When vacation is taken by some of the employees, especially when it coincides with a significant number of workers, it may cause an imbalance in company business and the need to hire other workers to substitute those on vacation.
On certain occasions, this imbalance may be resolved using internal flexibility measures, such as the relocation of other workers or overtime. However, it is not uncommon for a company to prevent its business from being altered by hiring workers to cover its staff on vacation.
The doubt then arises as to the best type of contract to hire workers whose services are to be limited to the time or times at which the staff are on vacation.
Although it could be considered that relief contracts could be the best solution in such cases – considering that during vacation time, they could be similar to an absence caused by sick leave-, this option should be discarded because worker vacation cannot be purpose of a relief contract.
Relief contracts are used to replace workers with the right to keep their position pursuant to a regulation, collective-bargaining agreement or individual agreement, which means that the substituted worker’s contract will be suspended or inactive for a certain reason. However, vacation does not imply a suspension of a contract, but “merely an ordinary interruption in the provision of services that does not produce a vacancy as such”, as established by the Supreme Court in its judgment of October 30, 2019. Therefore, the use of a relief contract to cover vacation would lead to its classification as fraudulent.
The same conclusion arises in relation to contracts for project work or services, given that this type of contract is intended for independent and specific work within the company of an initially uncertain term of duration. The objective of replacing one or more workers during their vacation is to carry out the same activities they perform for a certain period of time (coinciding with the term of vacation), which means that the circumstances do not fulfill the definition nor requirements of this type of contract.
However, casual contracts to cover temporary demand for production, which are intended to cover the accumulation of work or excess orders, do appear to comply with the objective of covering vacation and this option has been frequently endorsed by legal doctrine. Labor courts have understood that the characteristic feature of a contract due to the accumulation of work is the specific disproportion existing between the work to be performed and the staff available, in situations arising either due to an occasional increase in work even when all staff is available, or the number of employees to perform such work is reduced for any reason, within normal limits. The causes that occasionally reduce the number of workers include that of vacation.
This was understood, for example, by the High Court of Justice of Galicia in its judgment of November 5, 2020, in which it expressly declared a casual contract to cover temporary demand for production as valid in order to cover vacation.
Nevertheless, in recent rulings on the issue, the Supreme Court has been considering that “companies are fully aware that its staff has vacation and rest periods with the relevant regularity and, therefore, their response to the normal volume of work should contemplate the hours effectively worked. (…) such absences from work take place within the normal performance of an employment contract and form part of the organizational planning required by the employer, without relying on the exceptional situation that casual contracts are intended to resolve” (judgments of October 30, 2019 and November 10, 2020).
On these grounds, the Supreme Court states that neither are casual contracts to cover temporary demand for production suitable to cover worker vacation, only being allowed in the event of circumstances that define this type of contract, amongst which the court includes non-foreseeability. In this way, the Supreme Court requires companies to foresee that they are able to cover their workers’ vacation periods by planning the needs for fixed staff with a normal business volume.
Therefore, in light of this case law, casual contracts to cover temporary demand for production may not be considered suitable to cover staff vacation, even though the contract specifically indicates the worker or workers in this situation and whose absence gives rise to the accumulation of work. For a casual contract to be considered valid in these cases, rather than a reduction in available labor, what should occur are the defining elements of this type of contract, which are: its exceptional, circumstantial and unforeseeable nature, within the company’s normal activity.
This should be particularly taking into account at the present time, when Labor and Social Security inspectors, as well as Labor Courts and Tribunals are closing the net on temporary hiring and claiming that it should only be allowed in exceptional cases.