The CEOE and the Ministry of Labour consider their positions on reforming the labour market

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The CEOE has proposed a new type of contract of fixed duration. The Ministry of Labour responded with the idea of penalising temporary employment by increasing employers' unemployment contributions for temporary contracts and reducing them for permanent contracts.

The parties to the bargaining commission for the social dialogue and the reform of the labour market have made a first round of proposals. On 7 April, at the headquarters of the Senior Management Employers' Club (Club Empresarial de Alta Gestión), the chairman of the Spanish Confederation of Employers' Organizations (Confederación Española de Organizaciones Empresariales, CEOE) announced that the employers' organisation will put before the bargaining commission a proposal of a new stable work contract of fixed duration for works or services to be negotiated in collective agreements. However, the president of the CEOE did not give precise details of the characteristics of the new contract.

The CEOE feels that the bargaining must focus on improving the amount and quality of employment, and the question of the dismissal is not a central issue in the debate. The quality of employment, apprenticeship and vocational training are now key questions for improving the productivity and competitiveness of the Spanish economy. According to the CEOE one of the obstacles to competitiveness lies in the non-wage labour costs. These represent a 33% supplement on gross pay, in addition to the 5% paid by the workers.

On 26 April the Ministry of Labour (Ministerio de Trabajo) responded with a proposal for penalising temporary contracts by increasing contributions. The Socialist government proposes that employers should pay a higher unemployment contribution for temporary contracts. At present the employers meet between 6.7 and 7.7% of the workers’ base rate for Social Security (Seguridad Social) contributions, which come to a total of between 8.3 and 9.3%. The proposal by the Ministry of Labour is to raise these contributions by 1.5 points for temporary contracts and to reduce them by 0.5 points for permanent contracts in order to make the latter more attractive. The Ministry thus rules out the possibility of a general reduction in contributions put forward by the CEOE.

The current policy of allowances for work contracts is complex and wide-ranging, and the Ministry of Labour also aims to make substantial changes in this area. Its first aim is to simplify the types of allowance and to reduce the current 81 cases of incentives to only one for each specific target group: the young, women, the disabled and persons over the age of 45. Furthermore, the Ministry of Labour wishes to put an end to the negative effects of the current recruitment procedure. The current temporary contract has become the ordinary means of access to companies, and when the temporary contract is converted into a permanent one the employers receive an allowance of half of the contributions for common contingencies.

With regard to temporary contracts for work and service, the Ministry of Labour considers that they should be an exceptional option channelled through temporary employment agencies (Empresas de Trabajo Temporal). The Ministry also considers that contractors and subcontractors should have a fixed core of employees. Finally, in relation to dismissal, the proposal of the Ministry of Labour is to generalise the formula laid down in the Multi-Sector Agreement for Employment Stability ('Acuerdo Interconfederal para la Estabilidad en el Empleo') signed in 1997 consisting in a compensation of 33 days per year of seniority compared with the normal 45 days.

The figures on the employment situation at the end of 2004 show the high proportion of low-quality and precarious employment. The number of workers on temporary contracts was 4,276,000, of whom 1,919,100 are women and 2,356,900 are men. The number of workers on permanent contracts was 9,679,400.

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