Months without a contract: do you lose your length of service?
For years, many companies had understood that, if a sufficiently long period of time elapsed between two contracts, length of service started again.
The recent Judgment of the Supreme Court 330/2026, of 27 March, once again dismantles that automatic logic and requires each employment history to be analysed as a whole. The ruling recalls that length of service may be backdated to the first temporary contract, even when there have been interruptions of a certain duration, if, from an overall examination of the employment relationship, the essential unity of the relationship is not considered to have been broken.
This ruling is especially relevant for companies that resort to temporary hiring, seasonal reinforcements and periodic campaigns, as it has significant financial consequences. Length of service directly affects the calculation of severance pay, salary supplements and professional promotions, among other matters.
It also has an impact on corporate transactions, restructurings and due diligence processes, in which the correct identification of length of service may substantially modify the financial contingencies.
Length of service and the doctrine of the essential unity of the relationship
The conflict arises when a person has worked for the same company under several contracts separated by periods without provision of services and claims that their length of service be calculated from the first hiring.
In this situation, what is relevant is no longer only how much time has passed between one hiring and another, but whether, analysing the employment relationship as a whole, substantial continuity can be observed. Consequently, the mere passage of several months between contracts does not necessarily imply that length of service disappears.
This is what case law calls the doctrine of the essential unity of the relationship. Its purpose is to prevent a formal succession of contracts or interruptions from concealing a continuous employment relationship.
However, this does not mean that all successive hiring must automatically be considered a single relationship. Each case requires an assessment of all its circumstances.
The specific case resolved by the Supreme Court is especially illustrative. The worker had provided services for the same company under five temporary contracts since 1988, until subsequently becoming a permanent worker in 1995.
Between the contracts there were interruptions of 36 days, others of more than three months and a final one of approximately nine months. Even so, the Supreme Court recognises length of service from the first temporary contract.
Does a nine-month interruption always maintain length of service?
No. The Supreme Court does not establish a new time limit, nor does it state that nine months are irrelevant. Nor does it set a time threshold applicable to all cases; rather, it rejects the existence of an automatic rule.
In the case analysed, that interruption was compared with the total duration of the relationship examined. Specifically, the 274 days without a contract represented only 2.63% of a period of more than 10,000 days, so the pause was not considered sufficiently significant to break continuity.
Nor should that percentage be interpreted as a new mathematical threshold since, at least for the time being, there is no figure from which length of service is preserved or disappears. Again, each case must be analysed individually.
Factors for determining whether length of service is preserved
Among other elements, it will be necessary to assess:
- The total duration of the employment relationship.
- The time actually worked.
- The number and duration of the interruptions.
- Whether the duties performed were the same.
- The reason for each hiring.
- The provisions of the applicable collective agreement.
- The possible existence of fraud in hiring.
- Any other circumstance relevant to determining whether the continuity of the relationship is maintained.
When there is fraud in temporary hiring, the interruption must be of even greater significance to break the relationship. Judicial doctrine seeks to prevent the company from obtaining an advantage derived from an irregular use of temporary contracts.
Why length of service is relevant for companies
The recognition of a length of service greater than that reflected on the payslip is not merely an administrative matter. It can:
- Increase severance pay.
- Trigger supplements linked to years of service.
- Affect promotions or preferential rights.
- Generate salary arrears.
- Alter the calculations included in provisions.
- Modify the valuation of employment contingencies.
This risk is especially visible in sectors with recurring hiring needs, such as hospitality, tourism, retail and logistics, as well as in those with seasonal activities
It may also affect companies involved in acquisition, merger or reorganisation processes, in which an incorrectly calculated length of service may become an unexpected employment liability.
What companies must review to calculate length of service
The company’s response can no longer be limited to checking the date shown on the payslip. The most advisable course is to:
- Reconstruct the complete contractual chain.
- Compare it with the registrations and deregistrations with Social Security.
- Identify the duties performed.
- Verify the reason for each contract.
- Analyse whether the interruptions reflected an actual break or were merely formal.
Likewise, as the Supreme Court itself did, it is also advisable to calculate the total days of the relationship and the percentage that the interruptions represent over the overall duration of the relationship.
Length of service in due diligence processes
In sale and purchase, investment or refinancing processes, this review should be incorporated into employment due diligence, since an undervalued length of service may become a hidden liability, especially when it affects large groups or workers with high salaries.
Therefore, it would be advisable to simulate the financial impact of the length of service that a court could come to recognise.
Conclusions on length of service between contracts
In summary, letting several months pass between contracts does not guarantee that length of service returns to zero.
The best defence for companies does not consist of relying on a particular period, but of correctly documenting the reasons for hiring, auditing previous employment histories and anticipating their financial impact before the matter reaches the courts.
FAQ on length of service
Is length of service lost when a contract ends?
Not necessarily. The termination of a contract and the subsequent signing of another do not automatically imply that length of service starts again. It must be analysed whether, in view of the professional history as a whole, the essential unity of the relationship is maintained.
How much time must pass between contracts for length of service to be lost?
There is no fixed period applicable to all cases. The Supreme Court refuses to establish an automatic rule based exclusively on the time elapsed between contracts. The duration of the interruption must be assessed together with the rest of the circumstances of the employment relationship.
Does a nine-month interruption break length of service?
Not always. In the case analysed by the Supreme Court, an interruption of approximately nine months was not sufficient to break the continuity of the relationship. However, this does not mean that any pause of that duration must be considered irrelevant.
What is the doctrine of the essential unity of the relationship?
It is a case-law doctrine that allows several successive contracts to be considered part of a single employment relationship when there is substantial continuity between them. Its purpose is to prevent a formal succession of contracts or interruptions from concealing a continuous employment relationship.
What factors are taken into account to calculate length of service?
Among other elements, the following are assessed: the total duration of the relationship, the time actually worked, the number and duration of the interruptions, the duties performed, the reason for each hiring, the applicable collective agreement and the possible existence of fraud in temporary hiring.
Does the percentage represented by the interruptions determine length of service?
No. The percentage that the periods without a contract represent over the total duration of the relationship may be a relevant element, but it does not constitute a mathematical threshold. It must be analysed together with the rest of the circumstances of the case.
What happens if there was fraud in temporary hiring?
When there is fraud in hiring, the interruption must be of especially significant scale to break the continuity of the relationship. Case law seeks to prevent the company from obtaining an advantage derived from the irregular use of temporary contracts.
How does length of service affect severance pay?
A length of service greater than that recognised by the company can increase severance pay, since it is calculated taking into account, among other elements, the time of provision of services.
Can an incorrect length of service generate other financial consequences?
Yes. It can also affect salary supplements, professional promotions, preferential rights, arrears, accounting provisions and other employment contingencies.
Which sectors are most exposed to this risk?
The risk is especially relevant in sectors with temporary or recurring hiring, such as hospitality, tourism, retail, logistics and seasonal activities.
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