Iveco-Pegaso proposes dismissal clauses in exchange for permanent posts

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The management of Iveco-Pegaso, the Spanish vehicle manufacturer, will convert temporary posts into permanent ones, but only on condition that the workers' committee accepts an automatic dismissal clause for the workers on the new contracts in the event of a fall in production. Over May-July 1999, trade unions in the company organised a series of strikes in protest.

After six months of negotiations, a new collective agreement at Iveco-Pegaso, the Spanish vehicle manufacturer, had still not been signed in late June 1999. The dispute focuses on the reduction of temporary employment, along with the usual differences over wage increases and shorter working hours.

Iveco-Pegaso, which manufactures industrial vehicles, has four production plants in Spain employing around 2,000 people. Workers on temporary contracts currently represent 20% of the workforce, which is the maximum percentage laid down in previous collective agreements. The insecurity of the workforce contrasts with the good economic performance of the company over recent years, which has led the multi-plant workers' committee to demand a 10% reduction in temporary employment as a condition for signing the new agreement. However, the workers' representatives were willing to make certain concessions, and agreed to negotiate some form of flexible working hours for permanent employees ("internal flexibility") if the company reduced temporary employment ("external flexibility").

Management considered the situation and made an offer to reduce temporary employment that disregarded the committee's proposals. It accepted the conversion of 10% of the temporary workers into permanent ones, but the conversion is made dependent on an agreement allowing dismissal of the new permanent workers in the event of a reduction in the demand for production. In other words, management is proposing that the contracts of these new permanent workers should include an automatic dismissal clause.

The multi-plant committee rejected this counter-proposal. It claims that the company is trying to avoid bearing any part of the cost of conversion, since its offer would mean that any possible economic problems of the company would be borne exclusively by one segment of the workforce. The workers' representatives have rejected any new division of the workforce (in addition to that between permanent and temporary workers). They claim that the management counter-proposal would create two classes amongst permanent workers: a first-class group of workers with full rights and a second-class group of workers whom the company could dismiss when it wished without the risk of conflict.

The management of the company maintained its proposal unchanged for five months, so in May 1999 the workers' representatives declared a failure to agree and organised a series of protests. On 11 and 21 May they called two-hour strikes and on 28 May a three-hour strike, which received massive support. In new round of negotiations in the first week of June, management made no concessions, so the multi-plant committee called four-hour strikes on a further eight days (11, 18, 25, 28, 29 and 30 June and 1 and 2 July). On 11 June, the strike received massive support once more, which seems to demonstrate that the permanent workers of Iveco-Pegaso are not willing to accept simple automatic dismissal clauses for their temporary colleagues.

However, there are still divided opinions among employees over the position to adopt towards the company's counter-proposal. The latest confirmed news is that the workforce of the Madrid plant has called off its protests because the company has apparently agreed to negotiate guarantee clauses and participation and control by workers' representatives if the new permanent workers have to be made redundant. However, workers at the Valladolid factory, regardless of the trade union to which they belong (CC.OO and UGT are the majority unions in all the company's plants), still consider the company's counter-proposal to be unacceptable. They are not willing to accept further divisions amongst the workforce and so will continue the strikes.

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