Spain: Latest working life developments – Q1 2017

The inability of the national social partners to agree salary recommendations; digital disconnection after working hours; and the effects of the increase in the minimum wage on employment are the main topics of interest in this article. This country update reports on the latest developments in working life in Spain in the first quarter of 2017.

Difficulties in social dialogue

In May 2015, the Spanish social partners signed the Agreement for employment and social dialogue 2015–2017. Based on this, it was expected that the social partners would agree, in 2016, salary recommendations for 2017. However, agreement has still not been reached and major unions and employer organisations are still no closer.

The major confederations, the General Workers’ Union (UGT) and the Confederation of Workers’ Commissions (CCOO) are demanding a 3% salary increase with a minimum threshold of 1.8% (below which no collective agreement must be signed). This is to restore their members’ purchasing power, which was weakened during the crisis.

However, the Spanish Confederation of Employers’ Organisations (CEOE) and the Confederation of Small and Medium-Sized Enterprises (Cepyme) propose a maximum increase of 2% (a 1.5% increase plus an extra 0.5% depending on a company’s productivity and absenteeism, with no minimum level of increase). Implicitly, this proposal envisages very small, or even no, salary increases, and is strongly opposed by the trade unions. Forecasts of a 2% rise in prices this year have added extra tension, and negotiations have broken down.

Protests are growing. The trade unions organised demonstrations in 40 cities on 19 February. They have also not dismissed the possibility of a general strike, with further discussions on this expected. Employer organisations have accused the unions of not responding to their proposals and have even suggested restricting the rights of workers’ representatives to take time off for union activities.

However, both sides agree that the ultimate goal must be maintaining, or even improving, the current pace of job creation. The highest representatives of CEOE, Cepyme, UGT and CCOO met on 28 March to try to find some common ground and speed up the framework for collective bargaining for 2017, including salary recommendations.

Increasing discussion on right to digital disconnection after work

This quarter has witnessed an increasing debate among Spanish social partners and political parties on the possibility of allowing workers to disconnect their digital devices (primarily mobile phones and computers) after their working day ends. In January, the Ministry of Employment suggested a suggested a national debate on this. In parliament, on 28 March, the Socialist Party proposed regulating citizens' digital rights, including the right to digital disconnection outside working time. Trade unions are strongly in favour, saying that legislation on this is urgently needed, bearing in mind the current lack of relevant legislation and the increasing presence of symptoms of stress and burnout associated with the continuous use of digital facilities outside traditional working time. However, CEOE has suggested that there are some sectors where this digital disconnection might not be feasible, though without giving more details.

Debate on effects of increase in legal minimum wage

In January, the government increased the statutory minimum wage by 8% (to reach €707.60 in 14 increments). This has given rise to a lively debate on its possible effects. According to the perspective of several think-tanks related to large financial institutions (CaixaBank Research and BBVA Research), this increase will have a limited effect on employment, since the number of workers earning below the minimum wage is relatively low, and there could be possible long-term negative consequences in terms of a reduction in gross domestic product (GDP). Moreover, the Institute of Economic Studies (IEE) has suggested that this increase could lead to greater structural unemployment in the medium term. However, CCOO and UGT  consider the wage rise insufficient for the 5.5 million people who earn the minimum wage or less. The unions also criticised the government for ‘pilfering’ the minimum wage negotiations from the social dialogue and approving it by royal decree.

Commentary

It is expected that social dialogue among the main Spanish social partners is likely to be revived in the second quarter of the year, particularly after the agreement reached at the meeting on 28 March on the need to keep up the pace of job creation. However, the current economic recovery experienced by Spain is likely to increase pressure to raise salary levels, particularly those ‘frozen’ during the crisis. The debate on the right to digital disconnection is also likely to gain traction in the coming months.

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