Background for Spain

Male unemployment decreased by 13.3 percentage points from 2012 to 2022. Youth unemployment remained high, at 29.8%, in 2022, compared with the EU average of 14.5% for the same year. The total employment rate in 2022 was 74%, close to the level for the EU27 (74.5%). Youth employment figures decreased between 2012 and 2022 (by 6.3 percentage points), and stood at 32.7% in 2022, compared with the EU average of 40.7% in the same year. The pandemic influenced youth unemployment the most. In 2021 it increased by 5.8 percentage points compared with the previous year. Following the initial impact of the pandemic, in 2021 Spanish gross domestic product grew by 5%, its biggest increase since 2000, according to the Spanish National Institute of Statistics. The increase in economic activity was driven by the recovery of the service sector, which boosted employment rates to pre-pandemic levels. However, the latest economic and employment indicators show signs of slowdown, particularly in the manufacturing and agriculture sectors. The most notable labour market development in 2022 was the sharp decrease in temporary employment of 27.7% in the last quarter of the year compared with the same period in 2021, and the increase in employees on permanent contracts of close to 13%. This trend is explained by the entry into force of the 2021 labour market reform, which clearly restricted the use of fixed-term contracts to specific circumstances and tightened sanctions for the fraudulent use of temporary contracts.

The main labour code for private employees is the Workers’ Statute (Law 8/1980). The statute also regulates collective bargaining issues (mechanisms governing coordination between different levels of collective wage-setting, opt-out clauses and conditions, etc.). It has been modified by different royal decrees and laws. The last law that modified important elements of the statute was Law 3/2012 of 6 July.

The main labour code for public employees is the Basic Statute of Public Workers (Law 7/2007).

Trade union regulation and representativeness is regulated through the Organic Law of Trade Union Freedom (Law 11/1985).

The main change in the legal framework of employment relations in 2022 was the implementation of Law 32/2021 of 28 December on urgent measures for labour reform, the guarantee of stability in employment and the transformation of the labour market. The new regulation was agreed on by the social partners before it was enshrined in legislation. The reform induced significant legal amendments in three different dimensions. Firstly, the law restricted temporary hiring to circumstances in which additional workers are necessary for production or in which workers need to be replaced. Secondly, the law reinstated the ultra-activity principle in collective bargaining agreements along with the prevalence of sectoral collective bargaining on pay issues over company-level agreements. These measures entail the reversion of the most controversial changes adopted in the 2012 labour market reform. Thirdly, the law has introduced a new mechanism enabling the internal flexibility of companies through short-time working schemes during crises or restructuring.

Industrial relations in Spain during the 1980s were affected by the political transition from a dictatorship to a democracy, as well as a process of industrial and economic modernisation implemented to prepare the country for its integration into the European Community. During the first years of the transitional period (1978–1982), the unions accepted wage moderation in exchange for institutional recognition and the further development of social and labour rights. In addition, they favoured some coordination and centralisation of collective bargaining. The collective bargaining structure consolidated in those years is still present today and is characterised by multilevel bargaining, with negotiations taking place at sectoral, provincial and company levels.

From 1986 to 1997, a period of crisis in ‘social concertation’ weakened collective bargaining. The most important problems at this time were the lack of coordination and the poor renewal of rounds of collective bargaining.

After 1997, social dialogue was revitalised during a period of economic and employment growth. Thus, from 1997 to 2008 various tripartite agreements were reached. In addition, annual bipartite peak intersectoral agreements on collective bargaining started to be concluded by the social partners. These agreements play an important role in coordinating collective bargaining in Spain. The economic crisis that began in 2008 has strongly affected the industrial relations context. The Spanish system weathered the impact of the economic crisis relatively well in the first years, but the situation changed dramatically after 2011, when two important reforms on collective bargaining rules were enacted by the government. Both reforms seemed to accept a common diagnosis formulated by different EU and Spanish institutions, which accused Spanish collective bargaining of being too rigid, thus impeding companies from modifying working arrangements in order to adjust to shocks. The last reform, approved in 2012, has affected some of the most important dimensions of the Spanish collective bargaining system (ultra-activity, predominance of company-level agreements, etc.). Several studies have shown how labour market reforms have contributed to the process of internal devaluation and decline in real wages, which have not returned to pre-crisis levels yet. During the crisis and the implementation of austerity policies, social dialogue broke down. It only started to recover in 2016. The role of social dialogue has been revitalised, especially since 2018, with the signature of tripartite agreements and bipartite pacts aiming to reverse some of the negative effects of the economic crisis, and gained momentum in 2019.

The intensity of the impact of the COVID-19 pandemic on Spain’s economy and labour market required the government and social partners to work closely to mitigate the effects in the first year. As a result, social dialogue has played a central role in deciding the key instruments to reduce the negative effect on the labour market and employment relations, but also to regulate important aspects of working life, such as telework. Among all the policy measures negotiated and implemented, the extension of the conditions for temporary lay-offs and reduced work schemes agreed in the early stages of the crisis deserve particular attention. The experience gathered during the pandemic includes the development of new policy measures aimed at minimising the risks of future crises on the labour market.