Lesson 6: Types of Employment Contracts Based on Duration

AutorPilar Núñez-Cortés Contreras
Cargo del AutorProfesora Titular de Área. Universidad Loyola Andalucía

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1 Introduction

In this lesson we are going to study the types of employment contracts, based on their duration. They can be subdivided in open-ended and temporary contracts. We analyze their use, the different types of temporary contracts and their basic features.

2 Temporary versus open-end contracts

There are two types of employment contracts depending on their duration: temporary and open-ended contracts.

Temporary contracts


The temporary contract has an ending date (e.g. fifteen days, two months, one year) and must be used for covering eventual needs in a company.


A company will sign a substitute contract (which is a temporary contract in nature) if it needs to replace a secretary who is enjoying her maternity leave. The ending of temporary contract entitles an eight-day salary compensation for eachyear of working.

Open-ended contracts


The permanent contract does not have an ending date and must be used to cover indefinite needs.


A company will sign an open-ended contract to hire the Director of Human Resources services.

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The ending of permanent contract must be based on a legal cause (set by the Workers' Statute). If this cause is not sufficiently proved, the termination of the contract entitles workers to a 33 day salary compensation for each year of working. There is a maximum amount for this compensation which cannot exceed a 24 months salary (this is a new reduced compensation which has been set by the Labour Reform 2012). El RD 3/2012 has created a new indefinite contract for entrepreneurs. Only companies under 50 employees can make use of this contract. It needs to be a full-time contract with probationary period of one year. This new contract modality carries important tax and economic benefits.

3 Temporary contracts

According to the ES, there are several types of temporary contracts. Such contracts can be, among others:

  1. The services or work contract.

  2. "Eventual" contract

  3. The substitution or replacement contract.

3.1. The services or work contract


This contract is designed to hire workers who provide concrete services (autonomously) in a company. This contract lasts the period that is needed to provide this concrete service or work, with a maximum duration of three years. The CA can extend its...

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