutory sick pay (currently £87.55 per week) for up to 28 weeks. This may be supplemented by contractual or discretionary sick pay by the employer.

Employees receive social security payments for up to a maximum of 18 months when the employee has been off work for four or more consecutive days for common illness or accident. If the sick leave is due to an occupational illness or accident, employees are entitled to be paid from the day following the day off work.

Some employers, on their own initiative or in accordance with the provisions of a collective agreement, supplement the social security payment to match the employee's current salary.

Is there a minimum holiday entitlement?

All employees in England and Wales have the right to 5.6 weeks' paid holiday. This equates to 28 days per annum (based on a five-day week).

The 28 days comprise the employee's right under the Working Time Directive to a minimum of four weeks' annual leave (20 days for full time employees) each year and the domestic right to an additional 1.6 weeks which represents the number of public holidays in England and Wales, although leave does not have to be taken on public holidays.

Once an employee has been continuously employed for one year, they are entitled to at least 30 days' paid holiday and an additional 14 public holidays.

Is a fee payable when a tribunal claim is brought?

Claimants are required to pay a fee at the time they submit their claim form. There are two levels of fees depending on the type of claim: £160 is payable for simple claims referred to as Type A claims (e.g. claims for unpaid wages, notice pay, redundancy payment, failure to provide time off to attend an antenatal class); and £250 for other more complicated types of claim referred to as Type B claims (e.g. claims for unfair dismissal, whistleblowing and discrimination.

A hearing fee of either £230 (Type A claims) or £950 (Type B claims) is also payable.

Fees are also payable by respondents. For example, £100 is payable on an application to set aside default judgment; a fee of £60 is payable to dismiss a claim following settlement; and a fee of £600 is payable for judicial mediation.

The tribunal can order the losing party to pay the fees paid by the other party. Applications made to the Employment Appeal Tribunal also trigger the payment of a £400 issue fee and a £1,200 hearing fee.

Generally speaking an employee is not required to pay a fee to submit a claim or to appeal a judgment. In certain circumstances the Tribunal could require the employee to pay a penalty amount in the event of a lawsuit that is frivolous and/or vexatious.

What limits are there on working time?

Unless an exemption applies, average working time (including all overtime and time spent working for others) must not exceed 48 hours per week averaged over a 17-week reference period or such other relevant period as agreed under a relevant workforce agreement.

Employers must take all reasonable steps to ensure that this limit is complied with. Failure to do so is a criminal offence.

Employees in England and Wales may however "opt out" in writing of the maximum working time limit.

Employees have the right to "opt back in" by giving written notice to their employer.

Employees are also entitled to:

(a) a daily rest period of 11 hours' uninterrupted rest per day;

(b) a weekly rest period of 24 hours' uninterrupted rest per week; and

(c) a rest break of 20 minutes when working more than six hours.

Special rules apply for night workers.

An employee's average working time is either determined by a collective agreement or the employment contract with a working time maximum of 40 hours per week over the course of a year.

It is possible for working time to be spent irregularly. This is becoming increasingly common in Spain. It means that employees can work longer hours during periods of high work demand provided they work shorter hours on other occasions. Doing so avoids the need for employees to work overtime (use of which is restricted and incurs a cost).

Paid overtime may not exceed 80 hours per year.

Between the end of one working day and the beginning of the next, at least 12 hours' rest must elapse.

Hours of work cannot exceed nine hours per day, unless a collective agreement or, an agreement between the company and the employee representatives stipulates otherwise (although the rest period between working days cannot be varied).

Special rules for workers under the age of 18, night workers and shift workers apply.

If employees work six hours or more they are entitled to at least a 15-minute rest break.

What maternity rights do employees have?

Employees are entitled to: 26 weeks' ordinary maternity leave (OML) and 26 weeks' additional maternity leave (AML). A woman must take a minimum of two weeks' maternity leave immediately after the birth of a child.

Employees may be entitled to company maternity pay, statutory maternity pay (up to 39 weeks' comprising six weeks' at 90 per cent of average weekly earnings and then for the remaining 33 weeks currently £138.18 per week or 90 per cent of average weekly earnings (whichever is lower)) or if the employee does not qualify for statutory maternity pay, maternity allowance.

In the UK, shared parental leave has recently been introduced (see our briefing on shared parental leave). It allows eligible mothers, fathers, partners and adopters to choose how to share time off work after their child is born or placed for adoption. The first two weeks after the birth of a child cannot however be shared.

Statutory maternity leave is currently 16 weeks' paid leave from work, of which six weeks must be taken immediately after the birth of the child. In the case of a multiple birth, this period is extended by two weeks for each additional child.

The length of maternity leave may also be extended because of medical complications or when the child has a disability.

Social security benefits are paid to employees on maternity leave. Employees must generally satisfy a qualifying period of paid employment. The applicable qualifying period varies according to their age. The monthly Social Security benefit is equal to 100 per cent of the mother's average monthly salary prior to her going on maternity leave.

Special rules apply to part-time contracts, situations where the employee has more than one job and adoptions.

Fathers are also entitled to 13 days' paternity leave. Paternity leave can be increased also for multiple births.

The Spanish government plans to review the paternity leave regulations during 2015.

A male employee can also share his partner's maternity leave if either:

- there is a mutual agreement between the parents;

- the mother does not satisfy the qualifying period to receive social security benefit whilst on maternity leave; or

- the mother dies whilst on maternity leave.

If maternity leave is shared the father can take it either simultaneously with the mother or after the mother's period of leave that she has spent from the maternity leave. The mother must take a minimum of six weeks' leave immediately following the birth.

How common are collective agreements and what part do they play in the relationship between employer and employee?

Collective agreements are common in some sectors such as the industrial, manufacturing and transport sectors and in the public sector, where there is a history of trade union recognition.

Most recognition arrangements in England and Wales tend to be voluntary but there are circumstances when a union can seek statutory recognition.

Where there is trade union recognition there will be collective bargaining arrangements in place in relation to certain terms and conditions of employment. For a term of a collective agreement to be enforceable, it must be incorporated into the employee's contract of employment.

Collective agreements are much more prevalent in Spain. Employment contracts are generally regulated by the provisions of the Workers' Statute. However, collective bargaining regulates many aspects of the employment relationship.

Many collective agreements have been negotiated for a specific industry in the entire country, such that all companies in Spain that belong to that specific industry will automatically be bound by the rules established in the nationwide collective agreement. Other collective agreements apply only to a specific province or limited geographical area, or, if the collective agreement is negotiated at a company level, to a specific company.

Important employment issues (e.g. wages or working time) are regulated by the terms of the collective agreements.

Company collective bargaining agreements can take precedence over their sector equivalents in some legal matters. For example, in relation to days and hours worked.

Almost all companies in Spain are subject to a collective agreement and should be aware of and comply with the applicable collective agreement's rules.

What basic rights do employees have when their employment contract is terminated?

Employees are entitled to receive notice of termination (contractual or statutory notice) unless the employment is terminated summarily for gross misconduct.

Payment in lieu of accrued unused holiday entitlement will be payable.

If the employee has more than two years' service there needs to be a fair reason for dismissal and a fair procedure should be followed before a decision to dismiss is taken. The ACAS Code of Practice on Disciplinary and Grievance Procedures may need to be complied with depending on the reason for dismissal.

In the event an employee is made redundant that employee is also entitled to a statutory redundancy payment (if they qualify) and may have a contractual entitlement to an enhanced redundancy payment.

The law relating to severance payment in Spain is complex.

There is no service requirement to qualify for a severance payment.

In Spain there are two main ways to terminate an employment contract by the employer:

- a dismissal based on disciplinary grounds (a disciplinary dismissal); and

- a dismissal for economic, technical, organisational or production reasons (redundancy).

Where employees are dismissed on disciplinary grounds, there is no duty to give them notice of dismissal. However, a statutory specific procedure must be followed. The employer must specify all the facts giving rise to the dismissal and the date on which the dismissal will take effect, in a letter.

If the dismissal is declared unfair (a dismissal without cause) by a judge, the employer may reinstate the employee or pay a statutory severance payment.

Employees affected by a redundancy will be entitled to receive a legal severance payment and an advance notice in writing of the termination of the contract.

In both cases (dismissal and redundancy) the employee will be entitled to payment for accrued but untaken holiday and any other payment that has accrued up to the date of termination.

Special rules apply to collective redundancies and employees with protected characteristics.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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