Unions reject offer of a two-year salary freeze

The Spanish Confederation of Business Organizations (CEOE), the country's largest employer group, has proposed that the government freeze all salaries for the next two years and come up with a special job contract that would reduce the number of temporary positions as well as the money companies have to pay out to laid-off workers.

The CEOE made the offers Thursday at a meeting with mid-level representatives of the nation's largest unions, CCOO and UGT. Both employers' and workers' groups are trying to come up with a common position to present to the Popular Party (PP) government for its proposed labor and salary-reform package.

The CCOO and UGT rejected the CEOE's proposals outright. Union leaders say they would prefer that workers see hikes below inflation rates in their wages between 2012 and 2014, and that employees are given more flexibility in negotiating raises with their employers during this period.

In its salary proposal, the CEOE said it would accept a slight increase in wages for 2014 but didn't offer any figures.

CCOO secretary general Ignacio Fernández Toxo had predicted earlier that the unions and the CEOE would come to an agreement over the wage issue.

Prime Minister Mariano Rajoy has given both sides this month to come up with their joint agreement on labor and salary reform or he will introduce his own plan to Congress in February. The previous Socialist government also tried to reach a similar agreement with the unions and CEOE but had to introduce watered-down changes on its own after the two sides failed to compromise.

Fernández Toxo, UGT secretary general Cándido Méndez and CEOE president Juan Rosell are expected to meet Monday to discuss each side's offerings.