Miguel Martínez Lucio

10 August 2016

By Carlos J Fernández Rodríguez, Universidad Autónoma de Madrid, Spain; Rafael Ibáñez Rojo, Universidad Autónoma de Madrid, Spain; and Miguel Martínez Lucio, The University of Manchester, UK

The latest in our EU Comparative Series

This briefing outlines some of the key industrial relations issues in Spain in the light of the major legal reforms since the start of the crisis in 2008, pushed by the Troika and mainly enacted by the right-wing Popular Party (PP) (2011-15) – as well as to an extent the previous Socialist Party (PSOE) in its final years in power (08-11).

Since the crisis began in 2008, there have been major transformations in industrial relations regulation in EU countries. In the case of Spain, there have been some major changes in the manner in which collective bargaining operates, now providing ample space for employers to opt-out of collective regulation in various cases. Our aim has been to assess the qualitative changes and developments in terms of organisations and their concerns. The research was conducted through 28 interviews at different levels of Spanish industrial relations.

Background: The Spanish system of labour relations

Before the crisis, the coverage of collective bargaining in Spain was among the highest in Europe, although its implementation was problematic. Since the development of a liberal democratic-political system in the late 1970s, after the end of the Franco dictatorship, there was a continuous extension of collective bargaining. In addition, the steady emergence of a sectoral level of bargaining, for example in the chemical industry, provided a basis for a more articulated structure of bargaining, with minimums being established for specific sets of workers.

After 2008 with the onset of the Great Recession, governments responded to the crisis with several measures, particularly labour market reforms. The first reform in June 2010 involved many changes, most significantly the reduction of dismissal costs and broadening of ‘objective causes’ by which firms could justify redundancies, opening the possibility for companies and employees to reach agreements that undermined sectoral collective agreements. By September 2011, a new reform was passed in response to external pressures, leading to a constitutional reform (agreed between PSOE and PP) to give priority to external debt payments in the national budget and thus appease the international financial markets. Under the new PP government, the most profound reform took place in February 2012, provoking a general strike in March. This reform can be considered a landmark in Spanish industrial relations, reshaping the balance of power.

Meardi (2014) summarises its main points.

• The law enabled employers to introduce ‘internal flexibility’ without the need for trade union or works council consent in various cases;
• Created a new form of employment contract, the contrato de apoyo a los emprendedores, that included a one-year probation without employment security;
• Reduced compensation for dismissals;
• Prioritised of businesses over multi-employer agreements and enabled employers to reduce wages without union consent, subject to arbitration;
• These major changes also included the removal of ultra-actividad in collective agreements that are now limited to a maximum of two years if they are not renewed.

Not only have Spanish salaries suffered a decline, but there have been additional consequences (Fundación FOESSA, 2014). Labour market reforms have brought wider options for individual and collective dismissals, and the financial costs are now substantially lower for firms but higher socially for workers (Fernández Rodríguez and Martínez Lucio, 2013).

There is also a general trend of increasing vulnerability in the workplace and reduced job quality (Prieto, 2014). For Rocha (2014: 205), the 2012 legal reform has launched a radical change towards the consolidation of a more authoritarian model of industrial relations, which exalts unilateral employer decisions in working regulation as a principle of new labour law, impacting information, consultation and negotiation rights.

This raises broader concerns as to the potential longer term social and economic effects of deregulation.

• The first is that many organisations and individuals, even in key employer bodies, express concern at the impact of the changes on social dialogue and consensus. There is a worry that these changes will undermine the voice of trade unions and their role in working alongside employers and the state in resolving major challenges to the economy. The fabric of the social partnership is under great stress.
• Secondly, the structures of management will be under enormous pressure, even if they appear to have gained a more room for manoeuvre and greater powers in terms of their prerogative. In the course of our research, we noted a real tension between different employer and management traditions: those who tend to support social dialogue and mutual collective bargaining are concerned for the long-term stability of the labour relations system.
• Thirdly, the state, which is itself undergoing tremendous restructuring, is not able to service and support labour relations and social partners as effectively as in the past, at a time when individuals and organisations are increasingly turning to the judicial and mediation (as well as arbitration) services of the state for more assistance and intervention. Thus greater decentralisation means that the state is brought back into labour relations more directly, but without the necessary capacity to support social dialogue.

For further details see the original report:

Fernández Rodríguez, C.J., Ibáñez Rojo, R. and Martínez Lucio, M. (2016) ‘The reform of collective bargaining in the Spanish metal and chemicals sectors (2008–2015): the ironies and risks of de-regulating employment regulation’ in Koukiadaki, A., Tavora, I and Martinez Lucio, M (eds) Joint regulation and labour market policy in Europe during the crisis Brussels: ETUI

Briefing References

Fundación FOESSA (2014). ‘VII Informe sobre exclusión y desarrollo social en España’. Madrid: Cáritas.

Meardi, G. (2014) ‘Employment relations under external pressure: Italian and Spanish reforms in 2010-12’, in

M Hauptmeier and M Vidal (eds), Comparative Political Economy of Work. Basingstoke: Palgrave Macmillan, 332-350.

Prieto, C. (2014). ‘From Flexicurity to Social Employment Regimes’. In Keune, M. and Serrano, A. (eds)

Deconstructing Flexicurity and Developing Alternative Approaches. London: Routledge: 47-67

Rocha, F (2014) ‘Crisis and austerity policies in Spain: towards an authoritarian model of industrial relations’ in Rocha F (ed.) The New EU Economic Governance and its Impact on the National Collective Bargaining Systems. Madrid: CCOO, 175-204.

Funding

Our research was supported by the European Commission (project number VS/2013/0409).