The ordinary indefinite contract is something that almost every employer wants. It has become the first choice of companies when it comes to hiring thanks to the latest labour reform of 2021/2022. This reform has introduced some modifications and nuances that are important to bear in mind.
The indefinite contract offers great benefits for both companies and employees, although it should be noted that each individual contract can establish specific clauses. Are you interested in finding out more? Then read on!
What is a permanent contract?
Indefinite contracts are those that are signed between the employee and the employer without a set end date. Here we can see the following types of indefinite contracts:
Full-time indefinite contract: This refers to one in which the employee works full-time, usually 40 hours per week.
Part-time indefinite contract: This is a contract in which the working day is partially reduced. However, there is still no employment end date.
Discontinuous fixed-term contract: In this case, the employee is a permanent employee within the company, however, not for a consecutive period of time. In other words, the employee will only work for a specific period of time each year.
Advantages of permanent contracts
As previously mentioned, permanent contracts benefit both the company and the employee. Below, we will tell you about the most important benefits:
- Right to severance pay in the event of dismissal: This will vary according to how long the employee has worked for the company. Compensation will be 20 days for each year worked in the company, with a maximum of 12 months, if the dismissal is justified. On the other hand, if the dismissal is unjustified, the compensation will be 33 days for each year worked, with a maximum of 24 months.
- More security: Employees who have an indefinite contract have greater job stability.
- Holidays: Like any other worker, permanent employees are entitled to at least 30 days of holiday per year.
- Severance pay: Permanent employees are entitled to severance pay.
- Dismissal with prior notice: In the event that the company wishes to terminate the services of the permanent employee, it must give notice within the time stipulated in the individual contract or in the collective bargaining agreement. If this does not occur, the employee is entitled to be compensated by the company for each day that notice was not given.
- Deductions: The employer can obtain substantial tax deductions when setting up indefinite contracts for its employees.
- Allowances: Companies will obtain bonuses within the Social Security contributions for 3 years for each indefinite-term contract.
As you can see, the alternative contract is an ideal option to guarantee the well-being of the employee and it is a source of income for companies. If you are about to sign a permanent contract and you have any questions or concerns regarding labour, do not hesitate to contact GyV. We are at your disposal and are waiting for you!