2003 Annual Review for Spain

This record reviews 2003's main developments in industrial relations in Spain.

Political developments

The government of the centre-right People’s Party (Partido Popular, PP), elected in March 2000, continued in office with an absolute majority during 2003. General elections were scheduled for 14 March 2004.

In May 2003, local elections were held in the whole of Spain and regional elections were held in all the regions (autonomous communities) except Galicia, Catalonia, Andalusia and the Basque Country. In the local elections, the Socialist Party (Partido Socialista Obrero Español, PSOE) obtained 200,000 votes more than the PP and 650,000 votes more than in it did in 1999, when the PP obtained 38,000 votes more than the PSOE. After the 2003 regional elections, the PP governs Castilla-León, the Canary Islands - with the support of the Canary Islands Coalition (Coalición Canaria) - the Balearic Islands, La Rioja, Murcia, Navarre and Valencia. The PSOE governs Asturias - with the support of the United Left Party (Izquierda Unida, IU) - Cantabria - with the support of the Cantabrian Regionalist Party (Partido Regionalista Cántabro) - Castilla-la Mancha and Extremadura. In Madrid, the regional elections were won by a left-wing alliance of the PSOE and the IU. In Catalonia, regional elections were held in November and were won by a left-wing coalition of the Socialist Party of Catalonia (Partit dels Socialistes de Catalunya, PSC), the Initiative for Catalonia/Green Party (Iniciativa per Catalunya-Verds, ICV) and the Republican Left Party (Esquerra Republicana de Catalunya, ERC)

Other important political events included: demonstrations against the war in Iraq, attended by millions of people nationwide (ES0304203N); protests against the government's handling of the ecological disaster caused by the sinking of the Prestige oil tanker, which left an oil slick off the Galician coast (ES0301101N); and strong opposition to a National Water Plan (Plan Hidrológico Nacional) approved by the government, particularly with regard to the diversion of water from the River Ebro.

Collective bargaining

In the first 10 months of 2003, a total of 4,021 collective agreements were concluded, compared with 3,793 during the same period of 2002 (an increase of around 6%). The number of workers covered by the agreements rose from 7,142,200 to 7,476,700 (up around 5%). Of the total, the number of company agreements increased from 2,835 to 2,997 (around 6%), covering 842,900 workers in 2003, compared with 755,400 in 2002 (up nearly 12%). The number of sectoral agreements rose from 961 to 1,024 (around 7%), and the number of workers covered from 6,386,600 to 6,633,800 (nearly 4%). Sectoral agreements include provincial agreements (still the predominant type), regional agreements and national agreements.

In 2003, for the second year running, bargaining at sector and company level was conducted within the framework of a national intersectoral agreement (ES0302204F), signed in December 2002 by the main employers' organisations - the Spanish Confederation of Employers’ Associations, (Confederación Española de Organizaciones Empresariales, CEOE) and Spanish Confederation of Small and Medium-Sized Enterprises (Confederación Española de la Pequeña y Mediana Empresa, CEPYME) - and the two main trade union confederations - the Trade Union Confederation of Workers’ Commissions (Comisiones Obreras, CC.OO) and the General Workers’ Confederation (Unión General de Trabajadores, UGT). This accord provided for pay moderation, stating that settlements should take into account the government’s inflation target, increases in productivity and the specific situations of companies and sectors. It also promoted increased employment stability in exchange for more flexible working time, equal treatment and non-discrimination.

In December 2003, the social partners extended the intersectoral framework agreement on bargaining to cover collective agreements concluded in 2004. It includes a clause asking the government to 'respect collective autonomy and the leading role of the social partners in bargaining'.

Pay

Collectively agreed pay rises to October 2003 were higher than in the previous year - an average of 3.5% compared with 3.02% in the same period in 2002 - and exceeded the increase in inflation for the same period. However, the level of increase differed according to the type of agreement. In company agreements, the average rise was only 2.65%. This is usually the case and could be due to the lower number of working hours per year set by company agreements, or their provision of other benefits.

In late February 2003, the High Court of Catalonia (Tribunal Superior de Justicia de Catalunya) ruled that a 'dual pay scale' laid down in the Nissan company collective agreement for 2002-3 - whereby new recruits received lower pay than existing employees doing the same jobs - was invalid (ES0304204F). This ruling highlighted disagreements between the CC.OO and UGT trade union confederations over such dual pay scales, which are increasingly common, and raised questions about bargaining on flexibility.

Working time

Average collectively agreed annual working time fell slightly in 2003, compared with the previous year. This follows the trend of recent years. Average annual working time in 2003 was 1,755.30 hours, compared with 1,757.20 hours in 2002. Annual working time as stipulated in company agreement was almost 70 hours lower than in sectoral agreements in 2003, compared with 59 hours in 2002.

In general, collectively agreed working time has been undergoing significant changes in Spain in recent years. The annual duration of working time has been falling at a moderate rate, while there has been increasing flexibility in the organisation of working time, through methods such as annualisation and the irregular distribution of hours over the year (ES0310203F). For example, in September 2003, a working time flexibility agreement was reached by management and workers' representatives at SEAT, the Spanish motor manufacturer. The agreement provides for 10 additional Saturdays to be worked, in order to deal with increased demand (ES0310201N).

Job security

2003 saw a continuation of redundancies and lay-offs as companies around the country continued to restructure. In early February 2003, Michelin, the French-based manufacturer of tyres for cars and industrial vehicles, presented a redundancy procedure aimed at reducing the workforce at its Spanish plants by 1,300 over the next three years (ES0304202N). The company proposed to carry out this workforce reduction through a 'competitiveness plan' that it was negotiating with the trade unions, whereby 1,000 workers would go into early retirement and the rest would be redeployed to other plants. Several of Michelin's Spanish factories are relatively near each other (in the Basque Country and Castile), which could facilitate the mobility of the second group of workers.

In June, Telefónica de España- the Spanish fixed-telephony business of the Telefónica group - announced plans for a workforce reduction of around 11% in the short term, in order to deal with market difficulties and improve competitiveness. The company subsequently entered into negotiations on a redundancy procedure with trade unions (ES0307102N).

Equal opportunities and diversity issues

The central agreement signed by the social partners to provide a framework for lower-level bargaining in 2002 (ES0201207F) was the first intersectoral agreement to establish gender equality as an aim, thus establishing the importance of collective bargaining at all levels in promoting equality between men and women. This approach was reinforced in the 2003 central agreement, which established more precise guidelines and examples of 'good practices' as a reference for negotiating collective agreements. In October 2003, the Economic and Social Council (Consejo Económico y Social, CES) approved a report on collective bargaining as a mechanism for promoting equality between men and women (ES0312102F), which assessed the impact of these two intersectoral agreements on collective agreements at sector and company level. It found that provisions on equality between men and women are beginning to gain ground in collective agreements at these levels. In the opinion of the CES, the situation is 'modest but hopeful'.

The CES report found that:

• there is still a residual presence of direct discriminatory clauses (such as the presence of 'female categories of work') in some agreements, above all in sectoral agreements at provincial level and company agreements;

• most agreements make no reference to equality between men and women;

• some agreements make general declarations in favour of gender equality or refer to the current legislation; and

• a minority of agreements include clauses that improve on the current legislation, sometimes introducing innovative measures. Though these agreements are few in number, some of them have traditionally played a pioneering role in collective bargaining as a reference for other agreements. This is the case, for example, for the national sectoral agreement for the chemicals industry. The most frequent improvements on the current legislation in collective agreements are those relating to reconciliation of work and family life (ES0209103F). Improvements have been introduced particularly with regard to extending paid family-related leave or applying it in cases not provided for in the legislation

However, in general, despite major advances in legislation on equal opportunities for women and men and reconciling work and family life - often due to EU Directives - collective bargaining on these issues has been slow to develop in Spain (ES0311205F). According to the National Institute of Statistics (Instituto Nacional de Estadística), in 2000 the pay of Spanish women was 30% lower on average than that of men, which was double the average gender pay gap in the EU.

Training and skills development

The continuing training system (ES0302103N) is based on the extensive involvement of the social partners and collective bargaining in managing all levels of continuing training. In August 2003, the government adopted a reform of the system, which was to come into effect at the beginning of 2004. The aim is to streamline the system, reduce bureaucracy, clarify the competences of the central state and regions, and introduce a flexible funding system in which companies take most of the initiative. The reform entails a certain loss of influence for the social partners (ES0310110F).

Legislative developments

In September, the PP government and the opposition PSOE reached agreement on a reform of the Law on Foreign Persons, which was to come into force in January 2004 (ES0310107F). The new measures seek to combat entry and residence by illegal immigrants and to reinforce the fight against clandestine immigration practices. Trade unions criticised this latest in a series of reforms to the law in this area.

Parliament adopted a new Employment Law in December 2003, which regulates the functioning of public employment services in the context of decentralisation to the regions and the EU's European employment strategy (ES0402102F). The new legislation received the general approval of the social partners, and the trade unions felt that it reflected many of their proposals. However, it introduced no major changes to the national employment services system.

A new Law relating to Large Families was introduced, establishing the characteristics of what constitutes a large family and the social benefits to which they are entitled. New rules were approved on allowances for children under the age of three, to facilitate the integration of mothers into employment.

In October, the government adopted a Research Trainees' Statute (Estatuto del Becario) to regulate the employment and social security cover of research trainees/interns in public institutions, who previously had no rights in this area (ES0311102N)

The organisation and role of the social partners

There were no important changes to the organisation or role of the social partners in 2003. As noted above (under 'Collective bargaining'), in December the central social partners agreed a third consecutive framework agreement for lower-level collective bargaining.

Industrial action

Between January and August 2003 (the last month for which figures are available), there were 442 strikes involving 672,000 workers and 650,000 lost working days. Industrial conflict was at far lower levels than in 2002, when there were over 4.5 million strikers and almost 5 million working days lost, largely due to a one-day general strike against a government labour market reform (on 20 June 2002), but it was also considerably lower than in the three years previous to 2002. There was thus a notably lower level of industrial conflict in 2003 in comparison with previous years. The industrial action that did occur was particularly prevalent in services and in some areas of the public sector.

Employee participation

There were no major developments related to employee participation during 2003. There were no significant moves towards implementation of the EU information and consultation Directive (2002/14/EC) (EU0204207F) - the issue is already dealt with to some extent in the Workers' Statute (Estatuto de los Trabajadores) (ES0309203T). The central employers' associations and trade union confederations did not include this issue in their framework agreement for lower-level collective bargaining in 2003. With regard to transposition of the employee involvement Directive (2001/86/EC) linked to the European Company Statute (ECS) (EU0206202F) there was little movement, but it was decided in 2002 to create sectoral observatories and a national observatory to monitor this subject and the challenges for production, employment and industrial relations. A debate on the ECS has started in a few chemicals firms. There were no important developments with regard to European Works Councils, though a few new companies introduced them.

Stress at work

Stress at work is beginning to be recognised as a problem by experts and trade unions, but has hardly figured in collective bargaining and has not been reflected in legislation introducing a model of risk management and prevention. The trade unions' health and safety institutes argue that workplace health and safety committees should begin to consider this problem and apply pressure for it to be dealt with in bargaining, though they find it difficult to define indicators (though CC.OO, for example, is developing a methodology to evaluate 'psycho-social' risks). In the intersectoral agreement on collective bargaining for 2003 (see above under 'Collective bargaining'), stress is not mentioned in the section devoted to health and safety at work. However, in 2003 several company agreements (eg at Telefónica and a number of banks) provided that a commission would be set up to study the subject of stress at work.

The Fourth National Survey of Working Conditions, conducted in 2002, found that 20% of doctors’ visits by workers involved problems caused at work, 4.5% of them stress-related. Also, 5% of the respondents claimed to suffer from stress. According to a survey on quality of life at work conducted in 2002 by the Ministry of Labour and Social Affairs, between 50% and 60% of absence from work is related to stress at work. A study carried out by the National Institute for Safety and Hygiene at Work (Instituto Nacional de Seguridad e Higiene en el Trabajo, INSHT) in 2002 among primary and secondary school teachers, one of the high-risk groups for stress, found that active response strategies to stressful situations appeared to be the most suitable way of combating stress.

Undeclared work

Official labour force surveys do not provide figures on the real extent of 'underground' employment. A lengthy study published by the Ministry of the Economy in 1986 provided the latest general statistical information available, indicating that between 15% and 20% of the active population participated in the clandestine economy. Since then, only approximations have been made through hypotheses based on rough indicators. For example, there are signs that the increase in temporary work since the mid-1980s and increase in part-time employment in the 1990s have reduced the amount of undeclared work due to the great flexibility these forms of employment offer employers.

However, there are signs that point in the opposite direction. First, from 1981 to 2000 underground economic activity - including business that is undisclosed for tax reasons and that arising from illegal goods and services - increased by 5%, according to a recent study by the Institute of Fiscal Studies (Instituto de Estudios Fiscales). It may be difficult to translate these figures into jobs, but it seems obvious that part of this underground economy involves jobs offered by companies or private individuals (eg in domestic service). Second, according to many studies and the experience of trade unions, a great deal of overtime is undeclared. Finally, it is calculated that there are about half a million unregistered immigrants, many of whom are working. This affects in particular agriculture, construction and hotels and catering.

Bearing in mind all of the above, it can be estimated that undeclared employment grew in 2003 in comparison with previous years. An EU study in 2000 calculated that the underground economy in Spain represented 22% of the total.

New forms of work

With regard to temporary agency work, there was no new legislation in 2003, though the trade unions continue to call for stricter regulations. In July 2003, there were 334 registered temporary employment agencies, slightly fewer than in the same month of the previous year, following the tendency of recent years. They made 781,239 placements of workers, slightly more than in the same period of the previous year. According to a report by the employment secretariat of CC.OO (La evolución de la contratación en empresas de trabajo temporal, 2003), 48% of the contracts managed by the temporary agencies were for less than five days. Of these jobs, 70% were filled by people under the age of 30. They were mostly low-qualified jobs performed by people with a low level of education.

Part-time employment represents 8% of all employment, which is far below the EU average of 16%. Only a fifth of those who work part time (81.5% of them women) would not rather have a full-time job. This may be explained by the fact the jobs involved are mostly poorly-paid, requiring low qualifications and with little social recognition, 70% of them in services and most of them temporary. Few companies have programmes for the reconciliation of work and family life that involve part-time work in accordance with the needs of the workers and with attractive employment conditions (in terms of pay, type of work, promotion etc), though there are exceptions.

With regard to the persistently high level of fixed-term employment, despite the efforts of the trade unions, it has not fallen below 30% of all employment. It is also increasing in the public sector, where it represented over 20% of all employment in 2003 (ES0311206F). One of the mechanisms that explain this lack of change, which is also seen by critics a clear indicator of breaches of the relevant legislation, is the high rate of turnover experienced by temporary workers. In recent years, each temporary worker has signed an average of three contracts per year. In 1994 the figure was only two. Half of the temporary contracts have a duration of less than a month.

Teleworking is still not common in Spain, but in 2000 (there are no more recent figures) it was estimated that there were 260,000 teleworkers. A ruling by the Supreme Court (Tribunal Supremo) in 2003 stated that telemarketing companies, with 70,000 employees, often 'artificially degraded the working conditions of their employees'. A reference to teleworking in the intersectoral framework agreement on bargaining in 2003 gave rise to specific articles regulating it in several company agreements.

During 2003, the trade unions continued to seek to combat precarious working conditions through collective bargaining, mainly by toughening the conditions under which temporary contracts can be used (ie only when the work is temporary), preventing successive subcontracting and seeking a way to control the processes of subcontracting.

Other relevant developments

In January, the government and social partners reached an agreement on improving occupational risk prevention, with the aim of reducing the country's high industrial accident rate (ES0301208F). The measures include the: introduction of a 'bonus/malus' system of increasing or decreasing employers' industrial accident insurance contributions according to their accident rate; an updating of the system of information on industrial accidents; and closer monitoring of compliance with the risk prevention legislation.

In August, eight workers died and several more were seriously injured in an accident at the Repsol-YPF petrochemicals refinery in Puertollano. The company and the trade unions set up an investigation commission to examine the incident but they disagreed on the final conclusions. Furthermore, a large group of workers employed by subcontractors at the plant claimed that they did not feel represented by the trade unions, and called a three-day work stoppage to demand specific improvements to health and safety at work (ES0310205F).

In September, the commission which oversees the 1995 'Toledo pact' on the social security and pensions system agreed a set of recommendations of the renewal of this accord (ES0311201N). As well as continuing with many current initiatives, the commission made a number of new recommendations aimed at dealing with Spain's ageing population and low birth rate.

Outlook

As noted above, the central social partner organisations again concluded an intersectoral agreement to provide a framework for lower-level collective bargaining in 2004

Poor-quality employment was still seen by many commentators the main characteristic of the employment situation in 2003, with a great deal of 'underground' and precarious employment involving poor physical and psychological conditions. The government's labour policies, subcontracting, companies' general strategy of reducing labour costs and the lack of a trade union presence in small companies are regarded as some of the factors that explain this phenomenon. The trade unions believe that the main aim of collective bargaining should be to improve this situation, and are likely to stress such issues in 2004.

Another important industrial relations issue in 2004 is company relocations. Early 2004 saw the announcement by several multinationals, such as Samsung and Philips Novalux, that they will move all or part of their production from Spain to other countries, in general ones with lower labour costs. Other companies are threatening such relocation if they do not obtain concessions from their Spanish workforces. This continues a trend which has been seen over the past few years and which is causing alarm among trade unions (ES0402205F).

The main political event of 2004 will be the general election in March (in the event, the election saw a shock victory by the opposition PSOE - ES0404102N). (Fausto Miguélez, QUIT)