Spain: Employment Alert: Law 9/2017 On Public Sector Contracts

Last Updated: 20 June 2018
Article by Alfredo Aspra and Jaime Silva Castañón

This Law, of an administrative scope and whose entry into force is scheduled for March 9th of this year, introduces important new social and employment issues

On 9 November 2017, the Official State Gazette published Law 9/2017, of 8 November, on Public Sector Contracts, transposing the European Parliament and Council Directives 2014/23/EU and 2014/24/EU of 26 February 2014 (hereinafter referred to as "LCSP").

This Law, of an administrative scope and whose entry into force is scheduled for March 9th of this year, introduces important new social and employment issues which, in a succinct manner, are set out below.

1. - Objectives of the LCSP

The LCSP aims to introduce greater efficiency in public procurement in Spain, redesigning the award criteria and including qualitative, environmental and social aspects related to the subject matter of the contract.

The Community Directives transposed into Spanish law by means of the LCSP have, among other objectives, the aim of increasing the efficiency of public expenditure, facilitating the participation of SMEs in public procurement and allowing public authorities to use procurement to support common social and environmental objectives.

For this reason, the new LCSP reinforces the guiding principles of public sector contracting (transparency, advertising, equality, non-discrimination and free competition) and also simplifies procedures to reduce administrative burdens and facilitate access to SMEs.

2. - Main developments of the LCSP in the employment field

The main impacts on employment law of the new LCSP are as follows:

  1. - Obligation of the awarded company to comply with the sectorial treaty regulations:

    Throughout the LCSP there are several references to the sectoral agreement (and not the company agreement) as an agreement to be taken into account by companies that want to qualify for service concession contracts with the Public Administration.

    Therefore, the new LCSP requires that the reference regulation for companies wishing to bid for public contracts be the sectoral agreement, thus displacing the possible company agreement that has generated controversy by dissipating the priority application of the company agreement that introduced the RDL 7/2011, of 10 June, urgent measures for the reform of collective bargaining and, more forcefully, the aforementioned Employment Reform of 2012.

    The aim of this measure is to avoid a reduction in the working conditions of workers who, by means of an invitation to tender from their companies, are included in the contractual sphere of the Administration.

  2. Subrogation in employment contracts and information obligations:

    Where the successful tenderer is subject to a legal, contractual or collective bargaining agreement of general effectiveness, or an obligation to subrogate itself in certain employment relationships, the contracting authorities must provide the tenderers (in the tender dossier itself) with information on the terms and conditions of the employees' contracts which are affected by the subrogation which is necessary to enable labour costs to be assessed. To this end, the company that carries out the service subject of the contract to be awarded and that has the status of employer of the workers concerned shall be obliged to provide the following information:

    1. - Listing of the personnel subject to subrogation together with details of category, type of contract, working day, seniority date, expiry of the contract, gross annual salary of each worker.
    2. - The collective agreement of application, as well as all the agreements in force applicable to workers affected by subrogation.

    If, once the subrogation has taken place, labour costs are higher than those indicated by the former contractor to the contracting authority, the contractor shall have direct action against the former contractor.

    1. - Remunicipalization of services by the Public Sector:

      The obligation of subrogation in employee contracts, whether there is a legal obligation (business succession), contractual or deriving from a generally effective collective bargaining agreement, also applies in the event that a public administration reverses/remunicipalises the service. The remunicipalization consists of recovery by the Administration of services that were being developed by private companies.

      Therefore, in the cases in which a succession of company ex-article 44 of the Workers' Statute occurs due to the remunicipalization of the service, the Administration must subrogate itself in the contracts of the workers who have been carrying out this activity. Greater doubts arise as to whether an ex-Convention or a general agreement is a successor to an ex-Convention, since in principle the Administration would fall outside its scope of application.

      The subrogation of workers by the Public Administration raises serious questions about their legal status. Additional Provision 26 and 34 of the General Law of State Budgets (Ley General de los Presupuestos del Estado - LPGE) does not allow the Public Administration to automatically incorporate workers as public employees, since they must have access to vacancies through a competition where the principles of equality, merit and capacity are governed. It is therefore not clear whether the subrogated workers will become (a) indefinite, non-regular workers or (b) a freeze on the private legal status as a new category known as "subrogated personnel", so we will have to wait for our courts' forthcoming pronouncements on this matter.

    2. - Impossibility of subrogation imposed by public tender specifications:

      Public procurement contracts may not impose ex novo subrogation of workers. Consequently, unless the cases required by Article 44 ET or imposed by a Collective Bargaining Agreement occur, the specifications shall not have such power.

    3. - Redefinition of the principles to be taken into account in public procurement:

      The price and budget of the tender must include a breakdown, with gender and occupational category breakdown, of the estimated wage costs based on the reference employment agreement.

      One of the fundamental objectives pursued by the new LCSP is greater transparency in tendering procedures, while at the same time implementing the necessary mechanisms for adequate protection of workers and compliance in general with social and employment obligations; to this end, the criterion of the most economically advantageous offer is replaced by that of better value for money.

      There are also numerous instruments designed to promote equality and non-discrimination of certain groups. In particular, it will be possible to apply social criteria of tie-breaking in the face of equality of offers (disabled persons, gender, etc.), to require specific labels as a means of proving compliance with certain social requirements (e. g. equality mark). Finally, those companies obliged to have an Equality Plan must comply with this obligation in order to contract with the Administration.

    4. - Establishment of coercive measures (fearlessness, reckless dismissal, termination of contracts, etc.) to guarantee compliance with employment obligations:

      In order to strengthen workers' employment guarantees, coercive measures are established to penalize non-compliant contractors, such as:

      1. - Possibility of rejecting abnormally low bids (referred to as "reckless dismissals") if they are found to be due to non-compliance with social or employment obligations.
      2. - Prohibition of contracting with entities that have been sanctioned for very serious infraction in employment matters, as established in the Law on Offenses and Penalties in the Social Order, as well as in employment integration matters, or condemned for a crime against the rights of workers.
      3. - Prohibition of contracting with those entities with more than 50 workers who do not meet the requirement that at least 2% of their staff are disabled workers.
      4. - Imposition of penalties of up to 10% of the contract's budget, or even its termination, in the event of non-compliance or defective compliance with the special execution conditions established by the contracting authorities, which may relate, among other things, to the promotion of employment among people with particular difficulties of insertion in the employment market, to the elimination of employment inequalities between men and women, to the fight against unemployment, to the promotion of training in the workplace, and with character.

c. - Entry into force and application

The entry into force of the LCSP will generally take place 4 months after its publication, i.e. 9 March 2018.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions