Spain draws up National Action Plan for employment without union backing

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The Spanish government, in drawing up its National Action Plan for employment in response to the EU employment guidelines, for submission to the June 1998 Cardiff summit, has given priority to active employment policies supported by training and local activity. However, the trade unions have severely criticised the Plan and are organising protests against it.

At the European Council Jobs Summit in Luxembourg in November 1997 (EU9711168F), Member States agreed to a set of Employment Guidelines aimed at providing a framework for national action on employment under four main "pillars" - employability, adaptability, entrepreneurship and equal opportunities. National governments were to draw up National Action Plans (NAP s) on employment by 15 April 1998, and to give the social partners the opportunity to make a specific input in those aspects of the "employability" and "adaptability" guidelines which give them a direct role. National governments were also expected to consult the social partners about the whole NAP and arrange for their views to be incorporated. The NAPs were to be considered by the Cardiff European Council meeting in June 1998.

Negotiation process

The Spanish government's NAP has been widely discussed in recent months at meetings in consultation with regional governments, city councils, employers' associations, trade unions and non-government organisations (NGO s). The government feels that, in recent history, no such plan has been submitted to so much consultation.

During the negotiation process the Government bore in mind certain demands made by the employers' associations - in particular the problem of labour costs as an obstacle to job creation. It also took into account proposals to reduce personal rates of income tax (IRPF) put forward by the Spanish Confederation of Employers' Organisations (Confederación Española de Organizaciones Empresariales, CEOE) (ES9803250N). The trade unions, however, feel that the NAP contains no proposals for public investment to create jobs, while city councils feel that insufficient funds are provided for generating employment in the local environment.

Consequently, the NAP has been approved without the support of some of the most important actors: the trade unions and the city councils. Indeed, the former have already begun a series of protests that will last until the autumn to press for changes and to make the public aware of the alternatives (ES9804253N). The Government does have the support of most of the regional governments, in which the conservative party (Partido Popular, PP) has a majority.

Features of the Plan

The Spanish National Action Plan brings together several institutional initiatives that had previously been separated. Firstly, the NAP focuses on the guidelines under "pillar 1" (employability) of the Employment Guidelines on reforming vocational training and providing guidance for the young and long-term unemployed people. The action will be funded by a sum of about ESP 900 billion, with an additional ESP 300 billion from the Official Credit Institute (Instituto de Crédito Oficial) in tax aid for setting up small companies. However, the trade unions feel that the budget should include an additional amount devoted to local employment initiatives.

Secondly, the Plan will be decentralised in collaboration with the city councils and through the Spanish Federation of Municipalities and Provinces (Federación Española de Municipios y Provincias, FEMP). The government has announced an emergency plan to reduce unemployment in the most affected municipalities by intensifying careers guidance programmes for job seekers, and setting up "employment workshops" (talleres de empleo) and training courses. The employment workshops will be aimed at a wider sector of the public and particularly at training women in sectors in which they are a minority. The employment workshops will also be compatible with the current "workshop schools" and "trade houses" whose activities are aimed at young people.

At the moment the FEMP manages 70% of the aid for job creation at local level. During the negotiation process on the new NAP, the city councils asked the government to decentralise responsibilities and funding. However the Plan arguably contains few financial figures, so the opposition has accused the Government of "putting a pretty wrapping around empty containers".

The third key line of action is the development of part-time employment. At the moment it represents 8% of employment, a figure much lower than the European Union average of 16% and far below the 30% of the Netherlands, for example. The NAP proposes a new regulation governing part-time contracts to make them more attractive to employers and trade unions. The Plan proposes that these contracts should entitle the workers to pensions, unemployment benefit and allowances proportional to the number of hours worked.

Lastly, the Government feels that high labour costs are a disincentive to job creation. Therefore, the NAP proposes maintaining subsidies for the creation of permanent jobs and the conversion of temporary contracts into permanent ones. Subsidies will be devoted to reducing companies' non-wage costs. Three additional types of contract will now also be eligible for social security contribution reductions, for which a budget of about ESP 45 billion has been assigned. Allowances will thus be payable to employers in respect of:

  • secure and reduced part-time contracts (less than 12 hours a week or 48 hours a month), for which only half the normal social security contributions will be payable for two years;
  • secure contracts entered into by workers who are self-employed; and
  • contracts to replace women on maternity leave, though maternity benefit will continue to be paid by the administration.

Reaction of the social partners

CEOE and the Spanish Confederation of Small and Medium-Sized Enterprises (Confederación Española de la Pequeña y Mediana Empresa, CEPYME) are moderately pleased with the NAP but have made some criticisms of it. They feel that it is necessary to reduce the tax burden of companies and to reduce the non-wage costs of employment. A document presented by the employers, entitled "The entrepreneurial contribution to the formulation of the Employment Plan of the Kingdom of Spain", criticises bureaucratic obstacles to setting up companies. This document demands the reduction of "red tape" and emphasises the need to encourage self-employment. With regard to working time, the CEOE is in favour of greater flexibility in the use of working hours. However, it totally rejects the possibility of reducing working hours by law - as is demanded by the trade unions - since this would increase labour costs and damage the competitiveness of companies. The document states that the distribution and duration of working hours should be defined only through collective bargaining.

The trade unions are disappointed with the Plan. In a combined official statement, the Trade Union Confederation of Workers' Commissions (Comisiones Obreras, CC.OO) and General Workers' Confederation (Unión General de Trabajadores, UGT) severely criticised the NAP. Firstly, they claim that the Plan has been approved with insufficient public funding. The current inflation rate (0% in the last quarter and 1.8% over the last year) offers the chance for an expansionary employment policy, the unions state. Employment policy should not consist of further reducing the public deficit by cutting public expenditure on investments which could generate employment and guarantee social protection. Secondly, the trade unions criticise the reduction of the social security contributions on part-time temporary contracts, in respect of which employers will pay only 45% of the normal rate. Thirdly, they demand the reduction of the working week to 35 hours through legislation. Fourthly, like the city councils, the unions demand: the formulation of specific, quantifiable objectives and public financial support for new sources of employment at local level; a policy of incentives for the most disadvantaged groups that gives priority to integrating them into first-time employment; and training courses and guidance to help unemployed people to find suitable jobs. The trade unions feel that the government's economic policy does not give priority to job creation, cohesion or social solidarity, as was shown at the European Council meetings in Amsterdam (EU9707135F) and Luxembourg (ES9712235F).

Commentary

Macroeconomic indicators show a healthy economic situation in which the public deficit and inflation have been reduced and a relatively balanced economic growth has been attained. It therefore seems reasonable to set up an employment policy with a far more committed level of public funding, especially bearing in mind that the unemployment rate in Spain is very high (20.3%) and the labour market activity rate very low (39.8%). (A Martín Artiles, QUIT-UAB)

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