Labor talks collapse as CEOE moves goalposts

Spanish employers and labor unions on Thursday abandoned talks on overhauling Spain's collective bargaining system to make it more flexible because of irreconcilable differences.

Negotiations had been on the go for almost five months and at one point the chances of reaching an accord on making collective agreements more responsive to shifts in the pace of economic activity seemed favorable.

After reaching a series of partial agreements, under pressure from more radical elements within its ranks, the employers association CEOE changed tack on Monday by presenting a 27-page document that amounted to a major shift from the terms it had been negotiating up until then with the unions. The CCOO and UGT rejected the employer group's new demands as totally unacceptable.

The CEOE on Thursday sent the unions a new five-page document that one labor representative described as a "summary" of the document submitted on Monday, the day that UGT chief Cándido Méndez claimed negotiations broke down.

The decision to end the talks was taken at a meeting on Thursday with the CEOE chairman, Joan Rosell, Méndez and Ignacio Fernández Toxo, the head of CCOO. "I am convinced that no decision was reached because the CEOE did not dare to take the step toward an agreement," Méndez said.

Méndez went on to say that the CEOE's new stance had effectively "turned back the hands of the clock and the dates on the calendar, burying the negotiations at the starting point of several months ago."

"It's not worth it to carry on negotiating," added Rosell. "We have decided by mutual agreement to give the talks up as concluded."

The ball is now in the government's court. Earlier Thursday, Prime Minister José Luis Rodríguez Zapatero said that the government would unilaterally decree an overhaul of the country's collective-bargaining system on June 10 if employers and labor unions fail to reach an agreement.

"I fervently hope that they do reach an agreement, but if that is not the case, the government will approve the reform of collective bargaining next Friday," Zapatero said in an interview with state radio station RNE.

The government already has a draft version of its proposed reform of the wage-bargaining system, based largely on the partial agreements reached by employers and labor.

The main detonator for the shift in the CEOE's stance appears to have been the conservative Popular Party's (PP) resounding victory in regional and municipal elections held on May 22, an outcome that puts the PP firmly on course to win general elections next year.

The CEOE now seems willing to sit it out in the expectation that the PP would look more favorably on the radical overhaul of the wage-bargaining system that businessmen are looking for.