Friday, July 1

The Government, employers and unions rush to close an agreed labor reform this week

  • The social agents review the final text during the weekend, at the expense of finishing closing the aspects related to subcontracting and ertes

  • The positions are close and the businessmen welcome joining an agreement that, however, is still not secure

Patronal Y unions have spent the weekend watching weapons before the decisive outcome of the labour reform, which has all the ballots to be produced this week. The Government sent a new draft last Friday for the social agents to study it and make a definitive statement over the next few days and within the organizations, agendas are already being cleared. Sources from both the business and central banks point out that the agreement is possible and probable, although they still resist taking it for granted. Although nothing is closed, the spirit of reform is on track in all but two points: the Outsourcing and the new model of ertes. These two issues are the most open and far-reaching and that is where the sources consulted acknowledge that the three-way entente can jump. Several sources familiar with social dialogue suggest that this Monday will be the decisive day on which the final text will be closed on which the parties will have to decide later.

The labor reform will see the light in the next few days, after nine and a half months of negotiations. The delivery has been long and complicated. Employer sources insist on qualifying the final content of the rule as “balanced“While the centrals congratulate themselves on the progress made, but they cannot help but acknowledge that in some aspects the employers have managed to decaffeinate the reform.” We will come out better than we are, but in some points worse than we were before the PP “, points out a union leader.

Several of the master pillars of the reform of Mariano Rajoy Y Fatima Banez (today at CEOE) will remain intact. Especially those referring to layoffs. Neither the processing salaries will be touched, nor will the severance pay for 45 days per year worked for the undefined, nor will the administrative authorization of the eres be recovered. Those points have not been on the table at any time and they have not entered discount time either. With regard to collective bargaining, a business source acknowledges that “there the unions have won.” The explicit nature of the coalition agreement between PSOE and United We Can worked in its favor: the ultraactive indefinite of the agreements and prevalence of the sector over that of the company.

Give and take in temporality

In other matters, the social agents and the Government have stepped on new ground. It is the case of the temporality, where the 2012 reform hardly introduced direct changes and the second vice president, Yolanda Díaz, had from the first moment between eyebrows that had to be reached. The data support this, since Spain is an anomaly -in the bad sense of the term- in the European Union, with one in four employees as temporary employees. And in this field the Numantine defense of the employers’ association has borne fruit, since the content of the first draft was more restrictive than that of the last ones and the intention to establish maximum percentages has fallen, in addition to relaxing causality in some formats. However, this does not mean that the centrals stop defining the changes as the most ambitious in this matter since the 1984 reform.

There the main modification is the disappearance of the work and service contract, which according to SEPE data represents 38% of current hiring in Spain. And the final scheme will be as follows, with three types of temporary contracts available. The first modality will be that of the contract for occasional tasks, of 90 days of maximum duration and capable of covering specific peaks in demand. For example, if a company needs to strengthen itself for the campaign Christmas. There the companies will be able to hire all the eventuals they need, as long as the contract is not repeated. The second modality will be that of the contract for unforeseen causes, which may have a duration of six months or one year, if so agreed by employers and unions by agreement. And contracts cannot be concatenated for more than 18 months during a 24-month period. There the unions prevailed, since a maximum concatenation of 24 months was managed in a period of 30 months. And the third modality will be to cover a baja for maternity, temporary disability or leave of absence; It will last as long as the loss lasts.

In terms of temporality, there are two issues that can still generate a certain struggle, especially from the business bench. The CEOE does not see with good eyes the ‘extra’ of social contributions that Social Security wants to apply to discourage ultrashort contracts. And he also advocates extending those 90 days of contracts for occasional tasks in the agricultural sector. There the unions argue that the discontinuous fixed contract should prevail, but the employers press to get a special discount for the agrarian organizations.

Outsourcing and new jobs

Where it is not clear who will end up giving in is in terms of subcontracting. The last draft states that a subcontractor can choose between two agreements: either the agreement of the company for which it is subcontracted or the agreement of the activity carried out by the subcontractors. Following an example. A subcontractor of Seat could apply the agreement of Seat or the agreement of the sector of the activity that it carries out for Seat. If you provide gardening services, then the gardening agreement. If you provide cleaning services, then cleaning. And if it is a multi-service company that provides different services, the gardeners will have the gardening agreement and the cleaning, cleaning.

That draft does not like in the union bench, because they consider that it improves the current conditions, but not to the level that they intend. Well, although it removes multi-service agreements from the equation, it does not favor specialization. As an example, according to the last draft, a chambermaid would not be governed by the hospitality agreement, but by the cleaning agreement, which is better than a multi-service, but not the hospitality agreement. That is one of the pending fringes.

And the other is that of the new post-covid ertes, baptized by the Government as’RED mechanism‘. The new proposal maintains the two assumptions according to which companies may request cuts with public aid: in the face of a temporary crisis in the entire economy or only for a specific sector, in the face of difficulties inherent to it. In the case of ‘cyclical ertes’, the file may not exceed one year. And in the case of ‘sector ertes’, they may last one year, although with two additional extensions of six months, that is, up to two years. In both modalities, the State will offer 50% bonuses to Social Security contributions to encourage that, as has happened now during the pandemic, companies resort to the file and not to dismissal directly. A percentage of exemptions that unions consider difficult for the public purse in the long term.

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Last meeting this Monday?

The leaders of the business and union organizations are evaluating the details of the reform in detail, with these two matters – subcontracting and ertes – still open enough for there to be changes. This Monday the social dialogue table will meet again in what could be the last formal appointment before the social agents conspire in their respective conclaves to give (or not) the go-ahead to a labor reform that could be approved in the Minister council next December 28th.

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