Government appeals against 35-hour week law in Navarre

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In late June 1999, the Spanish central government lodged an appeal with the Constitutional Court against the Navarre regional government's recent law on the 35-hour working week, because it considers that the tax benefits arising from it are unconstitutional.

On 25 June the Spanish central government decided to lodge an appeal with the Constitutional Court (Tribunal Constitucional) against a law adopted by the regional government of Navarre on the introduction of a 35-hour working week, because it considers that the tax benefits it offers to companies that reduce working hours are unconstitutional. The incentives to reduce working hours were agreed in a law approved by the Navarre parliament in March 1999, in the framework of a "pact for employment" signed by the Navarre government, the Confederation of Employers of Navarre and the UGT and CC.OO trade unions. According to the Spanish Minister of Public Administrations, Ángel Acebes, the national Council of Ministers is questioning not the 35-hour week itself but the tax concessions that will be granted in connection with it - ie a possibility of writing off tangible fixed assets and a 25% tax deduction to stimulate investment in tangible fixed assets.

The debate on shorter working hours is at a deadlock at national level due to the opposition of the main employers' organisation, CEOE. This organisation is completely opposed to any law reducing working time and has also been unwilling to negotiate the question with the trade unions because it considers that the focus of attention should be flexible working hours rather than shorter working hours. However, for over a year regional, county and local pacts have been signed between various public administrations and the social partners. In Navarre, as well as in other autonomous communities - such as Galicia (ES9810184F), Catalonia (ES9805154F) Castilla-León and Andalusia (ES9809282N) - regional pacts for employment have been agreed providing public incentives for companies that create employment by reducing or reorganising working hours. In some cases, the regional employers' associations have not signed the agreement but in others, such as Navarre, they have done so despite the belligerent position of CEOE. At the March 1999 general assembly of CEOE its chair, José María Cuevas, rejected these regional agreements on the grounds that they broke the unity of the labour market in Spain (ES9903210N).

The national government has maintained a position of scepticism, justifying its non-intervention in the subject by stating that the social partners must first reach an agreement. However, it has intervened rapidly to contest some of these regional pacts when they have introduced shorter working hours for civil servants (ES9902297F), because it considers them to be contrary to the Basic Regulatory Law of the Local Government System, which harmonises the working hours of local government workers and of civil servants of the central state administration. This time, the appeal of unconstitutionality against the 35-hour week law approved in Navarre is based on the argument that autonomous governments cannot legally adopt tax incentives for companies that reduce working hours. Navarre, like the Basque Country, has a special tax system - the "statutory system" - which gives it greater tax autonomy. The European Commission recently initiated proceedings against tax incentives offered by the Basque Country and Navarre, aimed at attracting new investment, because they discriminate against companies that are already established. In these cases, the government defended the statutory system, in contrast with its position towards the 35-hour law in Navarre.