UGT criticises effects of labour market reform
In August 2001, Spain's UGT trade union confederation issued a report making a negative assessment of the effects on employment of the labour market reform introduced unilaterally by the government in March, to union opposition.
In March 2001, the conservative People's Party (Partido Popular, PP) government introduced a labour market reform by decree (royal decree-law 5/2001), in contrast to the practice of concertation with the social partners in this area that had started with the 'April agreements' of 1997 (ES9706211F). The unilateral legislative intervention came after negotiations on the issue among the social partners had failed to reach a consensus. The main elements of this reform (ES0103237F) were: the prolongation and extension to more groups of workers of the special open-ended employment contracts, introduced in 1997, which attract several types of reduction in employers' social security contributions contract and involve a lower cost of dismissal; the introduction of greater flexibility in part-time employment through the removal of quantitative limits on its definition; and some measures related to subcontracting. The government claimed that the aim of the reform was to promote employment stability.
In August 2001, the General Workers' Confederation (Unión General de Trabajadores, UGT) issued a report analysing the development of recruitment in the three months following the coming into force of the new labour market reform. The report states that the impetus towards greater employment stability that had been provided by the negotiated labour market reform of 1997 has been reversed, because there have been fewer open-ended contracts - both full- and part-time - signed since the new reform. To be precise, 15,000 fewer full-time open-ended contracts were signed in the three months after the March 2001 reform than in the same period after the reform of 1997. The number of open-ended part-time contracts being signed has shown a progressive decrease since March 2001. The conversion of temporary contracts into permanent ones has increased, though according to UGT this is because conversion is being used instead of new permanent recruitment. Finally, the report states that there has been a major increase in certain types of casual recruitment, increasing the tendency towards unstable employment.
UGT claims that the 2001 labour market reform has had no direct positive effect on the main problems of the Spanish labour market: temporary employment and the high industrial accident rate (ES0106147F).
In short, UGT considers that the 2001 reform is:
- ineffective, because it does not deal with the types of employment contract that are most used and are most open to fraudulent use through successive contracts (contracts 'for works and services' and temporary contracts for circumstances of production);
- regressive, because it generalises contracts allowing for cheaper dismissal, fosters the segmentation of workers, and reduces labour costs for companies; and
- authoritarian, because it ignores recent experience of social dialogue and concertation and was introduced by decree.
Finally, UGT considers that the government's attitude is excessively tilted in favour of the interests of the employers' organisations, and that it intervened to frustrate the initial bargaining process.