A reform that brings a divided government upside down



The repeal of the labor reform approved by the Government of Mariano Rajoy in 2012 brings the Sánchez Executive upside down. In their government agreement, the PSOE and Podemos agreed to suppress what they considered the most damaging aspects for workers: the ultra-activity of the agreements; the primacy of company agreements over sectorial, or territorial, and the possibility of unhooking for companies. Now the empowered Minister of Labor, Yolanda Diaz, demands that the agreement be fulfilled and even adds other proposals that enrage businessmen, such as prevent companies from having more than 25% temporary employment. One might think that Díaz is right because he is only demanding that it be fulfilled

what was agreed. The problem is that 140,000 million euros of European funds are at stake that depend, in part, on the Government presenting a labor reform that convinces Brussels. And repealing the flexibility that the Rajoy reform introduced does not go, precisely, in the line requested by the EU, which is committed to introducing ‘flexicurity’ in the labor market.

However, apart from the government pact signed by PSOE and Podemos, there are few reasons that justify the repeal of a reform that, according to the experts and the studies carried out, agree, has accelerated the recovery of employment after the devastating financial and real estate crisis that devastated Spain harshly between 2008 and 2013. In fact, many economists point out that if it had been in force at the beginning of the crisis, much less jobs would have been destroyed, because companies would have had in their hands flexibility instruments to reduce your costs without having to resort to layoffs. And it was some of the measures introduced in that reform, such as the abolition of the prior administrative authorization for ERTE, which have facilitated in this crisis a much more agile response to the total or partial closure that the pandemic forced. Why, then, do you want to end a reform that has been positive in terms of employment, productivity and GDP? I can only think of one reason: why loss of union power, which are now pressuring the Government to recover it. But let’s analyze the measures to be repealed:

The end of ultra-activity of the agreements so that they remain in force even if the term for which they were agreed ends. This means that in times of crisis workers have no interest in renewing it because better conditions would be maintained. This is what happened between 2008 and 2011. But not being able to act on wages, companies resorted to closures or layoffs to cut costs. What is happening after its suppression is that the agreements themselves include what happens if their validity ends without there being a new one.

The primacy of the company agreement on the sectoral or provincial ones. Contrary to what you might think, these company agreements have not been triggered. And perhaps the trickiest thing and the thing that can do the most damage to companies is the possibility of picking up in case they have problems. And to this is now added the requirement not to have more than 15% temporality. This means that companies with less than 7 employees could only hire fixed. They will tell us that the obligation will be done only for the big ones. But in the end, all we do is discourage companies from gaining size, which is exactly the opposite of what Spain needs. In other words, we are going to make bread like cakes.

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