1997 Annual Review for Spain

This record reviews 1997's main developments in industrial relations in Spain.

Introduction

In recent years the Spanish economy has undergone a process of recovery. After the recession of the early 1990s, a cycle of growth began, parallel to that of other countries in the European Union. In 1997, GDP rose by 3.4% - compared with 2.1% in 1994, 2.8% in 1995 and 2.1% in 1996. This was mainly due to the increase in domestic consumption, investment and industrial activity and the resurgence of construction. The prospects for growth in 1998 are also optimistic, with forecasts of around 3.6%. This has been particularly helped by the fall in inflation, which at 2.1% in 1997, was the lowest for 30 years. This low inflation rate has led to a reduction in interest rates, which were very high in the 1980s. The public deficit has also been reduced through restrictive budgets and privatisation of public companies (ES9709123N). The public deficit stood at 2.6% of GDP in 1997. According to Eurostat figures, the unemployment rate stood at 20.8% in 1997, compared with 22.2% in 1996 and 24.3% in 1995. The number of those in employment increased by about 371,000 in 1997 in comparison with 1996. Nevertheless, fewer jobs were created than in the previous year, despite greater economic growth.

The Spanish political situation has been characterised by relative stability of the Government of the conservative People's Party (Partido Popular), which has contributed to the recovery of the economy. This stability has been achieved thanks to the continuing support of the nationalist conservative parties of Catalonia and the Basque Country, which in exchange demand concessions to strengthen regional power.

Key trends in collective bargaining and industrial action

Consensus between the social partners led in April 1997 (ES9706211F) to national intersectoral agreements on "collective bargaining" and "filling the gaps in regulation" (alongside a third accord on "employment stability" - see below), signed by the central employers' associations - the Spanish Confederation of Employers' Organisations (Confederación Española de Organizaciones Empresariales, CEOE) and the Spanish Confederation of Small and Medium-Sized Enterprises (Confederación Española de la Pequeña y Mediana Empresa, CEPYME) - and trade union confederations - the Confederation of Workers' Commissions (Comisiones Obreras, CC.OO) and the General Workers' Union (Unión General de Trabajadores, UGT). These two agreements encourage universal collective bargaining and the basing of company-level bargaining on nationwide sectoral collective agreements.

For the unions, the two accords constitute an extremely important point of reference because they have cleared up some of the ambiguities of the labour reforms which occurred in 1994. These reforms gave greater autonomy to the social partners in collective bargaining but at the same time introduced a greater degree of "vulnerability", which meant that agreements on the regulation of employment conditions were often restricted to the company level (ES9712137F). As a consequence of a greater degree of autonomy over recent years, there has also been a noticeable trend toward the negotiation of "special clauses" on geographical mobility, regulation of overtime, temporary jobs and social benefits such as pensions (ES9711231F).

Industrial relations, employment creation and new forms of work organisation

Employment policy was marked by the intersectoral agreement for employment stability, signed in April 1997 by the main social partner organisations (ES9706211F). One of the fundamental objectives of this agreement was to encourage stable employment and to reduce temporary employment (ES9702203F). Nevertheless, the temporary employment rate has remained at 33%, the highest in the European Union, while job creation has had a smaller effect on unemployment than in previous years. There has, though, been limited progress on temporary employment under the employment stability agreement: in 1997, permanent contracts represented 8.5% of the total, whereas in the previous year they had represented 3.9%, while of the employment contracts signed in 1997, 91.5% were temporary, compared with 96.1% in 1996. If in the years to come this tendency is consolidated, there will be room for hope (ES9801239F).

Atypical forms of work, such as temporary employment contracts, have been consolidated for over a decade as a distinctive feature in the new forms of flexible - and also unstable - work which have emerged in Spain. However, the new phenomenon of recent years is undoubtedly the increase in part-time employment. According to EPA (survey of the working population) figures, in 1991 only 591,000 people worked part-time. The figure rose to 780,000 in 1994, and by 1997 it had reached 1 million, which represents 7.8% of the working population. Since the reform of the labour market in 1994, there have been measures designed to encourage part-time employment aimed at two groups of unemployed persons - women and those aged under 24 years (ES9703203F). To a certain extent, the development of part-time employment follows the views of the European Commission's, expressed in its 1997 Green Paper on partnership for a new organisation of work, which has also been reflected in labour legislation through measures such as the annualisation of working time, flexible working hours and encouragement of permanent part-time contracts.

However, today the profile of part-time employment in Spain is different from that of the rest of Europe, at least that of the Netherlands and the Scandinavian countries. It is basically a form of unskilled employment for a fixed period carried out by married women with children, working predominantly in the cleaning, catering and retail sectors. However, openings have recently appeared in part-time employment for skilled women in sectors such as teaching, health and the public administration.

There has been little experience of initiatives in worksharing (ie, redistributing available work and promoting employment), which have generally been limited to companies - basically cooperatives - located in the Basque Country, whose regional government is promoting such schemes (ES9707116F). At the end of the year, the trade unions were pressing for the reduction of the working week to 35 hours, a proposal that has met with criticism from employers' associations and the Government.

Another topic of growing interest is greater flexibility in working hours in the retail and banking sectors. In 1997, the afternoon opening of offices was negotiated in some banks (ES9706212N), in exchange for creating new jobs in the offices concerned.

As for the employment measures agreed at the Luxembourg Employment Summit in November, the Spanish Government has not adopted all of them. The main measure was a commitment to offer, within a five-year period, vocational training, reintegration in employment, professional retraining or a work-experience contract to all persons under the age of 25 if they have been unemployed for six months, and to all persons over the age of 45 if they have been unemployed for one year. The Spanish Government obtained an extension of the five-year period, without making a binding commitment to implement the measure (ES9712235F).

Developments in representation and the role of the social partners

The employers' association s at national level did not undergo any substantial changes in 1997, though at the regional level, there were some mergers. In Catalonia, Business and Financial Services (Servicios empresariales y financieros, SEFES) and the Small and Medium-sized Enterprises of Catalonia (Petita i Mitjana Empresa de Catalunya, PIMEC) merged to create a single employers' association that will represent small companies. This new employers' association, called PIMEC-SEFES, comprises 45,000 companies and 111 guilds and associations, employing some 340,000 workers (ES9707118N).

Among the trade union s, the greatest innovation was the UGT's initiative of creating a specific organisation for unemployed people (ES9801143N). This initiative is partly in response to the fear that in the future a great number of autonomous movements representing unemployed persons will appear, as has happened in France (FR9801189F). In fact, the first example of this had already been recorded in Zaragoza, where for unemployed people have been demanding free urban transport for some time. Furthermore, several associations of unemployed people have set up the Permanent Commission for Employment (Mesa Permanente por el Empleo) (ES9803249F). The trade unions have been critical of the mobilisation plans put forward by these associations.

As for the development of the European Works Councils in multinational companies, there is so far only limited experience in Spain, affecting mainly the automobile and chemical industries.

Industrial relations and the impact of EMU

The preparation of Spain for EMU has focused on reducing the economic imbalances of inflation, public deficit and unemployment. The first objective was relatively easy to achieve after over a decade of anti-inflationary economic policies, aided by the fall in consumption since 1994. The second, reducing the public deficit, has been achieved through restrictive budgets, reduction of public expenditure and funds obtained through the privatisation of large public companies - such as Telefónica (ES9703108N) Aceralia (ES9711134N), Endesa and Argentaria- and by calling for wage moderation in collective bargaining. The reduction in public expenditure has been shown clearly in the public sector, where the purchasing power of public employees has fallen by 14.8% since 1986 (ES9712236N).

In order to achieve convergence, the wage structure has also been made more flexible through the decentralisation of collective bargaining and the reinforcement of the autonomy of the social partners (ES9705209F). This has given new dynamism to industrial relations and to collective bargaining at a sectoral and company level (ES9801238F). The greater autonomy of the social partners and the decrease in administrative intervention have brought about changes in the Spanish pattern of industrial relations and paved the way for a series of agreements, such as the 1996 central agreement on settling labour conflicts out of court (ES9705107F).

Conclusions and outlook

Economic growth is evidently not sufficient to absorb Spain's high level of unemployment. Fundamental issues such as structural unemployment for technological reasons have led to the emergence of a new debate on the reduction in working time and on worksharing. However, only the trade unions have put forward such proposals, whereas the employers and the Government are reluctant to debate them.

Moreover, temporary employment is still high, despite the measures taken to develop stable employment. The instability and poor legal protection which affects temporary employees mean that there is a risk of heavy job losses when the economy enters a downward cycle. These issues will continue to be highly pertinent in 1998.

As for industrial relations, the novelty of 1997 was the tendency towards greater "proactivity" on the part of the social partners, owing to modifications in the structure of collective bargaining and the reduction in the level of direct intervention by the public administration. The possible risk could be a greater vulnerability of less organised sectors and those with less structured industrial relations, such as small companies in which there is hardly any union representation.

(Antonio Martín Artiles, QUIT)

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