Government rejects introduction of single work contract

Government officials and labor union leaders on Tuesday dismissed the idea advanced the previous day by the European commissioner for employment, László Andor, that Spain introduce a single work contract as a means of eliminating the duality of the local labor market.

Andor insisted that his suggestion was not a formal recommendation by the European Commission, a clarification that Labor Minister Fátima Báñez picked up on, while arguing the Spanish Constitution was an obstacle to the introduction of a single contract that would eliminate the disparities between the rights of temporary and permanent workers. The Popular Party (PP) politician did not explain how this would breach the Constitution.

Speaking in Madrid where he is attending a series of events, Andor insisted that Spain had a serious problem with high unemployment, particularly among young people, adding that it was up to individual countries to find solutions, including changing the law in order to allow them to do so.

Spain’s unemployment rate currently stands at 27.2 percent, twice the European Union average, while the rate for workers under 25 is 57.2 percent. The country also has the highest rate of temporary workers within the EU. Spain overhauled its labor laws in February of last year, making it cheaper and easier to sack workers, although a number of different types of work contract continue to remain in place. However, those on permanent contracts still have far more rights than temporary workers

“What the European commissioner did was to back the flexibility of the labor reform,” Báñez said. “We have reduced the duality of contracts, lowering the percentage of people on temporary contracts by three points in a year as difficult as 2012 was.”

Prime Minister Mariano Rajoy on Monday said he was “very satisfied” with the labor reform introduced last year, adding that there are no plans to change it.

However, Andor told reporters that the number of temporary workers remained one of the big problems of the labor market in Spain.

Economy Minister Luis de Guindos said Tuesday he expects the European Commission to approve the labor reform introduced by the government in its latest assessment of developments in Spain. “The government always listens to the recommendations made by the European Commission, but [Brussels] is satisfied with the labor reform,” the minister said.

De Guindos said the benefits of the reform will make themselves clear once the economy starts to pick up again. “The threshold above which the Spanish economy starts to create employment has been significantly reduced as a result of the labor reform,” he said.

Juan Rosell, the chairman of the Spanish Confederation of Business Organizations (CEOE), Spain’s largest employer group, said the idea of a single contract was “very bold” as it would require a complete overhaul of current labor legislation. However, he insisted that the current system (with 41 different types of labor contracts) needed to be simplified.

Ignacio Fernández Toxo, the secretary general of the CCOO labor union, was highly critical of the idea of a single contract. “It’s an undisguised attempt to take advantage of the circumstances to make hiring in Spain even more precarious,” he said.