What is an interim contract and what to keep in mind

10 of March, 2025

The interim contract is used by companies that need a substitute while one of their employees is absent.

Since the interim contract can be used in many different situations and has a number of specific features, we want to explain its definition so that you know all the conditions it contains and how to act accordingly.

What is an interim contract

The interim contract is a type of temporary employment that has a duration between the periods of work time established in the general law and/or in collective agreements. It is governed by Royal Decree 2720/1998, of 18th December, which develops article 15 of the Workers’ Statute in matters of fixed-term contracts.

The interim contract can be celebrated for both to temporarily cover a vacancy and to replace another worker with the right to reserve the position.

The interim worker replaces another, but does not have any special rights in the employment contract. A substitution contract is a business relationship between the employer and a worker.

The person who signs a substitution contract has the right to replace another temporary worker until this one is reinstated or definitively fired. It also means that the employee’s working hours (and their salary) may vary with respect to their permanent colleague.

How the new Labor Reform affects you

The first thing to know is that this contract has disappeared after the approval and entry into force of the new Labor Reform.

Is there an alternative? Indeed: the new regulation contemplates a fixed-term contract for the replacement of a worker with the right to reserve a job position.

However, it must be specified that the replaced person and the reason for the substitution must be identified. In addition, this model can also be used to “complete the reduced working day for a legally or conventionally established reason”. In addition to covering temporary positions of three months and (with agreement) to be covered in indefinite contracts”.

Temporary substitutions due to disability leave and vacations are carried out with contracts for production circumstances.

One of the main differences is that for sick leave this must be specified in the contract. While vacations belong to the company’s normal activity and therefore it is not necessary.

If the worker, when ending his contract and before his substitute is reinstated, has no right to receive any kind of compensation from the company due to other uses or practices, as specified in article 49.1, paragraph “c”.

Particularities of substitution contracts

Interim contracts in the Administration are very common. The duration of the contracts will coincide with that of these processes in accordance with the provisions of their specific regulations.

The substitution contract of a self-employed worker or partner worker will also be governed by the provisions for the interim contract.

What are the advantages of an interim contract?

The main advantages of the interim contract for companies are:

The flexibility it offers to both the company and the worker, its simplicity, and its profitability.
There are no Social Security registration or health coverage enrollment costs.
There is no need to submit a registration application as in the case of an indefinite duration contract and there is no need for contribution.

The interim contract is a temporary employment contract that offers more flexibility for both parties. For example, if employees are sick leave or maternity leave, the company can use the interim contract to cover these positions.

However, not all are benefits. The first disadvantage is that there is less protection for the worker because interim contracts are not entitled to compensation in the event of dismissal.

Additionally, keep in mind that these working conditions do not allow the transfer of the rights acquired during a temporary period.

They cannot be considered as part of the permanent staff or as a reference for subsequent labor relations.

Another disadvantage is that employers are not obliged to provide accident at work and illness insurance.

How many months can an interim contract last?

The worker Replacement contract is a private agreement that the company signs with a worker to temporarily replace him when he is absent for sickness or maternity leave.

The duration and the cause of the worker’s absence will be taken into account, which could range from 2 months to 10 years and more, as long as the cause for the job position reservation is maintained.

The process of concatenating temporary work contracts is limited to continuous work contracts and temporary contracts.

From a replacement contract to a permanent one

The employer can turn the interim contract into a permanent one under these circumstances: if the replaced worker returns, or 3 months pass and the candidate continues to provide services in the company.

There are certain cases in which the interim contract is not considered indefinite, so it is a short-term contract.

An example of this is when the worker’s salary is not enough to guarantee his livelihood.

Another example is when there are no clauses in the contract that describe the conditions that can lead to its termination.

Termination of the replacement contract

The termination of the interim contract occurs when…

… the worker returns to his fixed job position
… if the legally or conventionally established deadline for return expires
… the moment the cause that gave rise to the reservation of the job position disappears. As long as the definitive substitute has not been produced in the following three months.

What happens if the worker, instead of returning to work, requests a leave of absence without job reservation? In this case, as the Supreme Court Sentence of 9th December 2020 affirms, the labor relationship should be terminated since the job is not reserved.

In general, labor legislation obliges the employer to pay compensation for the work performed by employees during the period in which they want to terminate their contract.

Did you find this type of temporary hiring interesting for your company? We have more information about the types of contracts you can opt for on our blog. And our employee management software simplifies the processing of hiring and tasks associated with payroll.

Professional with over 20 years of extensive experience in various areas of Human Resources (Recruitment, Training, Occupational Risk Prevention, and Personnel Management). Experience in the Management Department: Broad understanding of the company and HR.

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cristinamartin

HR Content Specialist