Why does the reform cause the labor market less flexible today?

The new labor reform adopted yesterday, the Council of Ministers must have been published today in the BOE to enter into force but the Government has delayed at

Why does the reform cause the labor market less flexible today?

The new labor reform adopted yesterday, the Council of Ministers must have been published today in the BOE to enter into force but the Government has delayed at the last moment until tomorrow. In the long process of negotiating that has lived, the text has varied from the total repeal, only the so-called more harmful aspects to be in a modernization that, however, introduces more rigidity for hiring in the labor market with worse figures of Unemployment of the EU, next to Greece.

Nominally, the new framework tries to solve the high unemployment that Spain generates structurally and, with this problem, temporality and precariousness in contracts. Also rebalance the negotiation capacity within companies, returning the unions part of the faculties they lost in 2012 and that for these organizations it was a capital issue. Expert offices in labor law indicate that none of the introduced changes favors flexibility, which is what companies demand to make hiring more intense. Garrigues or Sagardo, among others, nuance that, given the circumstances, it is about it is moderate and prudent restrictions.

The main point is temporality, in which hiring in Spain is an extraordinary case that Brussels has called to correct. The timeliness rate of the Spanish labor market is 11.1 points higher than the European average and one out of four contracts that were signed in November had a duration of less than a week. It is striking that the main engine of temporality in Spain is the public sector, specifically autonomic in the education and health sectors. But there is also a return back in the ultraactivity of the agreements, for example.

It is recorded in causality and deadlines, with strong sanctions of 10,000 euros for each worker instead of by company for companies that leave the standard. The temporary contract due to production circumstances for unpredictable situations or by temporary imbalance of employment will not exceed six months, expandable to another six. For predictable situations as a commercial campaign, it can be used for a total of 90 days, never continuously. Within these assumptions, the temporary contracts of less than 30 days will have an additional contribution by the employer once they are liquidated that it will be up to three times the current one.

Workers who exceed established deadlines will be converted into indefinite, as well as those who accumulate 18 months of work within 24 months, in the same or different job with the same company or group of companies if they accumulate two or more contracts directly or through its making of companies an ETT (temporary workplace company).

The modality par excellence of temporary contracting and one of the most recurrent in areas such as the construction will disappear. A maximum of six months will be valid from the entry into force of labor reform. In the construction sector, the ordinary contract will also be the indefinite, but once the work is finished, the company must offer a proposal to recollection to the worker, who in case of being rejected or not being able to take place will lead to the extinction of the contract with a Compensation of 7% calculated on salary concepts of the Convention.

It is currently in the environment of 25%. It is supposed that the first cut should reach the hand of the administration, which is not governed by this norm but negotiates with the unions to stop being a focus of the problem. There will also be a statistical effect, as fixed-discontinuous contracts (for work of seasonal nature or linked to seasonal productive activities will also be indefinite), which today are temporary. Beyond, employers consider that a scheme based on sanctions instead of incentives is always less effective and can take some contracting on the black market.

Although there are discordant voices, in general, entrepreneurs have seen the threat of a labor counting disappear or, as a lawyer points out, "to move from death to a constipation." The terms in which the text has been approved Moderate the initial work intention and the demands of the unions, although there is some disconformity and the parliamentary process could bring surprises.

Updated Date: 07 January 2022, 04:03

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