Seasonal Workers: Fiasco of Measures for Employment of Seasonal Workers on Permanent Contracts

As the end of the tourist, construction, and agricultural work seasons approaches, employers engaged in seasonal activities are faced with the question of how to maintain a more permanent relationship with seasonal workers who have worked for them as seasonal employees and whom they wish to re-engage next year. The Labor Law recognizes three models of employment contracts for hiring workers during the season: fixed-term contracts for the duration of the season, contracts for permanent seasonal work for a fixed term, and, as a new feature from 2023, contracts for permanent seasonal work for an indefinite period.

What is Possible

Entering into a fixed-term employment contract for the duration of the season is considered a justified reason for employing workers on a fixed-term basis. The duration of such a contract is limited to nine months, and there are no restrictions on the duration of consecutive fixed-term contracts or the number of consecutive contracts with the same worker (maximum three years, maximum three consecutive contracts). Seasonal employment can be full-time or part-time, depending on the employer’s needs and the worker’s interests. Upon the expiration of the fixed-term contract, the worker’s employment relationship ceases, along with their labor and social rights arising from the employment relationship.

The mutual connection is much stronger if the employer hires the worker as a permanent seasonal employee. Until the end of 2022, labor legislation only recognized fixed-term employment for permanent seasonal work, and from January 1, 2023, this institute was expanded to include the possibility of hiring a permanent seasonal worker on an indefinite basis. This novelty should reduce the difficulties for employers in finding workers each year before the start of the season and provide workers with a greater degree of economic and social security. However, changes in labor legislation have not been synchronized with the support from the Employment Service, so it is still more favorable for both workers and employers to enter into contracts for permanent seasonal workers on a fixed-term basis. Here’s why.

When it is ‘fixed’

A contract with a permanent seasonal worker for a fixed term is essentially a fixed-term contract, with the addition that the contracting parties preemptively assume the intention to conclude a new employment contract for the next season, and during the period between two seasons, the employer is obliged to pay contributions for extended pension insurance for the worker. While the employment relationship lasts, the worker enjoys all rights from the employment relationship, and after the termination of the employment relationship, the employer deregisters them from the insurance system as a worker and registers a new basis for insurance – extended pension insurance. For the extended pension insurance of a permanent seasonal worker, the employer pays a monthly contribution at a rate of 20 percent on the lowest base, which for 2024 amounts to 592.80 euros, resulting in a monthly expense of 118.56 euros. The worker accrues pensionable service, and the right to free health insurance can be obtained if they register with the HZZO within thirty days.

The advantage for both the worker and the employer is the financial assistance from the Employment Service, which is granted only for permanent seasonal workers employed on a fixed-term basis: to the employer for paying contributions for extended pension insurance, and to the worker as financial assistance. The employer’s support can amount to 100 percent of the costs for the first three months of the worker’s extended pension insurance and 50 percent of the costs for the remaining period, but for no longer than another three months. The measures of the Employment Service prescribe restrictions on the number of workers for whom the employer can obtain such support. A seasonal worker registered for extended insurance can receive financial assistance for up to six months, provided they have continuously worked for at least six months with the same employer and have committed to work for at least one more season with the same employer.

Neither Salaries nor Support

Employers and workers who are permanent seasonal employees on indefinite contracts are in a less favorable situation. A permanent seasonal worker employed on an indefinite basis can agree with the employer that their employment relationship will be suspended between two seasons, and then the employer deregisters them from insurance, allowing the worker to be employed by another employer during that period. The other option is for the permanent seasonal worker to agree with the employer not to be deregistered from insurance, but then the employer pays all contributions on the lowest base during the period between two seasons, resulting in a monthly cost of 216.37 euros, more than when only paying pension contributions. The employer is not entitled to state support for paying contributions.

Between two seasons, the worker has no right to a salary, and since they are registered based on the employment relationship during that period, they cannot obtain assistance from the Employment Service either. It follows that permanent seasonal workers employed on indefinite contracts are more expensive for employers if they pay contributions during the period between two seasons, and the worker is in a less favorable position than if they had a contract for a permanent seasonal worker on a fixed-term basis. It is unfortunate that the desirable measure of employing permanent seasonal workers on indefinite contracts has not been adequately supported in the regulations of social legislation and measures of the Employment Service.