Labor reform: Agreement between the Government, CEOE and unions to repeal part of the legacy of the PP

The CEOE and unions support labour reform and the coalition government has managed this Thursday to tie an agreement to repeal part of the legacy of the PP, in force since 2012. The bosses’ leadership has said ‘yes’ first thing in the morning and the confederal committees have replied to it. CCOO and UGT, who have spoken at the edge of noon. Fumata blanca after nine and a half months of negotiations and a last week of marathon (and tense) meetings that have led to a final document of 47 pages, to which EL PERIÓDICO has had access, and that give shape to one of the star reforms of the legislature. “It is a historic day for workers in Spain”, declared the Second Vice President and Minister of Labor, Yolanda Diaz.

The coalition finally manages to overcome the resistance of the CEOE and add it to the agreement with less restrictive changes in temporality than those initially proposed, such as with the withdrawal of the maximum percentages of eventuals according to the size of the company, as advanced by EL PERIÓDICO. One of the bones of the negotiations also falls from the reform: the possible fraud that are dismissed by the companies to avoid making them permanent will not be considered as null, as raised. However, where the Government has not yielded is in increasing fines to hunt down fraud. The maximums go up from 7,500 euros to 10,000 euros and are now applied per worker and not per company (previously, if the inspectors detected 20 workers in fraud, they applied a single sanction and now they will apply the equivalent amount to employees in fraud).

It has not been easy for anyone to say ‘yes’ and the president of the CEOE, Antonio Garamendi, has had to deal with internal friction despite the transfers obtained. Foment del Treball, the Madrid employers (CEIM), the agrarian (ASAJA) and the car (ANFAC) have abstained from a vote that, however, has added a majority of ‘yes’ this Thursday early in the morning in the executive committee. And this despite the fact that the Executive has agreed to new ambitious cuts in public spending and has not reinforced the regional agreements over the state ones, as requested by the employers.

The Executive ties the appropriate balances to retain some unions that regain power in the Collective negotiation and they get higher penalties for companies that abuse the eventuality. Although the centrals have seen how in the last bars of the negotiation the Executive has yielded a field that they would have liked to keep.

A “roller coaster” of negotiations

“This has been a roller coaster. At times it seemed that the agreement was imminent and soon it seemed that it was breaking, “says a source familiar with the conversations. The document agreed upon by the parties must now pass the final verdict of all the leaders of social organizations, which in the morning of this Thursday they are summoned to give the final ‘ok’. To then give way to its approval in a next Council of Ministers, being the December 28th the date that the parties have noted in red in the agendas.

The negotiations opened by the second vice president, Yolanda Diaz, and closed by a multi-ministerial team of negotiators have been elucidated in “discount time”, as defined by Díaz herself. The delivery has been long, tense and not without complications. Along the way there have been internal crises in the coalition, with PSOE Y United we can crossing sabers in public and private for the leadership (and revenue) of the negotiations. Outbursts of an employer’s association that came to label the reform as “ideological”, “interventionist” and with elements “more typical of contexts fortunately already overcome throughout Europe.” And some unions pressing to regain positions seized without consultation by the PP almost 10 years ago.

There will be no repeal of the labor reform of Mariano Rajoy, at least not in the strict sense. What is pre-agreed between the government, employers and unions is something else that touches on some of the elements of that reform, leaves others intact and introduces new features that it did not address. The main victory that the power plants will be able to show after a decade insisting is the recovery of ultra-activity and the prevalence of the sectoral agreement over that of the company. However, an element that they claimed is not being touched at the moment: the dismissal. The Executive has not wanted to recover either the 45-day severance payments that were paid before 2012, or the processing salaries, or to regain powers in terms of authorization of the companies.

Limit to temporality

The maxim of any negotiation is that all parties must end up moderately dissatisfied with the result and this has not been an exception. “We will come out better than we are, but in some points worse than we were before the PP,” says a union leader. The labor reform of the coalition government reaches directly to temporary contracts to tackle the greater rotation existing in a member state of the European Union. This has been one of the Gordian knots of the negotiations, both within the Government and with the social agents, as EL PERIÓDICO already explained at the end of October.

The main novelty is that it eliminates the work and service contract, which until now moved four out of every 10 temporary contracts in Spain. And replaces it with a maximum contract 90 days for foreseeable slaughter peaks, and one between six months and a year for unpredictable slaughter peaks. The contract follows to cover absences, disabilities and leaves of absence, in a scheme that seeks to make the indefinite contract more ordinary than it currently is.

Another novelty is the figure of the new ertes, which collects the experience during the pandemic and enables mechanisms in the event of suspension due to force majeure, in the face of generalized cyclical crises and in the face of localized crises in one sector. The ‘RED Mechanism’ will provide aid to companies that do not fire and opt for suspension, as well as incentives for those companies that hire workers in other companies in crisis.

More guarantees in outsourcing

The agreement in the social dialogue also touches the Outsourcing, a way that many companies use more to save wages than to specialize. The last draft proposed 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.

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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.

Something that the CEOE has scored has been to avoid giving more power to the regional agreements on the state ones. Here the Government intended to clarify the current drafting of the Workers’ Statute, which has judicialized some conflicts, but finally and in order to reach an agreement, it has parked this issue before the employer’s demands.