Spain introduces zero-cost replacement contracts for maternity leave

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In Spain, from the beginning of September 1998, the contracts of workers recruited to replace those on leave for maternity, adoption or fostering are exempted from social security contributions. This measure, which eliminates the double cost of these contracts for companies, seeks to promote equality at work for women and has been welcomed by the social partners, though the trade unions are calling for a more ambitious plan of action.

Under the terms of a Royal Decree Law that came into force at the beginning of September 1998, the employment contracts of workers recruited to replace those on leave for purposes of maternity, adoption or fostering are now exempt from social security contributions. Companies in which a person goes on leave for these reasons will now be able to cover the vacancy through an interim contract without having to pay employer's social security contributions, provided that they recruit an unemployed person. The costs will be borne by the National Institute for Employment (Instituto Nacional de Empleo, INEM) as part of its active employment policies, and will be reflected in the 1999 budget.

The government's measure, known as "zero cost" (Coste Cero), eliminates the double social security contribution that had to be borne by companies in these situations: that of the person on leave and that of the person hired to replace her or him. With this measure the government seeks to increase the number of replacement contracts. At present around 150,000 women go on maternity leave each year, but only 8% of them are replaced. The government believes that the new measure will increase the replacement rate up to a level of about 25%. The basic objective is to promote equality at work for women, by guaranteeing the right to maternity leave without this involving an added cost to companies.

The social partners have welcomed the measure. The employers' organisations have stressed the saving that this means for companies, which will lead to more contracts and employment security for women. The trade unions consider it a step forward, although they have asked for replacement to be compulsory in order to extend the impact of this measure on employment. They also believe that the promotion of equality at work for women requires more general action and they demand the complete transposition of the EU Directives on maternity and parental leave.