Trade unions criticise liberalisation of telecommunications sector

Download article in original language : ES9901294FES.DOC

The liberalisation of the telecommunications sector began in Spain in 1996, and is in its final stages in early 1999. Over this period, the trade unions have opposed the liberalisation programme on the grounds of its effects on both employees and consumers. In late 1998 and early 1999, the opposition has taken the form of demonstrations and planned industrial action.

The liberalisation of the Spanish telecommunications sector is currently in its final stages - competition for fixed telephone lines began officially on 1 December 1998. Since the process began in 1996, the trade unions have expressed their opposition to the liberalisation programme from the viewpoint of both workers and consumers.

Liberalisation of telephone services

In Spain, unlike in other European countries, liberalisation of telecommunications has involved the total privatisation of the sector and of the public company, Telefónica. The Spanish government does not have a sufficient shareholding in the telecommunications sector to be able to control its development, and so it has now passed totally into private hands. This process was criticised by the trade unions (ES9703108N), which feared the exclusive use of business criteria in the growth of the sector, a situation favoured by the lack of a regulatory framework at that time. This lack has now been filled by means of a law, but the unions feel that in both the law and the regulations that flesh it out the concept of a universal quality public service is very vague and may become obsolete in a short time.

Indeed, though telecommunications are a strictly essential service and their infrastructure has been subsidised by means of public money, the government plays no mediating role to guarantee quality of service, universality and reasonable cost. Discriminatory policies are, say the unions, applied by regions and types of client, leading to an unequal impact of competitive pressures: stress is placed on developing the most profitable parts of the business, benefiting areas of greatest population density and customers with greatest purchasing power. All the operators, including Telefónica, follow a policy of concentrating activity and investments in the large capitals, and offer lower rates and a wider range of products to companies, which are the only customers that are benefiting from liberalisation, claim the unions. In fact, the price of the service used by most Spaniards (local calls) is rising rather than falling. The metropolitan rate has increased and it is feared that this tendency will continue.

The trade unions have criticised the trading policies of the various private operators, which allegedly ignore the public interest in favour of financial profit, and the failure of governments to oppose this situation.

Effects of liberalisation on employment

Up until the time of liberalisation, the telecommunications sector had been a monopoly belonging to Telefónica, a public company that had its own collective agreement (providing for very good employment conditions, owing to high profitability and strong unions). The unions are now accusing the government of ignoring the labour aspects of liberalisation.

In particular the liberalisation process has, it is claimed, been carried out without regard for the fact that the labour market for the telecommunications sector is not regulated, since there is no sectoral collective agreement or specific health and safety regulations to cover it. In other words, the new operators are free to apply minimum contractual and working conditions. Following successive reforms carried out under governmental neo-liberal labour policy, the legal framework - claim the unions - does not ensure decent conditions of life, and working conditions are certainly very far removed from those existing in Telefónica, which is among the companies with the best labour conditions in Spain. The unions maintain that this situation leads to "social dumping" (through labour costs), which is now spreading across the sector.

In the same way, Telefónica has allegedly introduced a strategy of segregation, creation of subsidiaries and outsourcing of activities, because of the lower labour cost of using workers not protected by the Telefónica agreement. An example is the case of a company with 1,800 workers of whom only 12 have a permanent contract. It has entered into 18,000 employment contracts in only two years and pays 30% of the wage of a worker at Telefónica to carry out the same task. Training or promotion are non-existent. Likewise, Telefónica is restructuring the workforce through retirement, early retirement and redundancy, which up to now have been voluntary and universal. From 1999, the company wishes to introduce these policies into departments and regions where it considers there to be excess labour, and poorer terms and conditions are being proposed. In three years, the workforce at Telefónica has fallen from 72,207 to 54,000 and for the year 2001 the target is 44,000. Also, even at Telefónica, some historical examples of "best practice" in working conditions are being lost: the split shift is being introduced, the number of shifts at unsocial times is increasing and mandatory geographical mobility is being imposed - within the current regulatory framework.

Indeed, following the privatisation of Telefónica and the entrance of new operators into telecommunications, there is an increasing trend towards insecure labour conditions, a situation that the trade unions feel is inadmissible in a sector with good prospects of growth and healthy profits.

Protests

During the course of liberalising the telecommunications sector, the demands of the unions have been based on two objectives: fair and secure employment and a public, universal quality service, both in Telefónica and in the other companies in the sector. To attain both goals, as workers and consumers, the unions are using all the strategies within their reach: if negotiations fail then they use both the legal system and social pressure inside and outside companies.

After a period of certain differences amongst the trade unions and even amongst different factions within each union, it seems that at the present time unity of action is once again prevalent. The five majority unions (CC.OO, UGT, SATT, UTS, CGT) have prepared a schedule of combined protest action from early 1999 until Easter that include demonstrations, strikes in Telefónica and meetings with the government to ask it to accept responsibility for the effects of liberalisation on the telephone service and on employment.

Since October 1998, there has been unanimity in the demands that the majority trade unions have made to Telefónica. In response to the policy of outsourcing and redundancies, the unions are demanding a detailed company plan stating the activities that Telefónica wishes to carry out and the necessary workforce broken down by towns and categories. The trade unions argue that redundancy no longer responds to a structural need generated by technological innovation and the loss of market share, but rather to the desire to guarantee greater profits and lower labour costs.

Moreover, in response to management policies at both Telefónica and other companies in the sector, several complaints have been submitted to the Labour Inspectorate. This has resulted in fines and sanctions, and several appeals against unfair dismissals have been won. At the same time a sector-level agreement is being negotiated, but without much success. Not all the unions agree on the same line, and the employers' organisation and management of the most important operators are not involved. The government has also failed to offer its support as an active mediator.

Consumer organisations have also offered support and issued joint manifestos with the trade unions in defence of a universal telephone service.

Demonstrations were held throughout Spain in November and December 1998 with a massive turnout by workers. At the time of writing, a general strike was being organised at all Telefónica centres in Spain and Latin America for 14 January 1999.

Commentary

The Spanish government has liberalised the telecommunications sector without making an effective commitment to the quality or nature of public service or employment. The market - that most favours the most powerful sectors of society - is the government's solution for the development of one of the sectors with the greatest strategic value in present-day society, offering a service that is obviously essential for all citizens.

With regard to employment, the unions have a difficult role to play. The telecommunications sector illustrates some of the challenges facing the trade unions in Spain today. Telefónica workers are the "labour aristocracy" of the sector, who may have interests that could harm other workers at different stages of the liberalisation process. At the moment this situation has been taken into account by the trade unions, but the worst is yet to come. Insecure employment is found not in Telefónica but in the outsourced companies. The unions have paid attention to the conditions of these new workers, intervening to achieve improvements and to deal with the fragmentation that will characterise working conditions in this sector. In this context, trade union action requires a great deal of solidarity and ideological conviction. Some argue that it should be the task of those who have better working conditions to fight for a sectoral agreement and then for its implementation. (Clara LLorens, QUIT-UAB)