In line with the general guidelines established by the European Union, Law 14/1994 regulated for the first time in Spain the activities of temporary employment agencies, which involve supplying manpower to their client companies to cover their temporary needs. Law 31/1995, on the Prevention of Occupational Risks subsequently made changes to Law 14/1994 as regards the liability of client companies.

The reform of the Law on Temporary Employment Agencies by Law 29/1999 provides greater legal certainty to the workers of companies of this kind, in their labor relationships with client companies and encourages job security and improves their pay. Accordingly, the Spanish Parliament has placed workers from temporary employment agencies on the same footing as employees of client companies in terms of minimum pay. Disclosure obligations to employee representatives are also extended.

Pursuant to Law 29/1999, a manpower supply contract (statutorily defined as a contract between a temporary employment agency and a client company under which workers are supplied to provide services at the latter) can be concluded in the same circumstances, subject to the same conditions and requirements, and for the same term as those relating to a fixed-term contract entered into by the client company pursuant to the Workers’ Statute.

The latest reform introduced by Law 12/2001 in the area of contracts with temporary employment agencies permits a temporary employment agency to enter into an employment contract with a worker to cover successive manpower supply contracts with different client companies so long as the manpower supply contracts are fully stipulated when the employment contract is signed and, in all cases, they address one of the situations justifying the hiring of casual labor under Article 15.1.b) of the Workers’ Statute, with each supply of manpower having to be formalized in the employment contract.

The Temporary Employment Agency Law establishes various events in which companies are unable to enter into manpower supply contracts:

– To replace workers on strike in the user company.

– To perform activities and work subject to regulations because of their particular hazard to health or safety.

– When the company has cancelled the posts of work that it intends to fill by unjustified dismissal or for the causes contemplated for termination of the contract unilaterally by the worker, collective dismissal or dismissal for economic causes in the twelve months immediately preceding the date of the manpower supply contract.

– To lend workers to other temporary employment agencies.