Government repeals most of its unemployment benefit reform
In October 2002, only five months after introducing a major reform of unemployment benefit (without agreement with the trade unions), the Spanish government decided to repeal most of the changes that it had made, faced with pressure from the unions and public unpopularity.
In May 2002, the conservative People's Party (Partido Popular, PP) government issued a decree reforming unemployment benefit (ES0206210F), following the failure of negotiations with the social partners on the subject. The reforms include making receipt of unemployment benefit subject to various job-seeking conditions, and placing a number of other restrictions on benefits.
The trade unions responded with a general strike on 20 June (ES0206204N and ES0207201N) and thereafter organised several types of mobilisation, such as marches, meetings and stoppages, and issued strong demands for the withdrawal of the decree and a return to the social dialogue, so that these subjects could be dealt with through bargaining (as, it was claimed, occurs in Germany). The unemployment reform measures also proved unpopular and threatened to have political costs for the governing party, as indicated by opinion poll ratings. As a consequence, there was a government reshuffle in which the outgoing Minister of Labour bore the responsibility for the reform. His successor met the general secretaries of the two main trade union confederations - the Trade Union Confederation of Workers’ Commissions (Comisiones Obreras, CC.OO) and the General Workers’ Confedration (Unión General de Trabjadores, UGT) - in October and agreed with them to withdraw most of the controversial measures (ES0211206F). The main changes are as follows:
- the decree provided that 'periodical' 'fixed-discontinuous' (fijos discontinuos) employment contracts - ie contracts which are open-ended but involve work only at particular times of the year - would no longer entail entitlement to unemployment benefit. Now, however, workers on such contracts will again receive unemployment benefit in the months not worked (a situation typical, for example, of waiters in tourist resorts), and this measure has been consolidated through a change in the General Social Security Law (Ley General de la Seguridad Social);
- the discretionary powers awarded by the decree to the public employment services to withdraw benefit if a 'suitable job offer' is not accepted by a job-seeker have been reduced. However, any job that the job-seeker has done for at least three months during their career is now considered to be a 'suitable job' (which critics state will make it difficult for many workers to escape from precarious employment);
- the decree largely abolished 'interim wages' (salarios de tramitación) - ie the wages that employers are obliged to pay to dismissed workers claiming in court that their dismissal is unfair, between the date of dismissal and the court ruling, if the court confirms that the dismissal was unfair. It has now been agreed that if an employer recognises that a dismissal is unfair and pays the appropriate compensation within 48 hours, interim wages are not applicable. If the employer does not, and the dismissal is found to be unfair, it must pay interim wages for the whole duration of the legal procedure rather than for two months, as was previously the case. However, the PP has subsequently presented an amendment establishing the payment period again at two months, in response to pressure from the Spanish Confederation of Employers’ Organisations (Confederación Española de Organizaciones Empresariales, CEOE); and
- receipt of compensation for dismissal will again be compatible with receipt of unemployment benefit.
However, the government has not withdrawn its reform of the special unemployment benefit for casual agricultural workers, who will still in future be subject to the same conditions as all other workers. The trade unions, and in particular those representing agricultural workers, have insisted that they will not rest until they have got back the special benefit that agricultural workers enjoyed previously. They claim that is not acceptable for these workers to be subject to the same conditions as other workers, because most work in agriculture is seasonal, and they are therefore unable to work on every working day of the year.
The unions have thus persuaded the government to return many matters more or less to where they were before the reform. However, critics state that serious problems related to unemployment are still pending attention: low benefit levels; the lack of protection for unemployed people over 45 years of age for whom it is difficult to find work; the ineffectiveness of the public employment services in finding new jobs; the lack of connection between training and occupation; and the poor results of integration policies because integration centres do not have sufficient funding and staff to monitor unemployed people individually.