PP joined by Catalan nationalists as Congress approves controversial decree

The Spanish lower house on Thursday approved by an ample majority a decree that enshrines radical changes to how the labor market works.

Given that the ruling Popular Party (PP) has an absolute majority in Congress, the outcome of the vote was never in doubt. As was expected, the main opposition Socialist Party (PSOE) voted against the decree, as did deputies from the United Left (IU) coalition and the Basque pro-independence radical abertzale group, Amaiur.

However, most of the center-right groups — UPyD, Canaries Coalition (CC) and the Basque Nationalist Party (PNV) — also voted against. In all there were 197 votes in favor and 142 against the decree, which was passed by the Cabinet last month and which now becomes a draft bill that will make its way through Congress.

The Catalan nationalist CiU bloc decided at the last minute to vote along with the PP after agreeing to clauses that would give the regions some jurisdiction over labor law. The CiU and the PP have already begun discussing further amendments.

“This is a labor reform based on ideology — an adjustment for radical-right ideas that go against the socialist rights of workers,” said PSOE parliamentary spokesman Soraya Rodríguez.

The reform makes it easier and cheaper to sack workers. Employers can cite so-called objective clauses, such as three consecutive quarters of falling sales, to justify laying off employers with compensation of 20 days’ wages for every year on the job up to a maximum of one year’s pay. It also provides for a new work-experience contract, under which companies can dismiss workers who have been employed for up to a year without any compensation at all.

In cases of unfair dismissal, compensation has been reduced to 33 days’ wages for every year up to a maximum of two years’ wages from 45 days and a limit of 42 months wages.

“Sacking will not be free; it will be with good reason,” said Labor Minister Fátima Báñez, who defended the reform.

PNV lawmaker Emilio Olabarria, a labor law professor, said the reform skewed the legislation firmly in favor of employers and would not achieve the government’s stated aim of reducing unemployment.

Spain had the highest jobless rate in the Europe Union at the end of last year at 21.85 percent. The government estimates unemployment will rise to over 24 percent this year when it expects the economy to shrink by 1.7 percent.

Prominent think-tank FUNCAS on Tuesday echoed the Bank of Spain in arguing that the reform would lead to the loss of further jobs in a recessionary environment.