New employment laws in Spain

The Spanish government now looks certain to attempt to reform Spain’s employment laws. Following four months of official negotiations with business groups and trade unions – and after two years of unofficial talks – the outcome looks even more complicated than ever. The government is now preparing the final draft on its proposed reforms. It is believed that the reforms will propose making employees redundant much cheaper for businesses by reducing the number of day’s compensation to 33 days per year of work in exchange for making temporary contracts more difficult for employers who have used this type of contract as a way of making their own workforces more flexible.

Today representatives of the government will be holding meetings with business groups and trade unions in the hope of reaching an agreement before time runs out although many people doubt whether the outcome will be successful.

Reforms to employment laws have become a priority for the government after pressure from international organizations and the markets for the government to take action to show that it is serious when it comes to structural reforms.

The government now sees this issue as a priority and over the next few weeks will try to put together a law aimed at making the labour market more flexible.

Given the pressure over the last month for European countries, including Spain, to make structural changes and cut spending it looks more and more likely that business groups will get their own way over several issues. On the other hand trade unions will almost certainly oppose the reforms which together with the recently announced austerity measures mean that relations between the government and trade unions are at an all time low. A general strike has already been called for later this month in response to government cuts.

Despite making it cheaper for employers to get rid of workers the government also wants to try and protect workers by making it harder for employers to use temporary contracts.

The Ministry of Work has suggested fixing a maximum length of time for construction workers to be employed temporarily (now it is unlimited) and by getting rid of temporary contracts for seasonal work.

One of the most difficult issues is getting business groups and trade unions to agree on the causes of making employees redundant. Business groups favour the recognition of the right of employers to make workers redundant for economic reasons together with reducing compensation to 20 days per year of employment. However, sources close to the negotiations have indicated that if business groups are appeased in this way then the government will also make a gesture to trade unions by making it more difficult for employers to sack employees without going through a judicial process.

The decree governing employment laws will be finalised in two weeks time before it goes before parliament.

It is expected that the final decree will include several clauses over which all parties are likely to agree: the training programme for the young, the German model for reducing the working day in order to avoid redundancies when companies are in crisis, and the restructuring of funding aimed at helping certain groups to enter the workforce.