This article provides a complete overview of the 2012 spanish labor reform. In addition, the author explains the reasons for enacting this law, in particular, the financial framework, the high unemployment rates, the low levels of professional qualification, the persistence in our labor market of high rates of temporary employment and the unique pattern of productivity. This paper reflects on this labor market reform and how it entails a true cultural change in the understanding of labor relations for all protagonists (judges, unions, businesses). Moreover, the article examines the measures of internal and external flexibility and the new kind of contract called employment contract of indefinite duration in support of entrepreneurs which aspires to reduce the labor market segmentation. The main argument of the author is that the 2012 reform produces a new model of labor relations characterized by flexibility and decentralization.