The Spanish government plans to reduce the number of standard employment contracts from 41 to five, Labor Minister Fatima Bañez said Thursday.

The current system will be streamlined to five categories - indefinite contract; temporary contract; replacement contract; internship; and training and learning contract, Bañez told Parliament.

The employment system's overhaul is an effort to promote job creation in Spain, where nearly 6 million people are jobless, the labor minister said.

The Employment Law will also be updated to include existing incentives for hiring, Bañez said.

The large number of employment categories and the complex bonus system complicate the labor market, especially for small- and mid-sized companies, the labor minister said.

"It's a problem we are going to solve very soon," Bañez said, adding that the proposal was at an advanced stage.

Incorporating all hiring regulations in one code, unlike the current scattered system of regulations, will make it easier for both workers and employers to understand the rules, Bañez said. EFE