28/10/2013
The labour market reforms in Spain
Last week, I was invited by the Research Group in Labour Law of Pr. M. Rigaux in the University of Antwerp, to do a Lecture for the students of Law and Union reprsentatives about "The Influence of European on Spanish social law: The labour market reforms in Spain". The aim of my participation in this act was to explain the labour reforms carried out in Spain, mainly since the 2008 economic crash, and the subsequent letter sent by the European Central Bank to the Spanish Government (a letter whose contents are still unknown),which have led to an unprecedented cut in public spending and the beginning of far-reaching labour market reforms.
It's a pleasure for me to write in my bloc the main conclusions on what the labour reforms have meant. In this sense, the labour reforms promoted by the Spanish Government led by the Conservative Popular Party have had the following main results:
1. A power imbalance in labour relations in favour of the employer. The employer has gained great power in the shaping of working conditions, both as regards to making changes in working conditions (distribution of working hours and wage reduction),and regarding individual and collective dismissals. In fact, the labour market reforms have meant a decrease in workers’ rights, especially in large companies.
Thus, the most visible aspect of the labour reforms has been the increase in dismissals for business reasons. The employer has opted for this form of action as opposed to changing working conditions, introduced precisely to avoid these dismissals.
Moreover, although the costs of compensation for dismissal have been reduced, the labour market continues with its chronic illness of temporary and fixed-term contracts to recruit workers.
2. An increase in situations of irregular or atypical employment, which is also related to the informal economy. Added to the increase in workers in the informal sector are irregular situations stemming from the lack of recognition of labour rights; for example, part-time workers who work more hours (informally) than those stipulated in their contracts, or workers who are given (illegal) orders from the company to change their status from paid workers to self-employed if they wish to continue working for the company.
3. Loss of union bargaining power in relation to working conditions. As a result, the Government has promoted collective bargaining by company where the influence of the unions is weaker, instead of by sector.
4. Loss of power of the Public Administration to mediate in resolving labour conflicts, and an increase in the importance of the Labour Courts in this area. In fact, the Labour Courts often act as a counterweight to the application of labour law without taking into consideration its formal or procedural aspects, and consequently, its role of providing the worker with guarantees, especially in relation to dismissals.
5. The labour reforms have been a disaster in targeting job creation. Unemployment continues to rise, although for the Government more slowly than before the reforms. The Government has actually changed its initial proposal and now says that the labour reforms were to “lay the foundations” for future employment creation “when the economic situation improves”.
6. Loss of an important number of Public Administration workers. It has been estimated that 9.4% of public sector workers have lost their jobs in the Public Administration (about four hundred thousand people).
7. To sum up, the labour market reforms are not resolving the unemployment situation. In fact, the devaluation of working conditions (salaries) is not leading to economic growth, but instead, poverty and social inequality are increasing in Spain.
Furthermore, the Popular Party’s form of government and way of legislating (impulsively and without the appropriate parliamentary filters) is taking its toll on Spanish democracy.
In Spain, the Spanish Constitution and the establishment of the State of Spain as a Welfare State has been called into question. From a legal viewpoint, we will have to wait to see what the opinion of the Constitutional Court is.
1. A power imbalance in labour relations in favour of the employer. The employer has gained great power in the shaping of working conditions, both as regards to making changes in working conditions (distribution of working hours and wage reduction),and regarding individual and collective dismissals. In fact, the labour market reforms have meant a decrease in workers’ rights, especially in large companies.
Thus, the most visible aspect of the labour reforms has been the increase in dismissals for business reasons. The employer has opted for this form of action as opposed to changing working conditions, introduced precisely to avoid these dismissals.
Moreover, although the costs of compensation for dismissal have been reduced, the labour market continues with its chronic illness of temporary and fixed-term contracts to recruit workers.
2. An increase in situations of irregular or atypical employment, which is also related to the informal economy. Added to the increase in workers in the informal sector are irregular situations stemming from the lack of recognition of labour rights; for example, part-time workers who work more hours (informally) than those stipulated in their contracts, or workers who are given (illegal) orders from the company to change their status from paid workers to self-employed if they wish to continue working for the company.
3. Loss of union bargaining power in relation to working conditions. As a result, the Government has promoted collective bargaining by company where the influence of the unions is weaker, instead of by sector.
4. Loss of power of the Public Administration to mediate in resolving labour conflicts, and an increase in the importance of the Labour Courts in this area. In fact, the Labour Courts often act as a counterweight to the application of labour law without taking into consideration its formal or procedural aspects, and consequently, its role of providing the worker with guarantees, especially in relation to dismissals.
5. The labour reforms have been a disaster in targeting job creation. Unemployment continues to rise, although for the Government more slowly than before the reforms. The Government has actually changed its initial proposal and now says that the labour reforms were to “lay the foundations” for future employment creation “when the economic situation improves”.
6. Loss of an important number of Public Administration workers. It has been estimated that 9.4% of public sector workers have lost their jobs in the Public Administration (about four hundred thousand people).
7. To sum up, the labour market reforms are not resolving the unemployment situation. In fact, the devaluation of working conditions (salaries) is not leading to economic growth, but instead, poverty and social inequality are increasing in Spain.
Furthermore, the Popular Party’s form of government and way of legislating (impulsively and without the appropriate parliamentary filters) is taking its toll on Spanish democracy.
In Spain, the Spanish Constitution and the establishment of the State of Spain as a Welfare State has been called into question. From a legal viewpoint, we will have to wait to see what the opinion of the Constitutional Court is.
