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Analysis-Spain close to reversal of post-crisis labor reforms By Reuters


© Reuters. Staff arrange a scaffold as a Spanish flag flutters on the Colon sq. in Madrid, Spain, November 2, 2021. REUTERS/Sergio Perez

By Belén Carreo

MADRID (Reuters) – Spain’s left-leaning authorities is near a significant shake-up of landmark pro-business labor reforms put in place after the sovereign debt disaster however which critics say eroded worker rights and stunted wage progress.

The brand new guidelines taking form from months of negotiations with unions and employers would give extra wage bargaining energy to staff and revamp the momentary contracts which are extensively used within the nation’s companies and construction-dominated economic system.

They kind a part of a package deal of reforms Spain should present to the European Fee by the tip of 2021 for the discharge of EU pandemic restoration funds.

A European political supply mentioned Brussels was watching the provisions to make sure they didn’t make Spain’s labor market, whose 14.6% unemployment fee in September was EU’s highest, too inflexible.

The 2012 reform by the centre-right authorities of Mariano Rajoy was imposed by Spain’s EU collectors and the Worldwide Financial Fund within the wake of the debt disaster.

It favored employers within the collective bargaining course of, permitting corporations to pay beneath industry-standard wages – one thing the tourism sector has taken benefit of. It additionally enabled the settlement of in-house wagering and situations offers that Spain’s automobile meeting crops have been fast to undertake.

Reforming the reform was a key situation of socialist Prime Minister Pedro Sanchez’s radical left junior coalition accomplice Unidas Podemos, which joined the federal government final yr.

However the negotiation has generated a few of the most tense exchanges to this point between the social democratic and communist strands of the federal government which respectively management the economic system and labor ministries.

“The (new) reform goals to keep away from firm agreements having primacy in wages setting,” Joaquin Perez Rey, deputy labor minister, instructed Reuters.

At current corporations are in a position to set salaries decrease than these agreed by collective bargaining at sector degree the place commerce unions are robust, the strategy historically utilized in Spain. They’re additionally in a position to change working schedules if there may be an financial justification.

“We wish to get better the steadiness in labor relations that deteriorated below the earlier reform,” Unai Sordo, head of CCOO, Spain’s largest union, instructed Reuters.

However Sordo mentioned that the reform will respect different points of company-centred collective bargaining and the potential of opting-out within the occasion a enterprise is in disaster can be saved.


Rosa Santos, the lead negotiator for Spain’s CEOE employers’ affiliation, instructed Reuters an settlement on the labor reform was nonetheless a great distance off as a result of some key points being mentioned may influence the inner flexibility of corporations.

However she mentioned employers settle for a brand new method for wage setting is required to eradicate “unfair competitors,” including: “collective bargaining can’t be geared toward making wages extra precarious.”

Different measures on the desk are geared toward bolstering job safety and ending the precarity which critics say means tens of millions of individuals in Spain lose their jobs each time there may be an financial downturn.

Spain has the very best share of momentary staff in Europe, which at 20% is double the EU common. Such staff have decrease severance pay and are invariably the primary to be let go within the occasion of cuts.

The federal government desires to abolish the momentary contracts typically misused within the building and companies sectors and create a brand new model that may solely be used as a one-off below very particular circumstances.

Based on the newest authorities proposal, these new contracts could be for so long as three months and canopy peak durations such because the year-end vacation season and the busiest durations of Spain’s extremely seasonal, tourism-dependent and agriculture-heavy economic system.

“We’ve got to make a distinction between seasonal and momentary,” defined Perez Rey.

For seasonal staff the federal government desires to advertise using an present type of everlasting contract that permits staff to gather unemployment advantages throughout inactive months with out leaving their corporations, one thing already extensively utilized in Spain’s Balearic Islands, the place the hospitality {industry} closes for round 5 off -season months.

A second doable provision would create a everlasting mechanism just like the furlough schemes carried out around the globe throughout pandemic lockdowns. The aim could be to pre-empt anticipated ecological or digital transitions inside corporations.

Employers need the scheme to be “versatile and easy”, CEOE’s Santos mentioned. Along with unions, they’ve rejected the federal government’s preliminary proposal.

“We wish a extra versatile mannequin just like the German one,” mentioned union chief Sordo, referring to the “Kurzarbeit” system below which staff are placed on diminished hours in job safety schemes.

Some labor market analysts say the plans are inadequate to treatment Spain’s aversion to completely contracting staff.

“Momentary and everlasting contracts are speaking vessels, in case you tighten one you must make the opposite extra versatile. In any other case corporations lose flexibility to compete in an more and more globalized world,” mentioned Ignacio Conde-Ruiz, Economics Professor at Madrid’s Complutense College.

A supply with information of the matter mentioned the European Fee would extra readily settle for a deal – and launch the 2022 restoration funds – if employers are on board, even when it sacrifices extra market flexibility that it could like.


Abhishek Tiwari
Abhishek Tiwari is the Author & Founder of the He is passionate about Blogging & Digital Marketing.

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