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Huge union protests have met the Spanish government’s attempt to undermine workers' rights, reports Sofia Tipaldou.

Spanish Labour Law ProtestorSpain’s  biggest trade unions - CCOC (Comisiones Obreras, Workers Committees) and UGT (Unión General de Trabajadores, General Workers’ Union) - organised a massive clamor against the labour market reforms that the government is planning on February 19. They did so on a Sunday, without calling a general strike yet, and with the objective of informing the public about the reform as a first step. It turned out to be one of the biggest trades union’ mobilisations in the recent years.

People flooded the streets in 57 cities all over the country. Over half a million in Madrid; 450,000 in Barcelona; 80,000 in Valencia; 70,000 in Zaragoza; 50,000 in Gijon; 50,000 in Sevilla; 25,000 in Castilla La Mancha; 12,000 in Pamplona and 6,000 in Bilbao.

In the country’s capital the main body of the demonstration was so overcrowded that no one could move. The movement 15M, also known as los indignados, also joined the demonstration, holding a banner that was accusing the main trade unions of “selling the workers”. Other incidents against the trade unions took place, e.g. when somebody threw eggs containing yellow color against the unions’ leadership. Nevertheless, the demand to build a general strike was diffused.

The slogan of the demonstration was “No to the labour reform that is unjust for workers, inefficient for the economy, and useless for employment”. It was a response to the statement of prime-minister Mariano Rajoy and Minister of Employment Fatima Bañez that “the reform will be complete, balanced, operative, and useful”.

According to Spanish trade unions, the new reforms are going to increase the number of unemployed up to 6 million, instead of today’s 5.3 million. “They are taking back what our grandfathers struggled for” cried many protestors. The general coordinator of United Left, Cayo Lara, stated that the labour reform is the “most brutal attack on workers’ rights” in Spain’s democratic history and declared that the aim of the protests is to stop this reform and “the PP’s madness”.

On the other side, Spanish prime-minister Mariano Rajoy was affirming that his government introduced this reform responsible for the country’s unemployment. “What shall we say to the youth who do not know what it is to lose a job, because they never had one? And to the third generation, what shall we tell them?” As a response to this, I shall quote the slogan I read on a banner: “Can we pay Rajoy less, and in case he rejects, fire him?”, said Lara.

So what is the labour reform all about?

The labour reform

Spain’s new conservative government, the Popular Party (PP) under the leadership of Mariano Rajoy, presented on February 10, 2012 a labour reform that withdraws many workers’ privileges, in order to make the labour market flexible and ‘cure’ the country’s long unemployment problems.

Spain is the Eurozone’s champion in terms of unemployment, with 23 per cent of the active population and 48 per cent of young people bellow 25 on the dole. Next in the league table is Greece.  With this reform, Spain follows the line that was first imposed on Portugal, and then used to penalized Greece. The results have been disappointing for the countries who introduced the “necessary” neo-liberal reforms. In other words, this series of new measures are seen as a governmental effort to convince the markets that the country can reduce its budget deficit enforce competitiveness, which according to neo-liberal economic theory will in its turn create economic growth and new jobs.

The Spanish labour reform aims to introduce the following basic changes:

  1. Just cause dismissal
    1. In case of just cause dismissal the reform foresees a severance pay reduction from 45 days per working year and with a maximum of 42 waged days to 33 days per working year and with a maximum of 24 waged days for workers with indefinite contracts. This reduction will be for all contracts of indefinite duration, regardless of whether they have been signed before or after the reform. For all those who already have indefinite duration contracts, their severance payment will be calculated as follows: 45 days per working year for the working period prior to the reform and 33 for the period after it.
    2. The definition of just cause dismissal gets amplified to include a persistent drop in incomes or sales for a firm across three trimesters. Additionally – as if this was not enough – the dismissed workers themselves have to prove now that their dismissal was  unjust.
  2. State subsidies for indefinite duration contracts in Small and Medium Enterprises: Small and Medium Enterprises with less than 50 workers (that was 99.1% of Spanish firms in September 2011) will progressively receive a 3,000 Euro grant for the first employee they hire if he or she is less than 30 years old after one year probationary period (instead of six months). If the new employee was unemployed he can still receive 25 percent  of the unemployment benefits he was receiving before getting the job for a year. In this way, for the first time a worker is working and getting subsidized by unemployment benefits at the same time. Furthermore, the enterprise can also get a 50 percent deduction of the quantity of state benefits that the worker would have received during a year from their wage bill.
  3. Bonus for indefinite contracts: Enterprises will get a yearly bonus of 3,600 Euro for offering indefinite duration contracts to young people between 16 and 30 years old and of 4,500 Euro for contracting long-term unemployed workers older than 45 years. The bonus will last three years.
  4. Salary and working conditions: The salary is from now one of the working conditions that the employer can agree on with his employees due to economic, technical, organisational or productivity issues. This change influences the workers that get paid more than the minimum wage in their occupation and, consequently, enables the firms to decrease wages in order to gain competitiveness.
  5. Temporality: From January 2013 the limit for tempory contracts is two years. From that moment on the employer has to offer the worker an indefinite duration contract or mini-jobs of reduced working time and salary.
  6. Collective negations: The reform sets limits to the automatic renovation of collective agreements without the agreement of employees and employers. The former government had already limited collective agreements to 14 months and required an arbitrage after it. Now it will be easier for the firms to introduce salary changes and the abandonment of the agreement. Nevertheless, the economic circumstances under which the firm is freed from following the collective agreements are not specified. If there is no agreement for the abandonment of collective agreements the two sides should ask for an arbitrage that should be resolved within 25 days.
  7. Layoff plan: The new reform eliminates the requirement that the Ministry of Employment should agree a layoff plan, whereas now only judicial authorization is necessary. It also allows that the affected workers can get up to 180 days of unemployed benefits.
  8. Formation: The right of all employees to the 20 paid hours of formation from the entrepreneur is recognized.
  9. Capitalisation of unemployment benefits: The reform raises the capitalisation unemployment benefits from 80% to 100% for young men until the age of 30 and young women until the age of 35 who start a self-employed activity.

Criticism

Madrid protestNo wonder that the new Spanish labour reform immediately received heavy criticism. First, there are serious doubts that making the dismissal of workers cheaper will decrease unemployment in the middle of an economic crisis. What the reform seeks is to make wages cheaper. In this way, and since there is no domestic currency to devalue, the country will try to find its way out of the crisis by cutting the workers’ salaries and rights and social provision.

Second, the reform seems to legalise the employers the right to come to a compromise directly with each employee on such issues as the number of working hours, the duties, and the salary. If the employee does not agree with the conditions the employer imposes, then dismissal can be considered as having just cause.

Third, there is no guarantee that just cause dismissal will not be applied to every case and this raises serious concerns on employers’ immunity. Additionally, the reform is very probably going to have retroactive effects, since it will be applied to all workers, regardless if they have signed their contract before or after the introduction of the labour reform.

From my point of view, the reform - apart from being an economic backlash against workers – is also politically regressive. We should remember that collective bargaining was introduced with the creation of the first trade unions in the nineteenth century and that trade unions are recognised as a fundamental human right from the Universal Declaration of Human Rights (Article 23). Furthermore, according to Canada’s Supreme Court review of whether collective bargaining is a human right or not (2007), the right to bargain “enhances human dignity, liberty and autonomy of workers” as they have the opportunity to influence their work. Collective bargaining is also an experience in self-government that permits workers to achieve a form of workplace democracy and to ensure the rule of law in their workplace.

Consequently, the Spanish labour reform causes not only economic losses for the workers, but foremost historical losses for the whole society, by making it easier for the employee to set his or her economic terms in collective agreements or even having the right to infringe them.

In the end it threatens already established human rights on one hand, and deeply-rooted democratic procedures on the other.

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