Fraudulent use of apprenticeship contracts condemned

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Following an accusation by the CC.OO trade union, the Labour Inspectorate has recently indicted an important savings bank, Caixa de Catalunya, for fraudulent use of the apprenticeship contract. The indictment states that the apprenticeship contract was used improperly and claims recompense for social security contributions that are due. The Caixa has announced that it will lodge an appeal.

Following an accusation by the CC.OO trade union confederation, the Labour Inspectorate has recently indicted an important savings bank, Caixa de Catalunya, for fraudulent use of the apprenticeship contract.

The apprenticeship contract is a temporary contract for training purposes that was introduced by the 1994 labour reform and abolished by the 1997 labour reform (ES9706211F): it is a contract accompanied by great incentives for employers (minimum social security contributions, very low pay) and aimed at training young people with few skills. The regulation of this contract was severely criticised by the unions, because

• firstly, the level of social protection was far lower than in other contracts and the training was regulated in such loose terms that in practice it involved no type of obligation on the company; and

• secondly, the social group at which it was aimed was defined in ambiguous terms - young people between 16 and 25 years of age who did not have the specific qualifications to be contracted into work-study programmes. In principle, the work-study contract required an educational level of vocational training or higher, but it was not clear whether a young person at this level could be contracted as an apprentice if his or her qualification was not related to the job in question.

This is the origin of the problem in the case of Caixa de Catalunya. Last year this firm contracted 551 people under apprenticeship contracts. Of these, 58 were university graduates, 188 were studying in the second cycle of higher university degrees, and most of the rest were studying the University Orientation Course (COU). This situation led to the accusation by CC.OO, as it considers the use of the apprenticeship contract for university graduates to be illegal. This accusation also included other irregularities in the apprenticeship contracts, such as the absence of a tutor, or the performance of tasks that correspond to a normal employment position and not to that of an apprentice.

The indictment by the Labour Inspectorate confirmed these irregularities, stating that all the apprenticeship contracts were fraudulent. It is therefore claiming from the Caixa the difference between the social security contributions that were paid and those that would have been due using other types of contract. The Caixa has announced that it will appeal against this indictment: it counters that the apprenticeship contracts were legal since the contracted persons did not have training adapted to the job they were to perform, and it has denied the remaining irregularities.

The consequences of this case for the workers contracted as apprentices are not clear. If after the appeal the fraud is confirmed, the apprentices will have to be given permanent contracts, but these procedures can take a long time. However, last year the Caixa agreed with the unions to convert at least 85% of the apprenticeship contracts into permanent contracts after a test at the end of the contract. After hearing the indictment, the unions intend to negotiate with the company for the conversion of 100% of the contracts into permanent ones.

This is not the first case of presumed fraudulent use of this type of contract, and in the future there may be more cases. Under the 1997 labour reform, the apprenticeship contract was replaced by the training contract. This new type of contract is regulated in a more specific manner and offers greater security to the worker, but it will not completely eradicate the problems.