Do you mean, can a spanish citizen work in the UK and have a contract of employment? If so, yes - the spanish are part of the EU and have rights to work.
If you mean, can a spanish citizen create a contract of employment for someone else, then this is slightly different. If one is a spanish citizen in the UK providing business services and is looking to employ someone to work for them, they would need to register themselves as a company with companys house - this costs about �5, I think. After that, it would be the company that creates the contract of employment, not the individual. So it makes no difference what nationality the individual who owns the company is (providing they have rights to work in the UK).