Spain: Social partners involvement in unemployment benefit regimes

  • Observatory: EurWORK
  • Topic:
  • Social protection,
  • Published on: 20 December 2012



About
Country:
Spain
Author:
Pablo Sanz de Miguel
Institution:

Disclaimer: This information is made available as a service to the public but has not been edited by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

In Spain, social partners are only involved in the unemployment benefit regime to a very limited extent. They are not involved in the development phase, the implementation phase or the management phase. With regard to the monitoring phase, social partners are only partially involved by means of their participation in the General Council of the National Employment System, an institution which has a merely consultative function. Moreover, the involvement of social partners in the unemployment benefit regime is not a central issue in public debates.

1. The characteristics of the UB system in the country

Generally, it can be said that in Spain there are two main unemployment benefit levels. The insurance level (UI), and the assistance level (UA), which includes different programmes, some of them enacted during the current economic crisis. If an unemployed person has not contributed to the Social Security during at least one year or has ceased his/her right to the UI, he/she will have to apply for a mean tested UA among the different programmes which exist in Spain.

1.1. Recent changes/transformations of the UB system in your country:

1.1.1. In the last 10 years, has the country’s UB regime been modified? Have new forms of interventions been introduced?

  1. Regarding the UI:

The most important reform of the UI was developed in 1992. The Law on Urgent Measures to Promote Employment and Unemployment Protection increased the minimum contribution period from 6 months to 1 year and reduced the replacement rate from 80% to 70%, and 60% after 6 months. The unions opposed this reform.

A second innovation to be highlighted relates to the introduction of activation principles in the UI, the UA and the SA by means of Law 45/2002. The first proposition of the Popular Party government introduced new and radical demands affecting the unemployed in issues such us geographical mobility and the rejection of unsuitable job offers. However, these demands were finally modified as a result of the successful general strike that was called at the time by the most representative unions.

Taking these circumstances into account, one of the main changes has been attributed to the introduction of a commitment of activity, which established that “the recipients of benefits –whether contributory or not– must actively seek employment, accept a suitable job and participate in specific motivational, information, training, reconversion or professional insertion activities in order to increase their employability”.

Individuals pertaining to any of the three following groups are obliged to sign the commitment:

  • Applicants and recipients of contributory benefits (UI) (Subsidio de desempleo contributivo)
  • Applicants and recipients of the unemployment benefit (UA) (Subsidio de desempleo aistencial)
  • Applicants and recipients of the Active Insertion Income Programme (SA) (Programa de Renta Activa de Inserción)

This ensures that unemployed persons demonstrate their commitment to becoming employed. Once the commitment of activity has been signed, the applicant must take on the commitment to participate in active labour market policies (ALMPs). A second obligation included in the commitment of activity is that the unemployed person must accept a suitable job defined as belonging to “the profession sought by the worker as well as any other that is compatible with their usual occupation or adapts to their physical or learning skills”.

With regard to the sanctions and offences, it is considered a minor offence not to fulfil the requirements established in the commitment of activity (this includes offences such as not going to the employment services when required, among others). The sanctions applied will result in the loss of the economic benefit according to the following scale:

  • 1st offence: loss of 1 month
  • 2nd offence: 3 months
  • 3rd offence: 6 months
  • 4th offence: termination of benefit entitlement

Serious offences are applicable to two kinds of behaviour: a) when the unemployed person turns down a job offer, and b) when the unemployed person refuses to participate in ALMPs. The sanctions for these offences are imposed as follows:

  • 1st offence: loss of 3 months of benefit
  • 2nd offence: loss of 6 months of benefit
  • 3rd offence: termination of benefit entitlement

A third innovation comes with the enactment of a UI specifically addressed to self-employed. The self-employed have been covered by a specific UI since 2010 (Law 32/2010 of the 5th of August). The system is mixed: mandatory for dependent self-employed workers and self-employed workers in professions with a higher accident risk; voluntary for the rest of self-employed workers. The minimum contribution period is 12 months, which must be continuous and immediately previous to the unemployment situation. The minimum contribution period entitles beneficiaries to 2 months of UI. The measure was an initiative of the Socialist government. It was positively assessed by the unions and the self-employed associations.

Finally, a fourth innovation comes with the agreement on ALMPs signed by the Government and the most representative social partners at national level, the General Workers’ Confederation (UGT), the Trade Union Confederation of Workers’ Commissions (CCOO), and the Spanish Confederation of Employers' Organizations (CEOE). The agreement was materialized in the Royal Decree 3/2011 of the 18th of February. According to this reform, unemployed beneficiaries, whether contributory or not, are forced to sign a “Personal Employment Agreement” which commits them to follow a personal itinerary planned and developed by the Public Employment Services which encompasses measures aiming to improve employability, advice and support while seeking a job or undertaking entrepreneurial initiatives. In practical terms, it is considered that the new “Personal Employment Agreement” does not introduce any notable change with regard to the commitment of activity which is still in force. Indeed, the Royal Decree states that for unemployment beneficiaries, the Personal Employment Agreement will be a part of the commitment of activity.

  1. Regarding the UA:

A first change comes with the introduction of activation principles in the UA by means of Law 45/2002. Since 2002, beneficiaries of UA were forced to sign the “commitment of activity”.

A second significant change comes with the “Agreement to Improve Employment and Economic Growth” reached in May 2006 by the Spanish Confederation of Employers’ Organizations (CEOE) and the main trade unions: the Trade Union Confederation of Workers’ Commissions (CCOO), the General Workers’ Confederation (UGT), the Basque Solidarity (ELA) and the Galician Inter Union Confederation (CIG). Under this agreement, which encompassed several measures aiming to reduce dualization in the labour market, UA benefits were extended to persons aged over 45 years without family responsibilities.

A second innovation comes with the enactment of a provisional UA crisis-related benefit aiming to increase social protection for unemployed persons whose contributory benefits have ceased. On the 17th of September 2009, the parliament endorsed a provisional payment for unemployed persons whose unemployment contributory benefit had ceased as of the 1st of January 2009. The amount in 2009 was equal to the 80% of the Spain’s Public Indicator of Multiple Effect Income (Indicador Público de Rentas con Efectos Múltiples, IPREM), that is, 420€ a month. The payment was granted for a maximum of six months or 180 days and was available up until the 15th of February 2010. Entitlement to the benefit was conditional on the unemployed person taking part in ALMPs

In January 2011, the Government enacted a so-called Professional re-qualification programme (Programa de Recualificación Profesional) for people whose unemployment benefit had ceased after the 16th of February 2011, aiming to replace the last benefit. The programme includes an allowance of 75% of the current Public Indicator of Multiple Effect Income (400 euro a month in 2011), which is granted for no longer than six months. Beneficiaries are also obliged to participate in ALMPs. This measure was included in the agreement on active labour market policies signed by the Government, CCOO, UGT and CEOE.

  1. Regarding the SA (if relevant):

No relevant changes have been identified beyond the obligation of the beneficiaries of the Active Insertion Income Programme to sign the commitment of activity introduced in 2002.

1.2. The main characteristics of the UB system as it is now

Focusing now on the current situation, please specify the characteristics of the existing programmes:

1.2.1. Unemployment Insurance.

  1. Coverage:
  • All workers included in the general regime of the Social Security regardless of whether they are national or foreign workers.
  • Employees hired by the Public Administration in order to work in a foreign country.
  • Reservists belonging to the Ministry of Defence.
  • Civil Servants.
  • Employees included in the following Special Social Security regimes: coal-mining industry workers, agricultural workers, sea workers.
  • Business associations of cooperatives included in a Social Security regime which cover unemployment contingencies.
  • Ex-convicts.
  • The self-employed have been covered by a specific UI since 2010 (Law 32/2010 of the 5th of August). The system is mixed: mandatory for dependent self-employed workers and self-employed workers in professions with a higher accident risk; voluntary for the rest of self-employed workers. The minimum contribution period is 12 months, which must be continuous and immediately previous to the unemployment situation. The minimum contribution period entitles beneficiaries to 2 months of UI.
  1. Eligibility:

Unemployed workers must have contributed to the Social Security for at least 360 days during the previous 6 years.

  1. Duration:

If a worker has contributed to the Social Security for between 360 days and 539 days he/she will be entitled to the minimum duration: 120 days.

If a worker has contributed to the Social Security for over 2,160 days he/she will be entitled to the maximum duration: 720 days.

  1. Replacement rates:

During the first 120 days, the replacement rate is 70% of the regulatory base.

After 120 days, the replacement rate is 60% of the regulatory base.

The maximum amount in 2012 is 1,100 euro which is increased to 1,356 euro if the unemployed person has two or more children.

  1. Financing:

UB included in the general regime of the Social Security are financed by means of contributions paid by employers and employees and by the State. The amount of the contribution paid by employees and employers for unemployment is fixed in the Law of the General Budgets. In 2011, the following percentages were assigned:

Table 2
 

Employer

Employee

Open-ended contract

5.5%

1.55%

Fixed-term contract full time

6.7%

1.6%

Fixed-term contract part time

7.7%

1.6%

  1. SP involvement:

In Spain, the State is directly responsible for the Social Security scheme, being regulated by means of laws enacted in Parliament. Social partners are able to influence the Social Security regulation: first, through social dialogue, i.e., tripartite agreements concluded by the Government, trade unions and employers’ organizations, which are then translated into legislation; second, due to the fact that social partners are able to exercise a control function by means of their presence in the National Employment System, an institution created under Law 56/2003 of the 16th of December. The National Employment System comprises the State Employment Public Service (SEPE), which replaced the former National Institute of Employment (Instituto Nacional de Empleo, INEM), and the Regional Employment Public Services. The presence of the social partners in the National Employment System is guaranteed by means of the General Council of the National Employment System, legally recognised in 2006 (Law 43/2006), despite the fact that it was not fully constituted until 2009. The council has a merely advisory function.

  • who are the organisations involved and at which level do they operate?

The General Council of the National Employment System is comprised by 11 representatives of the central administration; 19 representatives of the Autonomous Communities; 19 representatives of the most representative trade union organisations –8 belonging to the General Workers’ Confederation (UGT), 9 to the trade Union Confederation of Workers’ Commissions (CCOO), 1 to the Basque Solidarity (ELA) and 1 to the Galician Inter Union Confederation (CIG)– and 19 representatives of the most representative employers’ organizations –13 of whom belong to the Spanish Confederation of Employers’ Organizations (CEOE) and 6 to the Spanish Confederation of Small and Medium-Sized Enterprises (CEPYME).

  • why are these organisations involved (legitimacy)?

These are the most representative organizations.

1.2.2. Unemployment Assistance. Are forms of UA present? If yes, please indicate their general characteristics with specific attention to:

  1. Coverage:
  • Unemployed persons whose unemployment contributory benefit has ceased, have family responsibilities and whose monthly income does not exceed 75% of the Minimum Interprofessional Wage.
  • Unemployed persons of more than 45 years of age whose unemployment contributory benefit has ceased and whose monthly income does not exceed 75% of the Minimum Interprofessional Wage.
  • Unemployed returned emigrants who are not entitled to contributory benefits and whose monthly income does not exceed 75% of the Minimum Interprofessional Wage.
  • Unemployed persons whose unemployment contributory benefit has ceased and whose monthly income does not exceed 75% of the Minimum Interprofessional Wage.
  • Ex-convicts whose monthly income does not exceed 75% of the Minimum Interprofessional Wage.
  • Unemployed persons whose unemployment contributory benefit has ceased as of the 16th of February 2011. They are covered by a provisional UA, known as the Professional Re-qualification Programme.
  1. Eligibility:

Those eligible for UA are:

  • Those who have been registered as job-seekers for one month.
  • - Those who have not rejected a suitable job and participate in specific motivational, information, training, reconversion or professional insertion activities in order to increase their employability.
  • - Candidates whose monthly income does not exceed 75% of the Minimum Interprofessional Wage.

In addition, a further criterion relating to the minimum contribution period (three months) is added for a category of workers who have no family responsibilities and are under the age of 45 years.

  1. Duration:
  • Unemployed persons whose unemployment contributory benefit has ceased, have family responsibilities and whose monthly income does not exceed 75% of the Minimum Interprofessional Wage: 6 months which, under certain conditions, may be extended by 6 or 12 months.
  • Unemployed persons of over 45 years of age whose unemployment contributory benefit has ceased and whose monthly income does not exceed 75% of the Minimum Interprofessional Wage: 6 months.
  • Unemployed returned emigrants who are not entitled to contributory benefits and whose monthly income does not exceed 75% of the Minimum Interprofessional Wage: 6 months which, under certain conditions, may be extended by 6 or 12 months.
  • Unemployed persons whose unemployment contributory benefit has ceased and whose monthly income does not exceed 75% of the Minimum Interprofessional Wage. For this category, the duration depends of whether they have family responsibilities and on their contribution period to the Social Security. Those with family responsibilities who have paid contributions to the Social Security for 3, 4 or 5 months will be entitled to 3, 4 or 5 months respectively, or to 21 months if they have paid contributions to the Social Security for 6 months or over. Workers without family responsibilities will be entitled to 6 months if they have paid contributions to the Social Security for 6 months or over.
  • Ex-convicts whose monthly income does not exceed 75% of the Minimum Interprofessional Wage: 6 months which, under certain conditions, may be extended by 6 or 12 months.
  • Unemployed persons whose unemployment contributory benefit has ceased after the 16th of February 2011: 6 months.
  1. Replacement rates:

The amount for all categories is 80% of the Public Indicator of Multiple Effect Income (426€ in 2012) except in the case of unemployed persons whose unemployment contributory benefit ceased after the 16th of February 2011, who are covered by a provisional benefit which amounts to 75% of the current Public Indicator of Multiple Effect Income, i.e., 400€ a month in 2011 and 2012.

  1. Financing:

It is financed by the State, by means of tax revenue.

  1. SP involvement:

Social partners are not involved.

1.2.3. Social Assistance. Are SA programmes with a direct relationship with the UB system and/or SP involvement present? If yes, please highlight the factors underlying such a relationship.

The main social assistance programme at national level is the Active Insertion Income Programme, providing for:

  • Unemployed workers of over 45 years of age who have been registered as job-seekers for at least 12 months and whose monthly income (considering all benefits received) does not exceed 75% of the Minimum Interprofessional Wage.
  • Workers of all ages who have a disability of a degree equal or higher than 33%, who have been registered as job-seekers for at least 12 months and whose monthly income does not exceed 75% of the Minimum Interprofessional Wage.

The amount of the benefit for both categories is the 80% of the Public Indicator of Multiple Effect Income –426 euro– and the duration is 11 months.

The Active Insertion Income Programme is linked to the UB system because beneficiaries are compelled to sign the commitment of activity and, therefore, to participate in ALMPs or accept suitable jobs. Social Partners are not involved.

In addition, it is worth noting the existence of an assistance programme at regional level, regulated and implemented by the Regional Government: the Minimum Insertion Income. This programme is addressed to people of between 25 and 64 years of age who are in situations of deep poverty. The coverage, amount, eligibility criteria and labour and social insertions programmes are linked to the Minimum Insertion Income and vary greatly between regions. Social partners are not involved

2. SP involvement in the UB regime

2.1. The development phase

SP are not involved in the development phase.

2.2. The implementation phase

SP are not involved in the implementation phase.

2.3. The management phase

SP are not involved in the management phase.

2.4. The monitoring phase

Social partners are only partially involved in the monitoring phase by means of their participation in the General Council of the National Employment System. In this body, they play a consultative role and, therefore, their monitoring function is very limited. According to Order TIN/2189/2009, of the 31st of July, the functions of the General Council of the National Employment System are:

  • “To issue a national report to the Government. The report is not prescriptive.
  • To propose mechanisms for the coordination between the National Employer Service and the Regional Employment Services.
  • To propose the development of research studies on the labour market and on the improvement and modernisation of the employment services”.

Bearing in mind the attributed competences, it can be considered that the role of Social partners in the monitoring phase is very limited or almost non-existent.

2.4.1. SP involvement in monitoring/evaluating the UB performance

  1. Which aspects of UI/UA functioning are put under evaluation (e.g. procedures, results, other)?

None concrete aspect is object of evaluation.

  1. Who is in charge of such monitoring/evaluation (a commission, an external body, etc.)?

The General Council of the National Employment System.

  1. How and when the monitoring process take place (in which phase of the process, with which frequency,…)?

Once a year, by means of the national report.

  1. Which is the output (a report, other) of such process and which the possible outcome (formal recommendations, rewards, sanctions, other)?

Since recommendations made by the General Council of the National Employment System are not prescriptive, no outputs are identified.

  1. How extensive and relevant is the SP’ role in the assessment process?

Very limited.

2.4.2. monitoring the SP involvement in the UB system

Is the SP role within the UB system subject to evaluation and monitoring?

The social partners role within the UB system is not subject to evaluation and monitoring.

3. Final observations

3.1. Public debates and policy discussion:

Since the beginning of the economic crisis, public debates on the labour market have been focused on the degree of internal and external flexibility needed to encourage employment creation. Accordingly, issues such as the decentralization of collective bargaining or the decrease of compensation paid by employers in the case of dismissal have been the main topics discussed.

With regard to unemployment benefits, the involvement of social partners has not been examined. Indeed, the main topic has revolved around the extension of unemployment benefits to new groups of workers. Accordingly, in 2009 and 2011 the Socialist Party enacted new unemployment benefits for unemployed persons whose contributory benefits had ceased. The last benefit enacted, the so-called Professional Re-qualification Programme, was included in a tripartite agreement signed by the Government and the most representative social partners.

Recently, one of the most representative employers’ organization, the CEOE, has opened a debate in the media on the need to redefine the current notion of “suitable job”. According to José Luis Feito, president of the CEOE’s Commission of Economy and Financing Policy, "the unemployed should lose their right to benefits when they turn down the first job offer.” Nevertheless, no specification was made of which new definition of “suitable job” should be applied. The general secretary of union action of the UGT deemed this proposition as “unfair and socially disgusting”. The Government has not made any official statement to this regard. It would appear that the introduction of a new definition of “suitable job” has not been included in its current political agenda.

3.2. Research:

SP involvement in the UB is not a topic of discussion in Spain. Accordingly, no academic contributions are available on this issue.

4. Commentary

In Spain, social partners are involved in the UB system to a very limited extent by means of their participation in the General Council of the National Employment System. Furthermore, their involvement is neither a topic of public discussion nor a demand of the social partners. In the years prior to the economic crisis which started in 2008, the most important topics of discussion revolved around how to introduce activating measures in the UB system. Some authors have linked these debates to the influence of the European Employment Strategy which, since 1997, has underlined the need to increase the weight of active policies as opposed to passive policies, encouraging the responsible involvement of the unemployed in the job-seeking process (Torrent, 2006; Serrano et al. 2008). Since the onset of the crisis, the main debate has focused on the extension of unemployment benefits to new groups of workers (ES0909029I). The new political party in government since November 2011, the Popular Party, has not included the reform of the UB system in its political agenda. Indeed, the labour market legislative reform enacted in February did not broach this issue (ES1202021I).

Pablo Sanz de Miguel. CIREM Foundation

References

  • Serrano, A., Fernández, C., Martín, P., Tovar J.F. (2008) Protección y flexiseguridad: la modernización de los servicios públicos de empleo. Ministerio de Trabajo e Inmigración. On line publication (http://www.seg-social.es/prdi00/groups/public/documents/binario/129735.pdf). Consulted during the month of February 2012
  • Torrents Margalef, J. (2006) El marco jurídico de la activación de los demandantes de empleo. Cuadernos de Relaciones Laborales, vol. 24, nº 2, pp. 21-36
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