1999 Annual Review for Spain

This record reviews 1999's main developments in industrial relations in Spain

Economic developments

Robust economic growth and increased company profits were major factors in 1999. GDP increased by 3.5% in the year to August 1999 (compared with 3.7% in 1998). The public deficit, at some ESP 982 billion, represented 1.1% of GDP (compared with 0.9% in 1998). In November 1999, the inflation rate was 2.7%, well above original forecasts for the year, of 1.8%. Inflation rose at a rate of 1.8% in 1998.

With regard to employment, the figures to June 1999 show that the tendency which began with the signing of the intesectoral agreements on collective bargaining and labour market stability of April 1997 (ES9704207N) continued: there was an increase in recruitment and in permanent employment among wage-earners in 1999, coinciding with high economic growth.

There were a total of 2,550,700 unemployed people in 1999, representing 15.6% of the workforce (down 3.3 percentage points in comparison with 1998): this rate was 10.6% for male workers (down 2.8 points on 1998), 22.9% for female workers (down 3.8 points on 1998) and 28.6% for workers under 25 (down 6.2 points on 1998). However, these figures must be interpreted with caution, as there have been methodological changes in the relevant survey, which have caused a statistical effect: it is estimated that there was a drop in unemployment in 1999, but not by as much as these data suggest.

Political developments

In 1999 municipal (local) elections were held in the whole of Spain and autonomous (regional) elections were held in Catalonia. The Socialist Party (Partido Socialista Obrero Español, PSOE and Partit dels Socialistes de Catalunya, PSC in Catalonia) increased its number of votes in both.

The current conservative government, made up of the People's Party (Partido Popular, PP) with support from conservative nationalist parties from Catalonia and the Basque Country, finishes its mandate in early 2000, and the next general elections take place in March 2000. The pre-electoral atmosphere marked the drafting of the state budget for 2000, resulting in the inclusion of a number of social measures (ES9910158F).

Collective bargaining

The bargaining structure in Spain is highly atomised and not well articulated. The 1997 intersectoral agreements on bargaining and labour market stability included a unanimous position of the social partners in favour of greater coordination of sectoral bargaining at national level. The trade unions in particular favoured coordination from above, in an attempt to replace regional sectoral bargaining with national sectoral bargaining (ES9903208F).

The official data on bargaining available at the end of 1999 differentiate only between sectoral and company-level agreements. Up to November 1999, 3,732 agreements were signed, covering 7,556,000 workers. There was relative stabililty from 1998 to 1999 concerning both the proportion of company agreements (71.3% of the total in 1999 compared with 72% in 1998) and the number of workers affected by them (10.17% of the total in 1999 compared with 11.83% in 1998) . It should be remembered that although collective agreements in Spain are generally applicable (and therefore affect a large number of workers), their real effect is questionable: it is difficult to apply the agreements reached in sectoral bargaining in a production structure dominated by small and medium-sized enterprises and precarious employment.

According to trade union sources, the revision of agreements progressed well during 1999: by June, 75% had already been negotiated. However, a certain delay was observed in the renewal of agreements: by June 1999 only 21% of the agreements due for renewal had been negotiated. The unions put forward diverse explanations for this, including trade union elections, the lack of agreement at higher levels (several national sectoral agreements were due to be signed in 1999), and the fragmentation of the Spanish production structure, which makes it more resistant to collective bargaining.

Pay

During the drawing up of the 1999 negotiating platforms, wages became a cause for conflict between the main trade union confederations (ES9903208F): the Trade Union Confederation of Workers' Commissions (Comisiones Obreras, CC.OO) chose to continue the policy of wage moderation in exchange for improvements in employment, while the General Workers' Confederation (Unión General de Trabajadores, UGT) considered that the robust performance of the economy should be translated into an increase in workers' incomes. Nevertheless, a unitary position of wage moderation was finally reached. The employers' associations, however, recommended to employers that they negotiate an increase similar to the average European inflation rate, which is lower than the Spanish rate, thus involving a loss of purchasing power for Spanish workers (ES9901194N). Figures up to November 1999 show that wage moderation was pursued despite high company profits. Purchasing power was not maintained, with an average wage increase (2.3% in November) below the real increase in the retail prices index (RPI) (2.7% in November).

Given the differences that have occurred in the last few years between the government's RPI forecast and the real RPI rate, the unions demanded the reintroduction of wage revision clauses, which had been eliminated from collective bargaining in the past few years. This was a particularly controversial topic, as employers remained opposed to this move. Nevertheless, the percentage of workers affected by wage revision clauses increased to 61.19% (June 1999), compared with 59.92% in 1998, though the effectiveness of these clauses is not clear – despite being included in sectoral agreements, they did not form part of company-level accords, according to CC.OO data.

The tendency to freeze seniority supplements and to abolish them in the case of newly-recruited workers continued, a trend which was applauded by the Spanish Confederation of Employers' Organisations (Confederación Española de Organizaciones Empresariales, CEOE) (ES0001170N).

Working time

The average number of annual working hours has been increasing in Spain since 1993, but it would seem that 1999 marked a change. Figures to November 1999 show that average annual working hours were 1760.7 (compared with 1768.1 in 1998). This means that, for the first time since 1993, there has been a reduction in working hours, reversing the trend of the last five years. CC.OO figures to June 1999 show that a reduction in working hours was included in 22.67% of agreements, affecting 32.16% of workers (compared with 17.88% and 16.92%, respectively in 1998). The reduction in working hours is moderate, in most cases calculated annually, representing on average 13.03 hours per year (compared with 11.22 in 1998).

A reduction in overtime, a commitment that was made in the April 1997 agreements, is still pending: there has been no legislative reform (ES9907141F), and this subject has received little attention in collective bargaining (ES9909150F). According to the latest data on "special clauses", referring to agreements that had economic effects from 1998 and were recorded up until May 1999, the elimination of overtime was found in 9.66% of agreements, affecting 10.50% of workers. Clauses on the reduction of overtime were found in 3% of agreements, affecting some 4% of workers.

Data to October 1999 shows an increase in clauses regulating irregular distribution of working hours on an annual basis. These were found in 20% of agreements, affecting 35% of workers. This increase might be greater if company agreements, which are not reflected by the statistical data, were included. Flexible working time as a way to obtain greater availability of workers is an increasingly vociferous demand on the part of employers. In spite of the maintenance of existing working time distribution, as reflected in data relating to collective agreements, there is some irregular distribution of working hours through company agreements, which are not reflected by statistical data. This is sometimes introduced in bargaining in exchange for job creation, job preservation or conversion of temporary jobs into stable jobs (ES9903207F and ES9906213F).

Job security

The number of collectively-agreed clauses concerning employment continued to increase in the period up until May 1999, being found in 41.45% of agreements, affecting 60.34% of workers. 1999 saw a greater number of clauses referring to the conversion of temporary jobs into permanent jobs (11.81% of agreements, affecting 19.66% of workers) than those which referred to net job creation (3.12% of agreements, affecting 15.46% of workers). Clauses concerning recruitment were found in 28.30% of agreements, affecting 51.11% of workers, though these figures are lower than the trade unions would wish. These clauses cover matters such as limiting the use of temporary agency workers, establishing the jobs that can be covered by temporary contracts, setting the maximum duration of temporary contracts for "market circumstances", or setting a ceiling for temporary contracts among the workforce.

In 1998, pacts for employment were signed in almost all the autonomous communities (regions), offering subsidies for shorter working hours as a means to create employment (ES9902297F). Though there is no official data in this area, the effects still seem slight. In 1999, after these territorial pacts had been in force for a year, there were indications that there was still a long way to go to reach the 35-hour week through collective bargaining, even with subsidies.

Equal opportunities

According to the latest data regarding special clauses in collective agreements that have economic effects in 1998 and were recorded up to May 1999, the number of clauses promoting equal opportunities at work remained stable, being found in 14.32% of agreements, affecting 32.79% of workers.

Training and skills development

In Spain the continuing training system, which has been in force for six years (ES9907133F), links continuing training to collective bargaining. Every year, the number of agreements that regulate training plans has increased, although since 1997 the number of workers affected seems to be falling. According to the latest data, clauses on training plans were found in 20.2% of agreements recorded up to May 1999, covering 27.2% of workers.

Health and safety

Despite the high workplace accident rate in Spain (1,010 workers died between January and November 1999 and 10,798 suffered serious injuries) (ES9904215F), collective bargaining in 1999 paid little attention to health and safety at work. The number of clauses on prevention programmes or health and safety courses was similar to that of the previous year (some 30% of agreements, affecting 18% of workers) despite the increase in serious accidents (up 17%) and deaths (up 4.3%). The unions claimed that current health and safety legislation was not being observed by employers, or was being breached by them: it is calculated that only 35% of companies fulfil the most elementary obligations and that 47% of industrial accidents are concentrated in 30,000 companies (ES9907146N).

Legislative developments

Three major legislative changes took place in 1999.

On 1 July 1999 the reform of the Law on Temporary Employment Agencies (TEAs) was passed, bringing the wages of the workers of TEAs into line with those of the user companies (ES9907140F). This law reform came in response to the growing social rejection of TEAs due to perceived abuses and exploitation of their workers, the demands of the unions since TEAs were introduced in Spain in 1994, and the commitments made by the social partners in the April 1997 agreements. The 1994 legislation established that the wages of TEAs workers should be regulated by the agreement applying to the TEA and that their contract could be temporary or permanent. Most TEAs workers were employed on temporary contracts and their wages were far lower than those of permanent workers. The new law has remedied this difference in wages by establishing that TEA workers should be paid according to the user company's collective agreement.

On 7 November 1999 the Law on Combining Family Life and Work (ES9911165F) was passed, completing the transposition of EU Directives on maternity protection (1992) and parental leave (1996) into Spanish labour legislation. The main objectives of the law are to improve protection of health at work, to provide legal guarantees against dismissal of pregnant women, and to establish a legal situation that allows maternity leave to be transferred to the father, in order to facilitate a greater sharing of domestic and family work between men and women.

The Foreign Persons Law was passed on 23 December 23 1999. This legislation is a revision of the existing law of 1985 and resulted from the pressures of associations of immigrants, trade unions and left-wing parties. The main changes introduced by this legislation include the granting of fundamental rights to immigrants to protect them against serious inequalities, and the introduction of a provision under which residence is used as the fundamental criterion, instead of possession of a work permit. It is hoped that this law will help to change the Spanish public's perception of immigrants, from "workers who are passing through" to citizens who may settle permanently in Spain (ES9911262F). However, the future of this law is uncertain because the governing PP party did not approve all of its provisions and has threatened to change it if it wins the next elections.

There were two "popular legislative initiatives" (Iniciativas Legislativas Populares, ILP) - a procedure provided for under the Spanish Constitution that allows ordinary citizens to present proposals directly to parliament if they are endorsed by a certain number of signatures - in 1999 that were especially interesting in industrial relations terms. The first aims to regulate and reorganise subcontracting in the construction sector, but has not yet been put before parliament; and the second aimed to introduce a 35-hour working week, but was not even accepted for parliamentary processing (ES9912266N).

The organisation and role of the social partners

There were no important changes in the organisation and role of the social partners during 1999. The latest round of union elections of company-level employee representatives (ES9902298F) ended in 1999 and may produce small changes. However, official figures are not yet available.

The social partners were active during 1999 in a variety of social policy areas. Pensions and unemployment benefits (ES9909248F and ES9910158F) were a topic very much in evidence in top-level industrial relations debates, although at the moment it is fair to say that there is more disagreement than consensus.

Industrial action

1999 saw a reduction in the overall number of strikes, in comparison with 1998, but an increase in the total number of participants and a tendency for strikes to become more intense and localised. The total number of strikes to August 1999 was 521, compared with 618 in the same period in 1998. Days lost due to industrial action totalled 1,036,200 to August 1999, compared with 1,263,500 in 1998. The number of participants in strikes rose to 833,800 to August 1999, compared with 671,900 in 1998.

The most conflictual sectors, based on data to August 1999, were transport, coal mining and construction, with the probable addition of metalworking (shipbuilding), whereas in 1998 the main conflicts took place in agriculture, construction and metalworking.

The hardest-fought strikes were without doubt those which took place in the shipyards (ES9912268F) and those in public and private coal mines (ES9906235N and ES9911263F). Trade union demands in these cases focused on the maintenance of subsidies and employment, an effective policy of economic diversification in the affected territories, and greater control of private companies. There is a long tradition of industrial dispute in these sectors, and workers resorted to many forms of direct action in response to what they perceived as uncompromising attitudes, infringements and failure to meet commitments on the part of the companies and the authorities. In addition to the usual mobilisations (such as demonstrations in the affected regions and in the Spanish capital and traffic blockades), which caused many confrontations with the police, trade unions held a 65-day sit-in in a pit 300 metres below ground (in the dispute at MSP) (ES0001269N), and a 400-kilometre march lasting 20 days (in the Encasur dispute) (ES9903202N).

At regional level, a general strike in the Basque Country was called by the regional trade unions, Basque Workers' Solidarity (Eusko Langileen Alkartasuna/Solidaridad de Trabajadores Vascos, ELA/STV) and Patriotic Workers' Commissions (Langile Abertzale Batzordeak, LAB), and later joined by CC.OO and UGT; the aim was to demand the 35-hour week and to press employers' associations to negotiate shorter working hours (ES9905129N).

More generally, when resolving conflicts, there has been a recent trend towards greater autonomy for the parties to industrial disputes (ES9909151F).

National Action Plan (NAP) for employment

The 1999 Spanish National Action Plan (NAP) for employment was drawn up and approved in just two months - between March and April 1999. The trade unions and employers' associations were called to only one meeting, one month before its approval. CC.OO and UGT therefore claimed that the Spanish government had failed to fulfil the resolutions of the December 1998 Vienna European Council meeting (EU9812141N) by not respecting the obligatory participation of the social partners.

The Plan was rejected by the trade unions, not only due to its late approval and its unilateral nature, but also because of: the small budgetary allocation; the perceived bureaucratic way in which it had been drawn up; the lack of measures linking training to employment; and the fact that, in their view, it placed the onus of solving unemployment on unemployed people by promoting training and guidance, instead of creating employment through measures aimed at productive structure and working time reduction (ES9907239F).

The impact of EMU on collective bargaining and industrial relations

The potential effect of EMU on industrial relations and collective bargaining was an issue which occupied the Spanish trade unions during 1999. In the general area of "Europeanisation" of bargaining, UGT and CC.OO made public their position on bargaining at European level through a joint proposal to the Helsinki European Trade Union Confederation (ETUC) congress in June-July 1999 (EU9907182F). The Spanish unions proposed a reform of the ETUC statutes in order to give the confederation more means to direct and coordinate national union policy, and the capacity to negotiate wages and working conditions at European level.

However, on the employers' side, CEOE openly states that it considers the formulation of an EU policy in labour matters to be an error. This organisation has shown itself to be particularly opposed to proposals for collective bargaining at European level, in spite of being tolerant of the constitution of European Works Councils (EWC s).

Employee representation

There were few new developments in this area in 1999. Spanish trade unions support the existing EWCs in companies operating in Spain and are promoting the constitution of new EWCs. So far, only one EWC has been set up in a Spanish company, that at Grupo Repsol. In addition, the new world-wide works council at Volkswagen (DE9806271N) held its first meeting in Barcelona in May 1999 - this the first information and consultation structure at this level in which Spanish unions have participated actively.

New forms of work

In comparison with 1998, the number of permanent contracts increased by 7% and temporary contracts by 5.9% in 1999. Full-time contracts increased by 4.5% and part-time contracts by 8.1% (the latter represent 8.5% of the total number of contracts). However, temporary employment as a proportion of total employment fell by 0.28 percentage points only, to 32.72%, and was characterised by a high level of turnover: contracts with a duration of less than one month represent 63% of temporary contracts, according to trade union sources. The abusive use of temporary recruitment and the exploitation of temporary workers (all analyses indicate that wages for temporary workers are falling and their working conditions are deteriorating) are claimed to be fostering divisions Spanish society (ES9907238F).

There are still a number of clauses in collective agreements limiting the use of temporary employment agencies, establishing the jobs that can be covered by temporary contracts or setting the maximum duration of temporary contracts for market circumstances. These types of clauses were found in 7% of agreements, affecting between 14% and 32% of workers. There were even fewer clauses setting a ceiling for the proportion of temporary contracts among the workforce, found in 1.8% of agreements affecting 2.52% of workers.

As discussed above (under "Legislative developments"), 1999 saw major new legislation bringing the wages of temporary agency workers into line with those of user companies

Outlook

It does not seem that 2000 will hold great changes in store for Spanish industrial relations. The trade unions have put forward proposals to reduce working time, including the reduction of both normal working hours and overtime, to avoid inequality due to type of contract or time of recruitment, and to control subcontracting. However, it is very difficult to implement these proposals within the framework of collective bargaining because they meet with the opposition of employers and employers' organisations. In top-level intersectoral bargaining, new agreements or legislative reforms in these areas seem unlikely, although the trade unions are willing to make commitments with the government — with or without the employers' associations — on health and safety, economic penalisation of temporary employment and subcontracting.

As has been habitual in the past few years, the employers' organisations will probably continue to press for a general reduction in employers' social security contributions. The renewal of the 1995 "Toledo Pact" on social security after the general elections in March 2000 will probably dominate the intersectoral scenario. The debate will focus on aspects such as the separation of sources of social security income, retirement pensions and the extension of subsidies and unemployment cover, the latter being of special concern to the unions (the rate of cover of the unemployment insurance system fell from 67% in 1993 to 50% in 1999: 786,000 unemployed people are not covered, even though there is a large surplus income from contributions). There is likely to be a dispute over the renewal of the Pact because of the great differences in the positions of the social partners on cohesion and social welfare, so it does not appear at this stage that 2000 will bring a tripartite agreement.