Pact for employment agreed in Catalonia (1998-2000)

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In May 1998, the regional Government and the main Catalan employers' organisations and trade unions signed the Pact for employment in Catalonia. This is the first employment pact at regional level that has been signed following the November 1997 EU Employment Summit, and the first of its kind ever reached in Catalonia.

On 13 May 1998, after seven months of negotiations, the Generalitat (regional government) of Catalonia, the employers' associations, Foment del Treball Nacional and PIMEC-SEFES, and the CC.OO and UGT trade unions signed the Pact for employment in Catalonia (Pacto por el empleo en Catalunya). This is the first such employment pact that has been signed at regional level following the special Employment Summit European Council meeting held in Luxembourg in November 1997 (EU9711168F), which resulted in EU Employment Guidelines for 1998. It is, furthermore, the first pact of its kind that has ever been reached in Catalonia, an autonomous community with a deep-rooted tradition of self-determination in labour relations, which has had full jurisdiction over employment issues since the beginning of 1998.

Negotiation process

The negotiation process was difficult up until the very end. The Generalitat was interested in reaching an agreement because it wanted to begin its term as the sole administration responsible for employment issues with the backing of the social partners. However, it was reluctant to devote more resources to employment policies - a condition on which the trade unions would not compromise.

The Generalitat and the trade unions also found it difficult to reach an agreement on the structure of employment services in Catalonia. At the beginning of 1998, the responsibility for labour mediation and for the management of active employment policies that had previously belonged to the National Institute of Employment (Instituto Nacional de Empleo, INEM) for the whole of Spain were transferred to the Generalitat (ES9802140F). Only the administration of unemployment benefit remains the responsibility of INEM in Catalonia. Soon after this transfer, the trade unions demanded the setting up of a Catalan public employment service to bring together all activity on employment with the participation of the social partners, while the Generalitat seemed to favour a more decentralised and mixed public/private model along the lines of the existing placement service.

Reductions in working hours were another stumbling block for the negotiation process. One of the main trade union aspirations was to reach an agreement to promote the creation of permanent jobs through a reduction in working hours or the banning of overtime. The Generalitat was willing to support a measure of this type, provided that it was carried out with the consensus of the employers' organisations, which initially had many reservations about it.

Such differing stances prolonged negotiations for more than seven months. There were also disputes between the two employers' associations and the two trade unions, which have not always shared the same priorities throughout. This problem was compounded by disputes amongst the signatory organisations over the ratification of the pact, especially amongst the unions.

Main contents

Training, guidance and work placements

The pact provides for initiatives costing a total of PTA 173 billion. Most of this is devoted to training, guidance and work placements in line with the criteria established at the Luxembourg summit. Around 258,000 unemployed people will benefit from these measures. The pact also devotes resources to regulated vocational training and continuing training.

Low-interest loans for job creation

The pact allocates PTA 27.5 billion in low-interest loans for small and medium-sized enterprises that submit investment plans that generate new jobs. The loans will be negotiated by two autonomous bodies assigned to the Generalitat.

New sources of employment

The pact devotes PTA 1,365 million in 1998 for the professions linked to socially useful services such as the caring services, communications, alternative and renewable energy sources, prevention of industrial risks, tourism and the environment, and recycling. The resources will serve to subsidise a minimum period of contract (between six and nine months) and to promote local employment initiatives, the social economy and self-employment in these areas. In 1998 a White Paper will also be produced on new sources of employment. The Generalitat has agreed to increase its budget in 1999 and 2000 in line with the results obtained, and the conclusions of the White Paper will be revised annually.

Reorganisation and reduction of working time

The pact gives the social partners a period of one month to reach a formal agreement on job creation and working time. Otherwise, the Generalitat will prepare a decree on this topic that it will submit to the Economic and Social Council of Catalonia (Consejo Económico y Social de Cataluña). The decree will promote net creation of both full-time and part-time permanent employment contracts. Companies will adopt its terms on a voluntary basis and the workers' representatives will participate in its application and monitoring. The pact does not specify the resources for funding this measure, but they will be added to the planned PTA 173 billion for training, guidance and work placements.

Public employment service

The pact defines the public employment service of Catalonia as the set of those functions, services and active policies as regards employment, training and mediation that are the responsibility of the Generalitat. The employment service thus includes the Employment Offices (Oficinas de Trabajo) of the Generalitat (the former INEM), the Placement Service, the Business Start-up and Self-Employment Service, and the programmes, training plans and training centres of the Generalitat. Its general principles will be free access, equal opportunities, transparency and participation. In the pact this service does not have its own legal status but a management council will be set up to govern the areas and organisations which comprise it with the participation of the Generalitat, the social partners and local government associations. The organisational structure of the service will be reviewed after two years. Moreover, it will have its own legal status as an autonomous agency or institution if responsibility for unemployment benefit is transferred.

Other aspects

The Catalan Vocational Training Council (Consejo Catalán de Formación Profesional) will be set up as an advisory body with the participation of the social partners for the planning and coordination of the three subsystems of vocational training: regulated, occupational and continuous training. The social partners will participate in the monitoring and control of recruitment. A Catalan labour market observatory will be set up.

Varying assessments

The signatories of the pact have made varying assessments of it. The Generalitat has at all times stressed its positive nature, which expresses the consensus of the Government and the social partners on the most effective policies for fighting unemployment. Foment del Treball Nacional had many reservations until the very end. An example of this is that it even refused to sign the preamble, as it disagreed with the statement: "economic growth is not sufficient to create the number of jobs necessary to reduce unemployment." This organisation was very reluctant to negotiate measures for reorganising or reducing working time with the trade unions, and stated that greater labour flexibility and a reduction in social security contributions were necessary for job creation, an opinion shared by PIMEC-SEFES.

UGT considers the pact positive, but insufficient. In its opinion, the pact should state a job creation target and include measures to support the employment of young people and those aged over 45. Moreover, it considers that the commitment reached on the public employment service is not very effective, because it should have been an autonomous body with its own legal status. CC.OO has adopted a more pragmatic position, stressing the positive aspects of the agreements with regard to working time and the employment service.

Commentary

For the Generalitat the pact involves a firm backing for employment policy in Catalonia, especially in the present context in which the trade unions have overwhelmingly rejected the National Action Plan on employment produced by the Spanish Government (ES9804152F).

The main area that distinguishes the Catalan pact from the state's Action Plan is the agreement on reducing and reorganising working time. Although the agreements reached are very far from the trade union demand for a widespread reduction in working hours, and could be more specific on the funds that will be allocated to this initiative, they do express the commitment of the Catalan Government to progress in this direction.

The pact also deals with an aspect of special importance in Catalonia: the employment service. Up to now there has been little participation by the social partners and local authorities in the structure and monitoring of employment policies, which were partly administered by private companies. The pact confirms the public and participative character of the employment service, an aspect that is very positive even though its exact structure has yet to be defined.

The main deficiencies of the pact lie in the measures that are more directly related to employment. Most of the funding is devoted to training, leaving a very small proportion of the funds for more audacious initiatives with a greater impact on job creation, such as new sources of employment. (María Caprile, Fundación CIREM)