Friday, January 28

Labor reform, a great opportunity

Those of us who come from the world of Law know that laws are important, but they don’t work miracles. By themselves they do not change reality, although they can contribute to it.

In Spain, a productive model characterized by its specialization in sectors that obtain important benefits without much investment has been consolidating. It has helped to have a reserve army of unemployed labor, especially the unskilled. This has encouraged competitive strategies based on labor costs and precariousness – which is not only abusive temporality – and discouraged innovation.

Even when the pressure on employment was reduced in the mid-1990s as a result of the lower entry of young workers, this strategy continued to be abused, importing millions of immigrants from five continents. Some with high levels of training, but who were occupied in very precarious jobs.

Although it should be noted that, in parallel, some companies – still few – have taken another path. Hand in hand with the export sectors, innovation strategies have been incorporated, which require quality and stability in employment. This is how, during the great recession, Spain has maintained its share of global exports and has continued to grow ever since. It is precisely these most competitive companies that are committed to job stability, training and better wages.

That the legislation is not to blame for the levels of precarious employment is confirmed by the fact that, with the same law, the temporary employment rates are very different in the Autonomous Communities and in sectors. They even differ greatly in the same sector depending on each Community. But just because the legislation is not the culprit does not mean that it is harmless. For years, labor legislation has accompanied, if not encouraged, these competitive strategies based on job insecurity and low wages. And it has been a factor that discouraged business innovation.

In the last four decades, in the heat of the ideological hegemony that we have called ultraliberal despite being ultra-class interventionist, the paradigm has been installed in the dominant discourse that our model of labor relations was very rigid and that the legislation should incorporate more flexibility. Under this beautiful concept of flexibility -who does not want to be flexible- processes of decausalization in hiring, decausalization dismissal, labor deregulation and individualization of working conditions.

Important milestones in this process were the 1984 reform, which began the legalization of temporary contracts to cover stable activities of the company, with the excuse of high unemployment. Or the 1994 reform that established – against the doctrine of the Supreme Court – that road transport workers were presumed to be self-employed. From these powders come the current sludge, an inefficient logistics system, which is based on the externalization of costs and risks from companies to their self-employed “self-exploiters” of themselves and to the environment.

For four decades, legislation has facilitated abusive temporary hiring and firing without cause. More cases of non-disciplinary dismissal, almost disappearance of the causes of nullity of the dismissal -with mandatory reinstatement- disappearance of processing salaries and reduction of compensation. This ease of dismissal has discouraged all the internal flexibility mechanisms of the companies.

The culmination of this legislative strategy was the Decree of the Rajoy Government of 2012, approved in the record time of the first 51 days of government, thanks to the fact that it was drawn up in large company law firms, it passed swiftly through the headquarters of the CEOE and the Rajoy Government put the seal of the Council of Ministers on it.

The hidden objective of this legal reform was to take advantage of the great recession to produce changes in three directions: structurally devalue wages, unbalance collective bargaining in favor of employers, and replace the flexibility agreed upon by the unilateral imposition of companies.

Four decades in the same direction have left legislation deeply unbalanced. That is why it has always seemed naive to me to speak of the complete repeal of the labor reform, as if at once it was possible to retrace the journey in 40 years. That is why it also seemed to me a very complex challenge to reform central aspects of the current regulation through the tripartite agreement.

We will have time to analyze in detail the detailed content of an agreement of great technical complexity. This has only just begun, because after the final drafting -the devil carries the fringes of the agreements- and the approval of the Decree Law comes its validation in Congress -for which the coalition Government does not have a majority. assured- and then the more than probable processing as a bill in which, of course, all the groups that support the government will want to leave their mark.

From a first reading I detect very important changes in the paradigm on which this agreement is built. Not only the ones that have been talked about the most, the prevalence of the sectoral agreement over that of the company, so that it cannot set lower wages than in the sectoral one. Or the maintenance of the application of the agreement, after its validity has ended, as long as it is not replaced by another.

There are areas of the agreement that go beyond reversing the 2012 PP reform and address entrenched problems. Especially what refers to recruitment.

From the outset, the formula is recovered of considering that the employment contract is presumed to be concluded for an indefinite period and that temporary contracts are exceptional and must be subject to very strict causes. We are going to see how companies are relocated and if the practice of fraudulently using temporary contracts is modified or maintained. It may be decisive that the modification of the law on violations of social order is also considered so that each contract made in fraud of law gives rise to a sanction, not as now, that the same labor inspection act supposes a single sanction, be they 3 or 100 fraudulent contracts.

Everything related to the alternation training contract aimed at guaranteeing the training objective of this contract seems important to me. Also the inclusion of construction work and service contracts in the logic of the indefinite contract with a reason for termination assessed.

Among the most significant aspects is a new regulation to facilitate work adjustments without dismissal, taking advantage of the very positive experience of the ERTEs. That alone already supposes a radical change of orientation in favor of a flexibility agreed and controlled by the labor authority.

Of course, as in all negotiations, all parties have had to compromise on their initial approaches. That is the negotiation and agreements – I remember for the forgetful.

The CEOE has assumed the risk of entering into the logic of conditioning the contents of the reform, intuiting that if they did not do so, their interests could be worse off. I suppose that this risky bet is what explains why four important employers’ organizations have disengaged from the agreement, Anfac (automotive) Asaja (field) Foment, from Catalonia, and CEIM, from Madrid.

I sense that the employer’s position may have been influenced by the perception that things are changing in the labor market as well. In Spain there has not been the great resignation of the US, but there are beginning to be indications that less pressure from unemployment can promote dynamics of improvement in wages and working conditions.

In the same way that the unions will have had to give in in some of their initial positions, for example, in not sufficiently plugging the forms of dismissal without cause with the recovery of null dismissal in these cases. A tripartite reform agreed seems less ambitious – it remains to be seen how it would have ended without an agreement – but it is more stable socially and politically.

In any case, it seems clear that this agreement is good news for the country as a whole. It consolidates the stability factor that the social consensus is contributing in the face of the interested tension that the rights feed. In addition, it breaks with the catastrophic discourse of Pablo Casado and places Spain as a reference for social dialogue in the European Union, when until recently we were a reference to the opposite.

This agreement offers us a multiple opportunity. For workers who go from losing rights to recovering and gaining them. For companies interested in abandoning the strategy of precariousness and investing in innovation, because now they have more incentives to do so. And for the country as a whole, it has an opportunity to accompany the large investments that the European Union funds represent with far-reaching reforms, and also agreed.