Monday, January 17

How the changes in the new labor reform affect workers and companies

End to companies that compete with downward agreements in their sectors to obtain advantages thanks to devaluing wages. Goodbye to the employer’s maneuver that makes the wages and rights achieved by workers in the past disappear simply by dropping a collective agreement. Farewell to the work and service contract for which millions of workers continually chain fictitious temporary contracts throughout the country. These are some of the novelties of the labor reform that the Government has agreed with the unions and the majority employers in the country in the first major social agreement to change labor market legislation in depth.

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Like a movie shot, nothing is accidentally in place. Someone has thought and chosen that this be the picture on the wall and not another, for example. The photos, the clothes of the protagonist. They all have a goal. These days of debate ‘in extremis’ of the labor reform, the negotiators of the text took care of “until the last comma.” Because behind the broad articles agreed that may be somewhat technical, rights for workers, new conditions and opportunities for companies are reflected. Also some tools that seek to end serious problems in the labor market in Spain, such as high temporary employment and massive layoffs in crisis situations.

After describing the most important matters of the agreement, below we are going to explain the practical application for companies and workers of some of these measures. And, above all, what have negotiators tried to achieve with them. Although now the Government will approve the legislation as a royal decree law, on December 28, the norm has yet to obtain parliamentary support for its future application.

The sector fixes wages again

This is what is known as the “primacy of the sectoral agreement over that of the company”. A company cannot set wages below those set by the activity sector in its own agreement. The measure tries to avoid the wage devaluation practices of some companies, which sometimes even reach agreements with a somewhat dubious representation of the workforce. In any case, on many occasions the bargaining power of a sector as a whole is greater than that which exists within a single company.

On a practical level, it could be done by any company, but it was especially the case in multi-service companies, for example, that have staff for many different activities, such as maintenance and cleaning. It has also been problematic in the security sector. With these maneuvers based on the reduction of wage costs, companies that dropped prices were able to impose themselves on other competitors and win contracts.

The expired agreement does not decline, it stays

It is about the “ultra-activity” of collective agreements, which is once again indefinite. That is to say, when the validity of a collective agreement ends, it does not decline when the negotiation ends without a new agreement. The Government of Rajoy put a one-year limit on ultra-activity.

The deadline made it possible to get rid of contracts simply by waiting, which left the labor conquests of the past in a rather weak position.

The conditions of the subcontractors

This point is more in dispute over its application. The parties have concluded the reference sectoral collective agreement in the subcontracted companies “will be that of the activity carried out, regardless of its corporate purpose and legal form.” This was supposed to be the formula to guarantee minimum conditions for outsourced personnel, so that at least the conditions of the work they perform (cleaning, security, gardening, etc.) are met.

In the agreement reached this Thursday, it is added that when the contracting company has its own agreement, this will be applied. Of course, you must always comply with the prevalence of the sector agreement in terms of wages. Once again, the practical objective of the measure set by the Executive was to avoid the most ‘pirate’ companies that beat their competitors by lowering staff salaries.

Tell me the cause of that temporary contract

The legislation makes an effort to “causalize” temporary contracts. That is, to reinforce the link of the contract with the temporary cause that justifies it. The company must specify “precisely” in the contract “the enabling cause of the temporary contract, the specific circumstances that justify it and its connection with the expected duration.”

Two types of temporary contract are created: to replace workers and for “production circumstances”. The latter can respond to two types of causes. Some are the “unpredictable” by which companies need more staff temporarily before unexpected peaks in production, for example. The second, for “foreseeable” causes but of very short duration (the so-called “occasional” contracts), which serve for exceptional contracts that can be foreseen and that are of very short duration, such as those of support in the trade in the Black friday

Fraudulent temps are more expensive

Companies that hire temporary temporary workers in an irregular way should know that they will be exposed to greater penalties if the legislation goes ahead in Parliament. Your pocket will hurt more because not only are the amounts of penalties increased to 10,000 euros in the most serious cases, but they will be applied by each worker. Now it is only imposed for a detected violation.

For example, if Bar Juan has five fraudulent temporary employees, the Labor Inspectorate today would impose a penalty. With this legislation there would be five offenses.

Before the layoffs, here are the future ERTE

Another challenge of the standard has been to offer companies an instrument similar to ERTE during the pandemic. An internal flexibility mechanism that acts as a cushion for employment in the face of future crises, whether in the economy (cyclical) or in particular sectors. The objective is to provide alternatives to companies so as not to fire in these moments of uncertainty.

The tool, called Network Mechanism, recognizes aid to companies that take advantage of it in the Social Security contribution, as well as public money for training their staff. The savings that arise are of different amounts depending on the case (from 20% to 90%). In return, employers have to offer training plans to workers and six-month job retention commitments, as has happened with ERTEs due to the coronavirus. Workers affected by the Network Mechanism will receive a specific benefit, similar to unemployment (70% of the contribution base) without being consumed by the unemployment generated to date.

Training contract up to 30 years

The review of training contracts is addressed, which are of two types: training “in alternation”, while they are studying; and “to obtain professional practice”, intended for those who already have a degree and are learning the profession. Among the novelties, the age up to which a contract can be signed “in alternation” is increased by five years (30 years) and the minimum duration of this is reduced, which will be able to be three months and the maximum (up to two years instead of the current three).

It also reduces the maximum duration of the contract “to obtain professional practice”, up to one year instead of two. Among the rest of the changes, the remuneration will be the one that marks the collective agreement, when now it could be 60 and 75% of what it set.

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