2000 Annual Review for Spain

This record reviews 2000's main developments in industrial relations in Spain.

Political developments

2000 was marked by the overwhelming victory of the centre-right People's Party (Partido Popular, PP) in the general elections held in March. After having governed previously as minority government with the support of the conservative nationalist parties from Catalonia and the Basque Country, PP obtained an large absolute majority that will allow it to govern until 2004 without having to rely on other parties.

Collective bargaining

There were no major changes in the structure and content of collective bargaining in 2000, but previous tendencies were consolidated and some new developments may gain increasing importance in future.

Just over 4,000 agreements, covering some 8 million employees were negotiated or revised in 2000, compared with over 5,000 agreements, covering almost 9 million employees in 1999. The decrease in the number of agreements could simply be seen as an indication of less fragmentation in collective bargaining if it were not for the fall in the number of workers covered by agreements: according to provisional data from the Ministry of Labour and Social Affairs, between 1999 and 2000 the percentage of employees covered by collective agreements fell from 82% to 70%, while the proportion of employees covered by sectoral agreements fell by nine percentage points and the number of workers covered by company agreements by 16 points.

It remains to be seen whether the decrease in the level of bargaining coverage in 2000 marks the beginning of a new trend (it may be due to provisional or irregular gathering and processing of the statistics - the low reliability of these data is a generally recognised problem). However, it seems clear that although collective bargaining is becoming more centralised at sector level, non-formalised bargaining (company agreements that do not have the status of collective agreements) is also expanding and the focus of industrial relations is shifting to the company level. There was also an increase in 2000 in the number of companies and workers who were not represented in collective bargaining because they do not fit into the sectoral and occupational structure of traditional bargaining, or because the level of worker organisation is weak or non-existent (ES0006193F and ES0009208N). Nevertheless, in 2000 agreements were also signed that governed new activities and occupations, such as an agreement fro audio-visual technicians (ES0010115N).

In mid-2000, the social dialogue between the government, trade unions and employers' associations was renewed (ES0006194F) with the dual goal of negotiating a new labour reform (ES0004180N) and a reform of the social security system (pensions and other benefits). The government asked the trade unions and employers' associations to follow the pattern of the April 1997 intersectoral agreements (ES9706211F), whereby the social partners reached pacts that were later supported by government legislation. In the reform of the social security system, the government sought to obtain the widest possible consensus of the social partners before initiating parliamentary debate (ES0007100F). However, the overall negotiations continued with an increasing distance between the social partners, and no agreement was reached by the end of the year (ES0011219N and ES0012226F).

Pay

Bargaining on pay was less conflictual in 2000 than was initially foreseen: wage moderation continued to prevail, but the number of clauses negotiated on wage revisions due to the increase in inflation (ES0001170N) continued to grow (ES0006193F). The provisional figures that are available show that in 2000 there was a further loss of purchasing power: in 1999 the average agreed wage increase was 2.4% (2.7% including wage revision clauses) and real inflation was 2.9% (the accumulated inflation rate); in 2000, the agreed wage increase was 3% (3.6% with wage revision clauses) and real inflation was 4%. Furthermore, in 2000 the purchasing power of the national minimum wage (salario mínimo interprofesional, SMI) continued to fall sharply, thus increasing the distance between workers in precarious employment and the rest of the workforce. The SMI was increased by 2% in 2000, which was equivalent to the inflation forecasts (ES0009107N). The SMI is less than 45% of the average net wage and is therefore thought to be the lowest minimum wage in the EU.

Changes in the structure of pay which had emerged in previous years were more prevalent during 2000: variable wage supplements linked to individual or group performance were extended and diversified, and other wage supplements, especially seniority bonuses, were discontinued (ES0001170N).

Although conclusive data are not available, it seems that tensions and disputes with regard to pay are increasingly related to these structural changes rather than the annual increase in the fixed wage. One reason for this is that the changes involve an increase in the power of employers and give greater importance to individual agreements between companies and workers. An extreme and somewhat paradoxical example is the programme of stock options for executives at the Telefónica telecommunications group, which led to significant political and social controversy in 2000 (ES0004185F). The stock options were widely seen as over-generous, particularly in a recently privatised company which has suffered major redundancies and which has a high proportion of temporary employees and outsourced activities. There was also a perceived lack of transparency in the offer of stock options, and their effectiveness in terms of managerial performance was seen as doubtful. However, the problem was resolved internally through an agreement between management and trade unions on a far more modest programme of stock options for all permanent employees.

Working time

Collective bargaining on working time in 2000 was characterised by a very moderate reduction in working hours and a significant increase in flexibility. The average number of agreed working hours fell from 1,765.3 hours per year in 1999 to 1,764.3 in 2000: this was a small but quite widespread reduction (30% of the agreements reached during the first half of the year reduced working hours - ES0009208N). This reduction was in general not linked to job creation and did not involve a significant reduction in overtime. The 35-hour week was introduced in a minority of organisations, mainly in the public administration and public services (ES0007198N), although the first sectoral collective agreement establishing the 35-hour was signed in 2000 for automobile repair shops sector in the region of Asturias (ES0008102F).

Greater flexibility in the organisation of working time was introduced in various ways. In some cases, collective agreements established reasons for varying working hours and limits on the availability of workers and more trade union participation. In the majority of cases, however, the discretionary powers of employers were increased with or without compensation in other areas. There are no reliable quantitative data on flexible working hours because this subject is mostly channelled through company agreements. However, it is widely accepted that in certain types of companies and sectors there is an increasing distance between agreed working hours and actual working hours.

Job security

The main development in the area of job security in 2000 was the negotiation, mainly in company agreements, of clauses on maintaining employment, converting temporary jobs into open-ended posts, limiting temporary recruitment and regulating the operation of temporary employment agencies (ES0005189F). This phenomenon does not affect the more problematic sectors and companies and does not have a very significant impact on Spain's high temporary employment rate. According to the EPA labour force survey (second quarter of each year), temporary employment has fallen only slightly: at the time of the 1997 labour reform (which sought to promote employment stability), the rate of temporary employment was 33.6% of the active population; in 1999 it was 32.7%, and in 2000 it was 32.1%. In 2000, there were promising agreements on employment at both sectoral and regional level. An agreement in the textiles sector introduced significant improvements to the quality of employment and the participation of workers' representatives (ES0005190F), while the Balearic Islands pact for employment introduced measures that favour shorter working hours, social cohesion and productivity (ES0003279F).

Training and skills development

There were no significant changes in the area of training and skills development during 2000 in collective bargaining at sectoral or company level. However, the year saw the negotiation by employers' associations and trade unions of the third National Agreement on Continuing Training, which was signed in December and introduced changes in the administration and funding of continuing training (ES0101130F). This agreement abolishes the Foundation for Continuing Training (Fundación para la Formación Continua, FORCEM), the bipartite foundation that had previously negotiated continuing training, replacing it with a tripartite foundation in which the public administration will participate.

Legislative developments

The reform and "counter-reform" of the Law on Foreign Persons (Ley de Extranjería) was a legislative event with a great political and social impact in 2000. In February, a new version of this law came into force (ES0004183F). Its aim was to put an end to 15 years of restrictive immigration policy and to introduce a more integrating policy that gives non-EU immigrants rights – and not only obligations – and provide a solution to illegal immigration. Under the previous regulations there were no options: illegal immigrants were either expelled or simply ignored. The new law prevented the automatic expulsion of illegal immigrants, gave them certain political and social rights and began a special process to legalise the position of many immigrant workers.

The law was passed with less political and social consensus than had been expected, and there were serious doubts about its development through subsequent regulations and its administrative application. Before winning the elections in March 2000, the People's Party (PP) announced its intention to reform the law because it was excessively permissive to illegal immigrants. It was thus unsurprising that the special process of legalisation was less generous than had been expected (according to provisional data from the Ministry of Interior, the number of applications was lower than expected – about 250,000 – and 40% were refused). Meanwhile, PP fulfilled its electoral promise and at the end of year introduced its "counter-reform" of the law, reintroducing expulsion for illegal immigrants, extending the minimum period of illegal stay in Spain that entitles immigrants to apply for legalisation, and eliminating some of the rights established by the short-lived law of February 2000 (ES0012224N).

Amid the heated political debate over immigration and legislative changes, other events of importance were race riots in some towns with a large number of legal immigrants, such as El Ejido (ES0004184F) and major public protests in which organisations of immigrants, and in particular those "without documents" (sin papeles) and "without a voice" (sin voz), played a leading role.

On other issues, 2000 saw the adoption of a set of measures intended by the government to foster competition in order to stimulate economic growth without increasing inflation. This included a liberalisation of shop opening hours (ES0007201F) and a reform of sick leave (ES0007100F), both of which caused controversy.

The organisation and role of the social partners

2000 brought some change to the organisation and the role of the social partners in Spain. The most important institutional event was the seventh congress of the Trade Union Confederation of Workers' Commissions (Comisiones Obreras, CC.OO) in April, which in general confirmed the strategy that this union confederation has followed since 1996, albeit with the dissent of a minority of about 30% (ES0005286F). It remains to be seen whether after this congress CC.OO will be able to define a strategy that enjoys greater internal support and to resolve the differences among its different sections.

On the employers' side, there were some organisational changes in 2000, such as a reorganisation of employers' representation in Catalonia.

However, the most significant changes were in other areas, notably the issue of the unionisation of self-employed workers, which CC.OO and the General Workers' Confederation (Unión General de Trabajadores, UGT) supported in 2000. This is still an incipient tendency, but it is a first step towards the organisation of an expanding group of workers, who are highly diversified and suffering from a loss of influence in terms of professional status and individual bargaining capacity (ES0002277F). Another important development in 2000 was the establishment of new forms of worker representation to monitor the correct administration and application of agreements at the workplace. Such new structures were included in the agreements in the textiles sector (ES0005190F) and the temporary employment agency work sector (ES0009111F) and other smaller agreements. The aim is to overcome the weakness or non-existence of traditional workers' representatives in many companies.

Industrial action

2000 was characterised by a considerable increase in industrial disputes. After a number of years of relatively peaceful industrial relations, the slight increase in industrial disputes in 1999 (ES0009209F) was followed by a more significant increase in 2000. There were 666 strikes in January-November 1999, involving 1,053,400 workers and the loss of 1,379,300 working hours. During the same period of 2000, there were 580 strikes, involving 1,475,800 workers and the loss of 2,677,100 working hours. The 2000 figures do not include the 24-hour general strike held by civil servants in December 2000 (ES0101228N).

Arguably the most significant strikes were: in the construction sector in protest against industrial accidents, precarious employment and subcontracting (ES0004282F); in retail against the liberalisation of opening hours (ES0007201F); and in the civil service in protest at the continuous loss of purchasing power (ES0010214N). However, as in previous years, although there were fewer disputes at company level than in the 1980s, strikes tended to last longer and were more difficult to solve: examples were the strikes at the MSP coal mines (ES0001269N), the RENFE national railways (ES0007199N), the Tudor motor components company (ES0002278F) the Moulinex electrical appliances firm (ES0009210F) and the Sintel telephone installation concern (ES0011120N).

National Action Plan (NAP) on employment

The process of social partner consultation in the drawing up of the Spanish 2000 NAP followed the same format as in previous years. The government places great value on the participation of the social partners. The employers' associations were relatively satisfied with the content of the NAP, while the trade unions were critical both of the Plan and of the formal nature of the consultation. Nevertheless, 2000 was the first year in which the assessments of the social partners were included in the Plan.

Equal opportunities and diversity issues

After the approval in 1999 of the new Law on Combining Family Life and Work (ES9911165F) in 2000, there were no major developments in the area of equal opportunities, although the social inequalities between men and women are still thought to be significant. In late 2000, a small business group, the Circle of Employers (Círculo de Empresarios), was forced to make a public apology for suggesting that employed women pay the employers' maternity leave costs (ES0101129F). It had proposed that a proportion of women's monthly pay should be paid into an insurance policy that would cover the wages and contributions that companies pay to women on maternity leave. If the woman has had no children by the age of approximately 56, these contributions would be returned to them with the corresponding interest. Though the proposal was widely condemned as being unconstitutional and inapplicable, as well as socially and economically irrational, it showed how the debate on gender discrimination in the Spanish labour market still focuses on maternity leave.

A study conducted by the Fundación Argentaria and published in early 2000 confirmed that women are paid less than men for equal work, and that temporary workers are paid less than those on open-ended employment contracts (ES0004281N). It found that the average monthly wages of a male worker on an open-ended contract in 1999 were ESP 287,423 gross (including average overtime pay), compared with ESP 161,923 for all temporary workers, and ESP 211,981 for women on open-ended contracts. Comparing men's and women's pay, eliminating differentials accounted for by contract type, seniority or responsibility was found to leave a 12.5% gap that is explained solely by gender.

As stated above (see under "Legislative developments"), immigration was a major subject of political debate, legislative initiative and social mobilisation in 2000.

Information and consultation of employees

The draft EU Directive on the worker involvement in the European Company Statute was the most important topic of debate in this area in Spain in 2000: the government's refusal until the end of the year to accept some of its clauses was severely criticised by the trade unions.

Another development was the trade unions' demand for recognition of the right to representation, information and consultation at the level of groups of companies, which met with strong opposition from employers. In general, in these and other related topics – European Works Councils and information and consultation on mergers and takeovers – the Spanish social partners have participated regularly in the debate within the European-level employers' organisations and trade unions, and their points of view are reflected in the positions that these organisations have adopted.

New forms of work

The most important development in the area of new forms of work in 2000 was related to temporary work agencies. In 1999, the new law on temporary work came into effect, establishing equal wages for workers supplied by agencies and workers of the user companies. In July 2000, a new national collective agreement covering temporary work agencies was signed, resolving the ambiguity of the legislation: the agreement established full equality of wages, because it defines pay as the wages actually received by the workers of the user company, regardless of whether they are regulated by collective agreements (as defined by law) or by company agreements (ES0009111F).

As noted above, the recruitment of self-employed workers has become a major target for trade unions (see above under "The organisation and role of the social partners")

Other relevant developments

Yet again, the industrial accident rate was a major topic of debate in Spain. Although the accident rate is still high, the government and the social partners are very far from reaching the necessary consensus to make their actions more effective, whether through legislation, administration or collective bargaining. In 2000, there were 1,130 deaths, 11,359 serious accidents and 922,785 minor accidents at work. It is evident that industrial accidents are clearly related to precarious employment (ES0009106N), but a "popular legislative initiative" presented by CC.OO and supported by UGT to regulate subcontracting and reduce accidents, supported by more than 500,000 signatures, was rejected by the centre-right majority in parliament without a debate (ES0012125N).

Outlook

2001 promises to be a year of reforms in areas such as the labour market, pension and social protection systems and collective bargaining. However, the likely degree of consensus on these issues is far from clear.

In the area of labour market reform, from the outset of the current dialogue on the issue the government established its preferred terms and conditions and stated that it was not willing to wait indefinitely for an agreement between the social partners. The point on which the views of the government and the employers' associations coincide is that it is necessary to reduce the cost of the dismissal even further in order to reduce temporary employment (ES0012226F). This is a proposal that is in line with the process that began with the 1997 labour reform. The government approved a package of labour market reform measures in early 2001, against which trade unions are mounting a series of protests.

The government's project of reforming the social security system is based on the aim of ensuring the future viability of public pensions.

Finally, the employers' associations are firmly resolved to try to introduce greater flexibility in collective bargaining. It will certainly not easy to achieve a consensus on these and other proposals with the trade unions, but nor will it be easy for the unions to prevent them.