Spain: latest working life developments Q2 2018

A peak-level wage agreement, a rise in the pension rate and an important ruling for platform workers are the main topics of interest in this article. This country update reports on the latest developments in working life in Spain in the second quarter of 2018.

Wage agreement to improve the lowest wages

On 25June, a wage agreement was signed by the most representative trade union organisations – the Trade Union Confederation of Workers’ Commissions (CCOO) and the General Workers’ Confederation (UGT) – and employer organisations: the Spanish Confederation of Employers’ Organisations (CEOE) and the Spanish Confederation of Small and Medium-Sized Companies (CEPYME). The peak-level, inter-sectoral agreement covers wages and collective bargaining until 2020.

The social partners are keen for this pact to mark a turning point in relation to the internal devaluation which started in 2010 and led to a decline in wages in real terms. It also puts an end to the deadlock in bipartite peak inter-sectoral agreements for collective bargaining coordination and employment; the last agreement was signed in 2015, but attempts to negotiate a new agreement had failed since then. Even though these agreements are not binding, they have an important role, providing general guidelines for negotiators at sectoral and company level.

The agreement sets out negotiated wage increases of up to 2% until 2020, with the possibility of an additional 1% increase depending on productivity trends, business performance and levels of absenteeism. It also establishes a base of €14,000 a year for negotiated wages; a clear improvement for the lowest salaries, which suffered most in the crisis.

Budget Law incorporates pensioners’ demands

Negotiations around the Budget Law, approved by the government in early June, have led to the introduction of some changes in relation to pensions. More specifically, an increase in pensions has been agreed in accordance with the Consumer Price Index (CPI) for 2018 and 2019. In addition, the implementation of the ‘sustainability factor’ (which effectively cuts new pensions in real terms) is delayed until 2023. It has also been agreed to raise the ‘widow’s pension’ to 56% of the regulatory base.

These changes must be interpreted in light of the wave of demonstrations organised by pensioners in Spain, protesting against their loss of purchasing power. These demonstrations were particularly important in the Basque Country: in exchange for the pension improvements, the Basque Nationalist Party (PNV) gave their support to the government so that the Budget Law could be passed.

Ruling endorses employment relationship for Deliveroo workers

A judgment by the Social Affairs Court of Valencia ruled that Deliveroo riders are dependent workers, forcing the company to reinstate or compensate a worker who had been dismissed. The company was sued by a rider who received a daily average remuneration, excluding taxes, of €28.49. The contract signed with the company indicated that the rider would act ‘at all times as an independent contractor’ and would not be considered ‘as agent, employee or partner of the company’, and set the amount that would be received (€3.38 per delivery made) and how the deliveries should be carried out. The worker was then dismissed without receiving any compensation.

The ruling declared the dismissal of the worker as unfair and established, for the first time, that there was an employment relationship between Deliveroo and the rider. This judgment endorses the position of the Labour Inspectorate of Valencia made in December 2017, according to which riders cannot be considered as self-employees or independent workers. The judgment came in the middle of growing interest and concern about work in the platform economy and the extension of new forms of employment, including crowd employment, facilitated by the use of technology. This is the first time a ruling has rejected the idea, promoted by platforms, that these workers are merely service providers and do not have an employment relationship.

Commentary

Steps are being taken towards the recovery of the employment and social rights of workers lost or eroded after the crisis. Social dialogue has delivered a first bipartite peak agreement on wages after three years, with a particular focus on improving the position of those with lower incomes. The protection of platform workers’ rights has also become an important policy issue, particularly for trade unions. Recent judgments point towards enhancing the protection of these workers.

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