Pact for employment signed in Balearic Islands

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A four-year tripartite pact for employment was signed in Spain's Balearic Islands region in January 2000. The pact has certain characteristics that differentiate it from those that were signed in several other regions in 1998 and 1999, and that give it a greater chance of success. Notably, the provisions on the reduction of working time are stronger than those in most other regional employment pacts.

On 12 January 2000, a four-year tripartite pact for employment was signed in the Balearic Islands region, which has been governed by a left-wing coalition for several months. The pact was signed by the regional government, organisations representing employers and small and medium-sized companies and the CC.OO and UGT trade union confederations. The initiative is the latest in a number of such regional pacts concluded in Spain over 1998 and 1999 (ES9811188F).

Main points of the pact

The Balearic economy is dominated by the service sector (representing 83.6% of business activity), and mainly tourism, which means that there is a high degree of unstable employment. The reasons for this are the instability of the companies involved – among which there is a high turnover – and the seasonal nature of the work. The new pact approaches this situation through three plans:

• a plan for employment and vocational integration, aimed at job creation and more stable employment;

• a plan for the development of the productive economy, aimed at consolidating new companies in new areas of activity; and

• a plan for improving the public system of social protection against "social precariousness".

Employment and integration plan

The measures proposed by this plan include reinforcing traditional forms of action, and introducing new forms of action which may offer better prospects of success. There are thus measures aimed at job creation, with incentives for recruitment (as found in other regional pacts), to which other incentives will be added at a regional level (although they remain to be specified in the course of 2000), and for recruitment instead of overtime working, and employment contracts for home workers.

The plan's section on working hours proposes a 35-hour working week for the public administration and its companies - for the first time in a regional employment pact, this measure has the consent of the employers' associations. With regard to the private sector, the social partners have agreed to start negotiations to reduce working hours. If no agreements are reached, the regional government will introduce incentives for companies that reduce working hours. None of the previous regional employment agreements, except that in Catalonia (ES9805154F), had gone so far (ES9902297F).

An area of great significance is that of "new sources of employment". The pact stresses their importance, and the need to thoroughly study them and to provide financial support at a local level, particularly for services that are not covered by the market. This is linked clearly with local development, to which great importance is given.

Another key area is the training of workers. It is desired to make progress in the integration of the vocational training subsystems: vocational education, occupational training and continuing training. The aim is to create a close link between training and employment to strengthen the chances of integration into work.

The pact pays special attention to the development of the "social economy", for which it proposes economic support. Great importance is also given to the fight against the clandestine, underground economy. The agreement also creates a multidisciplinary "employment observatory" to give scientific and technical support to all the measures.

Promotion of the productive structure

The pact is in favour of diversified production, in particular in activities that are complementary to tourism. It gives particular importance to transport and infrastructures, housing, the preservation of the environment, alternative energy sources and recycling waste. In this respect, a series of preliminary recommendations are made, and many ideas put forward. However, no specific tangible agreements have been reached.

Improving social protection

It has been agreed to establish within six months a plan to improve the public system of social protection, that covers matters such as the minimum integration income, a network of basic social services and improvements in public education.

Following up the pact

The pact involves the establishment of a number of new Balearic institutions. It creates an Economic, Ecological and Social Council (Consejo Económico, Ecológico y Social) and proposes the creation of a Balearic Employment Service (Servicio Balear de Ocupación) and a Balearic Vocational Training Council (Consejo Balear de Formación Profesional). However, the most important feature is perhaps the creation of a "follow-up commission" (Comisión de Seguimiento) that has the essential function of approving an annual programme of action for the pact in connection with the yearly regional budgets. In other words, the pact is not fixed for four years but can be adjusted through bargaining each year.

The position of the social partners

The employers' associations, the trade unions and the Balearic government have expressed their satisfaction with the pact. However, there were differences of opinion during the negotiations and after the signing of the deal, which must be taken into account in assessing the possible effectiveness of the agreement.

Though they signed the Pact, the employers' associations are opposed to the general introduction of a 35-hour week in the private sector. They believe that this is one possibility within a wider framework of negotiation that must deal with the duration and organisation of working hours in order to achieve greater flexibility. They propose that this flexibility must be based on the year rather than the week, so that at certain times of the year working hours can be longer and at other times shorter.

For the trade unions, the 35-hour week is one of the pact's main objectives, because it has great potential for creating jobs and improving employment. They would prefer this to be achieved through a general agreement between the trade unions and employers' associations rather than through regulation by the regional government. CC.OO states that shorter working hours will be the main demand in the forthcoming negotiations over the regional retail sector collective agreement. UGT states that the 35-hour week should be only a first step towards further reductions in working time. Both trade union confederations claim that the pact is a great step forward in a region in which nothing had previously been done in relation to the employment crisis. Both are also aware that some questions, such as the 35-hour week in the private sector, will continue to be problematic.

The regional Ministry of Labour, which conducted most of the negotiations on behalf of the regional government, is held by the United Left Party (Izquierda Unida, IU). The Minister, who was a trade union official at CC.OO until his appointment, has stated that the first problems to be faced are overtime and the clandestine economy. With regard to the former, economic incentives will be offered to companies that transform overtime into new jobs, and with regard to the latter, the Minister wishes to regularise homeworking. He wishes to provide economic support to companies, but with greater control than in the past. For example, subsidies will be paid in stages to prevent companies from folding after they have received them, and training paid for by the government will be linked to a labour market integration plan. Great importance is also given to fighting discrimination against women in employment, through positive discrimination. The Balearic government seems to have given prime importance to the fulfilment of the pact.

Commentary

The new pact is an important step for the future of the economy and employment in the Balearic Islands, where the debate is between the need for continuing economic growth and the danger of environmental destruction that will be detrimental to the region's main activity, tourism. It has highlighted the great concern about the need to diversify the economy and about environmental preservation.

The three sections of the pact have set very ambitious objectives and measures, compared with those of other regional employment agreements. The most important of these is perhaps the reduction in working hours. The main virtues of the Balearic plan are the facts that the government is willing to be the driving force of the changes that the pact considers necessary, and that the pact can be monitored and controlled through the follow-up commission and through the various institutions it sets up.

However, there is still a risk that the pact will be ineffective. Many of the measures proposed or supported need investment that must be negotiated each year; this will depend sometimes on the regional government and sometimes on the central government. There are also doubts about the willingness to reach agreements on specific measures; a clear example of this is the question of working time, which became a subject of dispute on the day following the signing of the agreement. Several necessary tripartite institutions have yet to be created and developed in the forthcoming period.

In summary, this agreement is a promising step forward, but its effectiveness will depend at all times on the willingness of the parties to cooperate (Fausto Miguélez. QUIT).