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Spain's employment relations system is marked by a mixture of extensive regulation of employment contracts and termination, with a strong role for collective agreements at both industry and company level in setting pay and conditions. Pay structures are complex, with a large number of grades and a plethora of allowances.
Spain has a very high rate of temporary employment, which accounts for around a third of all jobs, in part due to strict rules and cost of dismissal which have deterred open-ended hiring. Official authorisation is required for dismissals. Important labour market reforms, introduced in June 2010, have begun to try and tackle this issue, both by deterring the successive use of temporary contracts and easing severance requirements on indefinite contracts.