New agenda agreed for social dialogue

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In July 2004, Spain's new Socialist government and the main social partner organisations signed a declaration laying down the agenda for future social dialogue among them. The focus is on 'competitiveness, stable employment and social cohesion', and specific issues for discussion include labour market policy, training, the minimum wage, employee involvement and collective bargaining reform.

In July 2004, a document entitled 'Competitiveness, stable employment and social cohesion. Declaration on social dialogue 2004' ('Competitividad, Empleo Estable y Cohesión Social. Declaración para el Diálogo Social 2004') was signed by the new Socialist Party (Partido Socialista Obrero Español, PSOE) government (ES0405202N) and the social partners. The social partner signatories were the Spanish Confederation of Employers’ Associations, (Confederación Española de Organizaciones Empresariales, CEOE), the Spanish Confederation of Small and Medium-Sized Enterprises (Confederación Española de la Pequeña y Mediana Empresa, CEPYME), the Trade Union Confederation of Workers’ Commissions (Comisiones Obreras, CC.OO) and the General Workers’ Confederation (Unión General de Trabajadores, UGT). The document identifies the agenda for social dialogue, with the declared aim of achieving higher levels of economic development, quality in employment, social welfare, regional cohesion and environmental sustainability.

The declaration by the government and the social partners continues with the current model of social dialogue in Spain, though it gives greater stress to certain priorities and is expressed in terms that could indicate a new approach to some social and labour issues.

The document reaffirms the aims of previous social dialogue, though it suggests new ways of achieving these through a model of 'balanced and lasting economic growth based on improving the competitiveness of companies and increasing productivity' (ES0403210F). The declaration states that obtaining increases in productivity and savings in the medium and long term that contribute to stable and sustained economic growth requires policies in which the public authorities must intervene. The public authorities should: fund the social welfare system; provide investment (in physical, technological and 'human' capital) in the form of more and better public services; and ensure regulations that guarantee the transparency of the market and economic freedom. In order to improve public services, employee participation and collective bargaining rights in the public administration will be boosted, together with greater prestige and professional qualifications for public employees, and there will be a reduction in the level of temporary employment, which has been increasing in the public sector in recent years (ES0311206F).

In accordance with the priorities announced by the government (ES0406102N), the declaration highlights the following areas:

  • education and training;
  • infrastructures and public investment;
  • research, development and innovation; and
  • industrial policy and the environment.

Some commentators see the document as introducing some mild 'Keynesian' elements to the current 'neo-liberal' policy approach.

Issues for social dialogue in 2004

With regard to the labour market, the declaration states that the main problems are an insufficient volume of employment and an excessively high rate of temporary employment. It praises the achievements in tackling temporary employment of the April 1997 intersectoral agreement for employment stability (Acuerdo Interconfederal para la Estabilidad en el Empleo)(ES9706211F), and suggests that it should be further developed. The signatories make a commitment to examine the stability of new jobs and the use of unjustified temporary recruitment, bearing in mind 'new forms of work organisation by employers' (referring to subcontracting), in order to propose concerted reforms aimed at offering security for workers and flexibility for companies. There will be efforts to provide more employment for disadvantaged groups and encourage them to participate more in the labour market. The employment of young and older workers, people with disabilities (ES0403108F) and other groups will be fostered. A concerted attempt will be made to find ways of enhancing the integration of women in employment and of better reconciling work and family life. The question of immigrant labour will be dealt with through a future amendment of the Law on Foreign Workers (ES0310107F).

Active employment policies and public employment services (ES0402102F) will be promoted, ensuring cooperation and coordination between the authorities and between the public and private actors involved in employment policy.

A 'knowledge economy' will be promoted through lifelong learning. The future model of training will be adapted according to needs at national level. The role of trade unions and employers in the training system (ES0310110F) will continue and the regions (autonomous communities) will participate in management.

The National Advisory Board on Collective Agreements (Comisión Consultiva Nacional de Convenios Colectivos), the National Board for Health and Safety at Work (Comisión Nacional de Salud y Seguridad en el Trabajo) and the Labour and Social Security Inspectorate (Inspección de Trabajo y Seguridad Social) will be reinforced by improving their functioning and increasing the participation of the social partners.

New instruments of industrial policy will be based on an analysis of the needs of environmental sustainability. Industrial and environmental policies will favour investments at a higher technological level in an attempt to avoid relocation of operations abroad and unjustified company restructuring (ES0402205F). The 'Kyoto protocol' to the 1992 United Nations Framework Convention on Climate Change (setting out legally binding targets by which developed countries must reduce their combined emissions of 'greenhouse' gases) will be built on and its consequences will be observed.

The national minimum wage (Salario Mínimo Interprofesional, SMI) will be increased gradually to EUR 600 per month (ES0406204N), and will cease to be used as a reference for setting the level of social benefits, including unemployment benefit.

The EU Council Directive (2001/86/EC) supplementing the Statute for a European Company with regard to the involvement of employees (EU0206202F) will be transposed, as will the information and consultation Directive (2002/14/EC) (EU0204207F). Current rules on collective employee representation will be adapted to new business realities - such as company networks and subcontracting (ES0405107F) - in terms of the information and consultation rights of workers' representatives.

The Spanish paradox of well developed legislation on occupational health and safety co-existing with a high workplace accident rate (ES0403211F) will be studied, and measures will be taken to analyse and eliminate the causes.

The declaration describes collective bargaining as the 'natural space for the social partners to exercise their autonomy', and states that public support is required to improve its capacity for regulation and to rationalise the structure of bargaining (in line with the 1997 intersectoral agreement on collective bargaining - ES9706211F). The signatories also agree to continue to foster systems for resolving labour disputes out of court through social dialogue (ES0104238N). The government will reinforce the operation of the social partners.

The declaration expresses a wish to go further with the 1995 'Toledo pact' on the future of the pensions and social security system (ES0405205F). Although they believe that the social security system is in good health, the signatories consider that there will be demographic tensions in future, and that problems of dependent people (retired people, people with disabilities and their families) must be dealt with. The declaration recommends: a greater correspondence between contributions and benefits; full state funding of non-contributory benefits; increases in the lowest pensions; augmentation of the system's reserve fund; and the promotion of (private) supplementary social welfare schemes and schemes based on collective bargaining.


The declaration by the government and social partners, while not being fully detailed, indicates a change in direction from the previous government's policy by introducing the possibility of greater public intervention and a greater role for the social partners in employment and labour policies, whilst maintaining the economic model based on competition and development.

The document indicates a renewal of the 1997 labour market reform that reduced the cost of dismissal of workers on open-ended employment contracts and promoted subsidies to foster open-ended recruitment with the aim of reducing temporary employment. A convergence in costs between the two types of contract (higher social security contributions for temporary contracts, lower contributions for permanent ones) will be fostered. This will arguably contribute towards a statistical reduction of temporary employment and to the generalisation of 'semi-stable' employment, reducing social protection in general and increasing (perhaps in gradual stages) the subsidies for recruitment of a wide range of 'disadvantaged' groups, which tend to include increasing segments of the workforce.

The new approach to employment policy will alter the framework of labour costs and define the regulation and protection of employment, but fails to foster job creation to any large extent. Despite the lower cost of dismissal of workers on open-ended contracts, the subsidies to foster stable employment, and the introduction of a large number of 'atypical' contracts, the 1997 reform has managed to reduce the temporary employment rate by only three percentage points - see table 1 below.

Table 1. Temporary employment as % of all employment, 1996-2003
1996 33.63
1997 33.15
1998 32.62
1999 32.70
2000 31.74
2001 31.66
2002 30.70
2003 30.68

Source: INE.

The July declaration states that there is an insufficient volume of employment, whereas in fact there has been a sharp increase in recent years - see table 2 below - though it recognises the challenge of improving the quality of employment.

Table 2. Employment levels, 1996-2003
Year  People in employment People in employment as % of population aged over 16
1996 12,999,700 40.29
1997 13,446,200 41.36
1998 14,018,700 42.77
1999 14,824,700 44.83
2000 15,642,700 46.71
2001 16,121,000 47.70
2002 16,377,300 48.08
2003 16,862,000 49.18

Source: Author's calculations from INE 's EPA labour force surveys, 4th quarter.

It is not known whether employment levels will fall in future, though the forecasts of a negative economic cycle suggest that this may be the case. The government's economic policy, which will continue to be mainly characterised by austerity (though perhaps slightly less strict than under the previous government), arguably does not include the possibility of counteracting a negative cycle, and without a proactive and expansive initiative (ES0404102N) such a cycle would affect employment and make it impossible to meet social challenges. (Daniel Albarracín, CIREM Foundation)

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