Major restructuring plan at Telefónica in Spain

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Some of the unions at the Spanish telecommunications company, Telefónica, have called demonstrations in protest against the company's restructuring plan, though it received the support of CCOO and UTS. There appears to be a crisis in the unity of action between CCOO and UGT.

Telefónica has approved a restructuring plan to cut 9,979 jobs, involving 14.4% of its workforce in 1998. Since 1996 the new management team at the telephone company has attempted to implement a major restructuring policy that envisages some 20,000 redundancies by the year 2000. The company now has 62,599 employees. The redundancies will be made through early retirement at the age of 55. The workers concerned will receive 75% of their wages until the age of 57 and then 85% of their wages plus a supplement corresponding to their contributions to the company's pension fund. Another way of cutting staff will be through "special leave of absence" at the age of 53. In this case the workers will receive 65% of their wages until the age of 60 and then 70% of their wages. The approved measures also include the possibility of transfer to another company within the Telefónica Group. Those who choose this possibility will receive compensation amounting to 35 days' pay per year worked and may also request leave of absence of between three and five years, at the end of which they may ask to be readmitted to Telefónica.

The workers recently held a demonstration in protest against the restructuring plan. The demonstration was called by the UGT, CGT and SATT trade unions, without the support of CCOO, whose votes were decisive on the multi-centre committee in approving the redundancy plan proposed by management. The voting was very tightly contested, and adoption was approved with only one vote to spare. The company's proposal was supported by four votes from CCOO and three votes from UTS, but was rejected by four votes from UGT, one vote from CGT and one from SATT. UGT also claims that the restructuring plan will reduce labour costs by only ESP 100,000 million but will involve a total cost of ESP 300,000 million. Nevertheless, the aim of the company is to enter the 21st century with a workforce of 50,000 and to implement a modernisation plan and strategic alliances in an increasingly competitive market. CCOO justifies its acceptance of the plan on the grounds that the programme of retirements is completely voluntary and in line with previous agreements obtained through collective bargaining.

The strategic discrepancies between the majority trade unions, CCOO and UGT, have been growing over recent months and appear particularly in the agreements and pacts in large companies such as Teléfonica andBimbo, or in sectors such as the saving banks and the postal service. This is perhaps one of the most important disputes in the relationship between CCOO and UGT over the last ten years. It may also be fuelled by the proximity of the trade union elections, which leads each union to differentiate and radicalise its position.

UGT has warned that the approved redundancy plan will serve to conceal a policy of job destruction, and regrets the lack of unity amongst the trade unions. The unions calling demonstrations also reject measures proposed by the management to protect the board of directors. This will consist in tightening the requirements for sitting on the board. It will be necessary to maintain a minimum number of shares for the three years prior to election to the board. It is also intended to limit access to the positions of chairman, vice-chairman and managing director, for which it will be necessary to have been a member of the board for the three years prior to appointment to the post. The trade unions reject these measures because they seek only to perpetuate the incumbent directors of the company.

QUIT, UAB