Understanding Labor Laws: Common Work, Group Contracts, and Illegal Assignment
Common Work in Spain
Common work, as regulated in Article 10.1 of the Workers’ Statute (Estatuto de los Trabajadores – ET), is a way of organizing work where the employer retains their rights and duties towards each individual worker. In this model, the employer assigns a task to be jointly performed by multiple workers already hired by the company.
Group Contracts
Distinct from common work is the group contract, outlined in Article 10.2 ET. In this arrangement, the employer enters into an employment contract with a group of workers considered as a whole. The workers in the group are not considered individual employees of the company. Recruitment is conducted with the group as a unit, represented by a group leader. This leader acts as the intermediary between the group members and the employer.
The employer does not hold the power of direction over the individual workers; this power is held by the group leader. The group leader typically receives remuneration from the group, which is then distributed among the members.
Associated Workers
Article 10.3 ET covers the concept of the associated worker. This does not refer to social workers in cooperatives but rather to an aide hired by a worker. For the associated worker to be employed, the primary worker must request their recruitment. The associated worker assists the primary worker in their duties.
Illegal Assignment of Workers
Illegal assignment of workers often occurs through a contract that is not what it seems. A common scenario is when a contractor is a company seemingly created by the principal employer.
Another typical case involves two legally constituted companies, where workers from one company actually work for the other, and the latter assigns them tasks without holding the power of direction over them.
Illegal assignment can also occur when a temporary employment agency assigns workers in situations prohibited by Law 14/1994 on Temporary Employment Agencies.
Criteria for Identifying Illegal Assignment
Case law and Article 43 of the Workers’ Statute, as amended by Law 43/2006, provide criteria to determine if an assignment is illegal or a legitimate contract for works and services:
- The contractor must possess a sufficient organizational infrastructure.
- The organization, control, and direction of work activity must belong to the contractor, without prejudice to the general supervisory power of the principal employer.
- The contractor must assume real business risk, indicated by the fact that they set the wages for their services and not the principal company.
- The object of the contract must be a specific and targeted activity, distinguishable from the principal’s activity, even if they materially coincide.
Responsibilities Arising from Illegal Assignment
Both the transferor and transferee are jointly and severally liable for all obligations owed to the workers, including social security contributions.
Under Article 43.4 ET, workers affected by illegal assignment can choose to acquire permanent status in either the transferor or transferee company, provided both are legally incorporated. The worker will have the same rights and obligations as other workers in the same category in the chosen company, and their seniority will be calculated from the start of the illegal assignment.
Both the transferor and transferee may face administrative liability under Article 8.2 of the Law on Infractions and Penalties in the Social Order (TRLIS). If the assignment is deemed a crime, they could face criminal liability under Article 312.1 of the Penal Code, which carries penalties of 2 to 5 years imprisonment and a fine.