De Cotta Law - Official Blog

Update on the new Employment Law reforms in Spain By Maria Corder, Solicitor with local law firm De Cotta Law

The new reforms, although largely unpopular with workers, will be welcomed by employers. The generous payment scheme on dismissal which Spain had was often a major obstacle for businesses in the current economic climate as the option of dismissing an employee in an attempt to reduce costs could be an expensive one. The high severance payments could also have been seen as a deterrent to hiring and the aim of the new reforms, which include the reduction of the severance payment, is said to be to increase employment.

(Below is the full article published in The Andalucian)

 

British workers overseas – Employment Law News from De Cotta Law

Where employees work abroad even for many months at a time they may still be entitled to claim the range of rights including unfair dismissal under the British legislation, the Employment Rights Act 1996 (ERA `96).  This could be beneficial as these rights can be wider than those provided under Spanish law. It used to be the case that the ERA `96 did not apply to `any employment where the employee ordinarily works abroad´ but this clause was removed in 1999 and there is now no statutory provision dealing with this issue, rather it is a matter of case law.  To fall within this legislation, the employee has to prove that there is a sufficiently close connection with Great Britain.  The employees in the cases of Serco v. Lawson (2006) and MOD v Wallis (2010) were successful in substantiating this. In the case of Serco v. Lawson, a UK company employee was working in the Ascension Islands and all services were carried out there. The Judge gave two circumstances where an employment relationship might be sufficiently closely connected with GB so as to enable an unfair dismissal claim to be made under the British legislation and these are: (i) where an employee is posted abroad to work for a business conducted in Britain and/or (ii) where he is working in a political or social British enclave abroad.

In MOD v. Wallis the employees were employed by NATO in Europe.  These employees were the wives of armed forces personnel and were employed as such by reason of their husbands´ employment. This was sufficient to establish the connection as they were said to be working in a similar situation to (ii) in Serco and were entitled to claim unfair dismissal notwithstanding that they were not employed within GB. The employees also succeeded in claiming sex discrimination on the basis that it is a matter of EU law and therefore irrelevant which national law is applicable, provided that it is the law of a member state within the EU.

However in relation to unfair dismissal, the recent case of Duncombe & others v. Secretary of State for Children, Schools and families (2011) narrowed the criteria somewhat and held that employees working or based abroad can claim this right in GB only in exceptional circumstances where the employment has much stronger connections with the country and with British employment law than with any other system of law.

 

It cannot therefore be assumed that responsibility for an employee passes entirely to the overseas organisation in these circumstances.  It will depend on the facts of each case. To obtain advice as to British and Spanish employment rights and the applicable law please contact Maria Corder.

 

T: (+34) 951 315 161 F: (+34) 951 315 162

E: mariacorder@decottalaw.net

Post: Spanbox B220, Apartado 178, 29100 Coín, Málaga

Or drop into De Cotta Law’s new office, opposite La Trocha: Local 6, Sierra Chica, 29100 Coín, Málaga

 

Who Can Legally Come To Spain & Work? What Documents Are Needed To Work, Pay Tax And Social Security?

An increasing number of people are now moving to Spain to live and work. Thus, for them, the first thing to bear in mind,  is that EU citizens can work in Spain without a work permit and without having to apply for “residencia”. All you will need is to get a NIE number, for that you need to go to the extranjeros department at your nearest Comisaria (the police station for the national police force, not the local police).You will need to take your passport. The forms are fairly straightforward and you will have your NIE number within 2-6 weeks of applying.

Obtaining a contract of at least 6 months from your employer will guarantee you the same rights as a Spanish employee. Temporary contracts are generally offered for 3, 6 or 9 months . After this contract expires, to keep you on, the employer has to offer  a long term contract. They are not allowed to keep offering you short-term contracts. Spanish Social Security contributions start as soon as you start working in Spain. Employer and employee contributions constitute the main social security financing. However, the employer pays the greater share. Personnel are classified into labour categories for the purpose of determining their social security contributions, and the government establishes the maximum and minimum contribution rate. The Spanish Security System includes benefits for health care,(sickness or maternity), injuries at work, unemployment, pensions, invalidity and death benefits.

To work legally self-employed, it is known as being  “autonomo”, in which case you’ll be paying all your own taxes and social security payments. To become “autonomo” in Spain you will need the services of a gestor (similar to an accountant). They will register you with Hacienda (tax office) as being self employed and will do your quarterly and annual accounts. Make sure you choose a good, English speaking gestoria as you will be relying on them to work out your IVA (VAT) and tax returns.

 In Spain you do not need a VAT number as your NIE number will be your equivalent. There is no exemption from charging IVA, the smallest Company must charge IVA where applicable.

 Each quarter you must present your invoices (payments in and out) to your gestoria so that they can work out your IVA bill and your tax bill. You do this each quarter and at the end of the year everything is totalled up to see whether you owe additional tax or are due a rebate.

One monthly payment you must make every month to be “autonomo” is your social security contribution. Currently this is a minimum EUR 241 per month . This is like your national insurance contribution in the UK but unlike the UK, in Spain it is compulsory. You can opt to pay a higher level, which will give you a higher pension.

Your social security payments will entitle you to the same state services as a Spanish person such as free health care etc.

Should you be dismissed from your Spanish job, and do not agree to the reasons, you can make a demand for conciliation within 20 days of receiving the dismissal. There is no presentation of evidence here and as so relies on an agreement being reached between the two parties. If one is not reached you may then bring a case in the labour court. If your dismissal is found to be unjust you will receive 45 days compensation for every year worked.

Broadly speaking, the wages are lower than those in northern Europe but the cost of living is lower and the overall lifestyle better.

For more information on this subject, or to make an appointment for a private consultation, please contact us at De Cotta McKenna & Santafé on:

Tel.: +34 952 931 781
Fax: +34 952 933 547