The duration of contracts falls to its lowest level since 2006, with 46.3 days on average, despite the labor reform

The duration of contracts registered in public employment services stood at an average of 46.36 days in 2023, its lowest figure since 2006, despite the fact that the labor reform brought the total number of temporary contracts to historic lows, according to data from the State Public Employment Service (SEPE) collected by Europa Press.

If the data for 2023 is compared with that of 2019, in the absence of a pandemic and before the entry into force of the 2021 labor reform aimed at promoting indefinite hiring, the average duration of contracts signed last year was almost three days lower.

In 2023, 15,444,205 contracts were carried out, 15.6% less than in 2022. Of them, more than 8.8 million were temporary contracts, a figure that is the lowest in the historical series, 21.8% lower than the of 2022 and around half of that of the 2015-2019 period, before the labor reform.

Contracts with a duration equal to or less than one week totaled more than 3.1 million in 2023 and represented 20.6% of the total contracts, a percentage slightly higher than that recorded in 2022 (19.7%) but far from the 27.27% from 2019, before the labor reform. Compared to 2006, the proportion of contracts with a duration equal to or less than seven days increased in 2023 by six points.

Contracts with a duration of between seven and fifteen days accounted for 5.78% of all contracts signed in 2023, up from 5.3% in 2022, while those with a duration of 15 days to one month also increased their weight in total hiring, from 7.08% to 7.23%. In total, a third of the contracts signed in 2023 lasted one month or less.

At the same time, contracts with a duration greater than or equal to one year only represented 0.33% of the total contracts signed in 2023, but this percentage is higher than that of 2022 (0.28%), similar to that of 2021 and higher compared to 2019 (0.25%). On the other hand, it is lower than the 0.50% of 2006.

The labor reform established the indefinite contract as the ordinary one, ended contracts for work or services and introduced formulas to discourage very short-term contracts through a penalty in business contributions.

Furthermore, it erased the difference between fixed periodic and fixed-discontinuous contracts, established a new definition of the concept of fixed-discontinuous and determined the possibility that, through this modality, activities carried out under commercial contracts could be carried out. or administrative, such as formalizing a fixed-discontinuous contract between a temporary employment company and a person hired to be assigned.

Thus, the number of permanent-discontinuous contracts has skyrocketed since the labor reform. In 2023, more than 2.3 million contracts of this modality were carried out, almost nine times more than those carried out in 2019, before the reform and the pandemic, and 17 times more than what was signed in 2006 (132,181 contracts fixed-discontinuous).

With the 2021 labor reform, the volume of temporary contracts has been reduced to historic lows and the weight of permanent contracts in the total has skyrocketed to almost 43%, compared to the percentage close to 10% that was registered before the entry into force. of the rule.

In fact, in 2023, 6,620,983 indefinite contracts were signed, equivalent to 42.87% of the total, with a decrease of 5.8% compared to 2022. Among the indefinite contracts carried out in the whole of last year, 2,756,443 They were full-time, 7% less than in 2022, and 1,550,774 were part-time, almost 11% less than the previous year.

Fedea: The reform has increased “the mortality” of the indefinite

Despite the fact that the weight of permanent contracts has more than tripled compared to the data before the reform and that there have never been so few temporary contracts as now, the average duration of the contracts is at a minimum, with only 46 .3 days compared to the 79.13 days average in 2006.

Some experts point out that this paradox is due to the fact that, although the labor reform has driven up the conversion of temporary workers into permanent ones, both in the ordinary permanent and in the fixed-discontinuous one, it has also increased the “mortality” of indefinite contracts. ordinary, so that, although more contracts of this type are made, their duration is shorter.

This is indicated by Fedea in a recent report in which it carries out a preliminary evaluation of the 2021 labor reform using a database that covers all daily records of creation and destruction of Social Security affiliates.

According to Fedea’s conclusions, although the labor reform has proven to be “very effective” in reducing the rate of “contractual” temporary employment, it has not been so effective in mitigating job insecurity or instability.

Fedea points out that the strategy followed by the Spanish reform has consisted of “drastically” restricting the use of fixed-term or temporary contracts “without any variation in the flexibility of ordinary indefinite contracts.”

“However, to avoid a decrease in the overall flexibility of the system, the reform has encouraged the use of other variants of indefinite contracts that offer less stability, such as the fixed-discontinuous contract. These contracts, despite being labeled as indefinite, do not offer the same level of job security to workers as traditional indefinite contracts,” warns Fedea in its study.

The report shows, on the one hand, that the conversion of temporary workers into permanent ones has increased, but, on the other hand, it notes a reduction in the duration of ordinary indefinite contracts.

To evaluate the impact of the labor reform and its effectiveness in reducing the temporary employment rate, the Fedea study analyzes the patterns in the calendar of daily flows of job creation and destruction.

This is because the Spanish labor market has “very marked” calendar patterns: hire on Monday to fire on Friday, hire only for the weekend and hire on the first day of the month to fire on the last day of the month.

Using a time series model in which patterns of job creation and destruction are compared before and after the reform, Fedea does not find statistically large differences between them, except for a decrease in job destruction at the end of the month, which it has been reduced.

According to Fedea, the new labor framework has generated a new distribution of employment contracts that reduces the temporary employment rate to the European average, “but replicates almost exactly the previous situation in terms of job stability for workers.” “In aggregate terms, the labor market does not show the changes that a priori would be expected in the duration of employment as a result of the decrease in temporary employment,” warns Fedea.

The USO union has also warned of the shorter duration of contracts and that the job stability that the labor reform has brought is only on the surface of the data, since, before this rule, despite there being fewer indefinite contracts, contracts lasted longer.

“Contracts have been perverted, both indefinite and fixed-discontinuous, and temporality is maintained even though attempts are made to dilute it among the statistics,” recently denounced the general secretary of USO, Joaquín Pérez.