Spain approves new labor decree for contract transparency

The Spanish Government has approved a Royal Decree to transpose a European Union directive aimed at increasing transparency and predictability in working conditions. The new regulations mandate that companies provide exhaustive written details in employment contracts regarding essential labor terms.

Key requirements include the explicit breakdown of base salaries, variable compensation, and all bonuses. Employers must also specify exact working hours (daily, monthly, and annually), shift patterns, and rest periods. Furthermore, workers now have the right to be informed about the use of algorithms or automated systems that influence decisions regarding hiring, task assignment, professional progression, or contract termination.

The decree also introduces stricter controls on probationary periods. While the general legal limit remains six months, any extension via collective bargaining must now be rigorously justified. Additionally, companies must detail the specific criteria and tasks used to evaluate employees during this phase. To assist with the transition, the government has established a 20-day grace period for companies to adapt, while existing employees can request missing information, which must be provided within 30 days.

The Spanish Confederation of Employers' Organizations (CEOE) has expressed dissatisfaction, considering the possibility of legal challenges on the grounds that the decree may infringe upon the hierarchy of laws and the existing Workers' Statute.