The application of the flat rate for employers' contributions

As is well known through the media, the so-called "flat rate" allows a fee of 100 Euros for permanent full-time contracts signed between 25 February and 31 December 2014; 75 Euros for those hired for at least 75% of the working day; and 50 Euros for those hired between half and three quarters of the working day.

The aim of the regulation is to create employment, and for this reason the Royal Decree-Law that establishes it requires that for its application it is necessary to increase the volume of employment, which is achieved by increasing the working hours; so that it can be deduced from its wording that it can be applied in the conversion of a temporary part-time contract into an indefinite contract, provided that such conversion entails an increase in the worker's working hours, as this implies an increase in the level of employment.

However, it seems that the General Treasury of the Social Security has a different opinion from the above, as it confuses the term "level of employment" with "increase in the workforce".

In its interpretation, it goes so far as to understand that even an increase in the hours of a temporary worker by converting him/her to a permanent one would not be valid, as the contracts must have been formalised after 25 February 2014.

This interpretation could be contestable and rebuttable, since, as the worker is not required to be unemployed or registered as a job seeker, if he/she leaves voluntarily, he/she could be re-registered in the company as a permanent employee, since among the groups of workers to whom the reduced company contribution for common contingencies does not apply are those who in the six months prior to the date of the formalisation of the contract had provided services in the same company or entity under a permanent contract, but nothing is said about those who had a temporary contract.

For this reason, we in the labour law department of this law firm, like other authors and doctrine, consider that clarification is necessary in order to avoid the legal uncertainty that is being generated by the wording of the regulation in relation to the examination of the maintenance of permanent employment and the level of total employment. The RD to which we have referred establishes that maintenance must be for a period of 36 months from the effective date of the open-ended contract with application of the reduction, and the control every 12 months, using the average number of open-ended workers and the average number of total workers in the month in which compliance with this requirement must be examined. Logic would suggest that the control would refer to the 12 months prior to the month in which compliance is to be examined, in order to avoid fraud.

However, this is not established in this way in the Royal Decree-Law to which we have referred, which is why we advocate the establishment of a criterion that gives companies legal certainty.