Agreement on workforce renewal and employment signed at SEAT

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In November 2001, management and trade unions at the Spanish motor manufacturer SEAT concluded an agreement aimed at renewing the company's workforce through pre-retirement for workers over the age of 60 and the recruitment of young workers. The measures will potentially affect 7,000 employees.

At SEAT, the Spanish subsidiary of the German-based Volkswagen motor manufacturing group, an agreement was reached in November 2001, establishing a system of voluntary pre-retirement (prejubilación - ES0011221F) for workers aged 60 and over, and the replacement of the employees involved by young workers. The aim is to rejuvenate the company's current 14,700-strong workforce, and the scheme will potentially affect 7,000 employees. The agreement was signed by company management, the General Workers' Confederation (Unión General de Trabajadores, UGT) and the Trade Union Confederation of Workers' Commissions (Comisiones Obreras, CC.OO), which are the majority trade unions on the SEAT workers' committee. The two representatives of the General Confederation of Labour (Confederación General del Trabajo, CGT) on the workers' committee abstained from the agreement.

According to CC.OO and UGT, the background to the deal is pressure to bring forward retirement for assembly-line workers aged 60 and over on social grounds, and a desire to maintain the current level of employment by recruiting new staff on stable contracts. Another factor that influenced the agreement is the high average age of the workforce at the long-established Zona Franca plant in Barcelona, which creates problems of health and safety at work.

Under the agreement, insofar as the production needs of the company and the market conditions permit, workers may take voluntary partial retirement when they reach the age of 60, with a significant reduction in working time - to about 32 days per year - and receive a pension for 85% of their time and wages for the remaining 15%. The company will assign the workers who benefit from this measure to cover the collectively agreed time off for full-time workers. When they reach the age of 65, the workers will go into permanent retirement and receive a 100% pension.

Furthermore, for each worker taking partial retirement, SEAT will recruit a new worker with the category and conditions of 'auxiliary skilled worker' (Oficial Auxiliar), a new category of employee receiving 30% less pay than the norm. The newly recruited workers will have full-time contracts, and six months after joining the firm they will be put onto permanent contracts, though they must remain in the auxiliary skilled worker category for three years.

Another element of the agreement is that seniority-based pay supplements are converted into a 'social welfare plan', with a pension fund to be set up, into which seniority supplements will be paid, as a deferred payment for each worker.

Although the new agreement enables partial retirement and the maintenance of employment by creating a 'dual pay scale'- ie a lower wage rate for the new recruits (ES9705209F) - the main trade union leaders have approved it. José Maria Ãlvarez, the general secretary of UGT in Catalonia, stated that 'it is an innovative agreement and we hope that it will set a precedent for the labour policy of other companies in Spain.'

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