The new social rights and covering their cost

España - 
Federico Durán López, of counsel at Garrigues Labor and Employment Department

Companies do not have an unlimited capacity to take on their new employment obligations.

For years now we have lived in an accelerated recognition process of new social rights, defined in increasing detail and, if you will allow me the expression, becoming ever more “sophisticated”. This is happening in the domain of legislation and in that of public policy. In the first case, legislative reforms have been continual and they all move in the direction of increasing the options of benefiting from certain rights and protecting those who decide to actually  use them. I have nothing to object, except that the process is, more often than not, the result of outbidding, for political and electoral reasons, or otherwise comes from mere sudden ideas, and often lacks deeper thought, to consider the organizational and production-related requirements of companies and the conflicts that may arise among the workers themselves. It is forgotten that companies do not have an unlimited capacity to take on these new obligations and that they are, above all, organizations existing to produce, as efficiently as possible, goods and services to be placed on the market for the satisfaction of society’s needs.

Companies are therefore having costs imposed on them which hold back their efficiency and lower their competitive position in markets open to competition by economic operators from other countries. The benefits associated with questions completely unrelated to the production process are many, and therefore, without denying those benefits, their costs ought to be socialized. The recent Royal Decree-Law 5/2023 is good proof of this (I will not go into the fact itself of approval of the decree-law, which will doubtless go down in the history of law and will test the already extreme indulgence of the Constitutional Court over the extraordinary and urgent need that has to exist for the approval of decree-laws, in addition to requiring an assessment of this new practice of using these decree-laws (which are for urgent matters) as a way around the consequences of the dissolution of parliament and the resulting expiration of the bills of law under consideration). The lengths of existing types of leave have been increased, new types have been created (parental leave for eight weeks, “force majeure” leave for four days a year) and the position of workers has been made stronger when they request an adaptation or reduction of their working hours. And that is not all. By moving away from the legal aspects within which the law operates, and entering fully into the domain of interests or social issues, what has happened is companies have had a guardianship role imposed on them within the scope of those social issues which should fall completely outside their responsibility. Moreover they have not been able to articulate this very well: “in the exercise of this right”, is repeated in the decree-law, “encouraging shared responsibility between women and men will be taken account and, additionally, avoiding the perpetuation of gender-based roles and stereotypes”. Is that really the responsibility of employers? And how could they do so without becoming involved in workers’ private and personal lives? Reading a few of these provisions brought Asterix to my mind: these Romans are crazy! And the Spanish are not the only Romans, the Europeans are too. To prove my point: the recent EU Directive of May 10, 2023 (2023/970) on equal pay states that, when companies establish their pay structures, “in particular, relevant soft skills shall not be undervalued.” (article 4.4). I have had nightmares since reading the directive, prompted by imagining a client sending me their pay structure and asking me whether they have undervalued soft skills or what they have to do so as not to undervalue them.

In the second domain I mentioned, that of political decisions, the situation is even more alarming. There was a time in Spain when, somehow, populist promises were held back so as not to start a race in demagogy which could be dangerous for the basic balances in the system. The Toledo Accord, for example, enabled certain matters to stay out of the political debate, because a race of promises or concessions could have undermined the bases of the social security system. That accord has, largely, gone up in smoke, the necessary points of agreement to ensure the  sustainability of the employee welfare system have evaporated, and it will not be easy to recover them. The fundamental component of that system, social security, is today more fragile and has a long way to go before ensured sustainability appears on the horizon.

But beyond the domain of social security, it is as if the floodgates have opened. From the child benefit existing years ago, known as “baby checks” (it was a common joke that it was the first money some people earned with their own effort) we have moved to all types of support: free public transport passes, interail passes for young people aged up to thirty (young people aged thirty!, traveling free thanks to the taxes we all pay: the infantilization of society), support of various types, and the latest discovery/proposal: a €20,000 payment to all young people on reaching eighteen (which we are assuming is not means tested, therefore is also for those from wealthier families), so that they can study or become independent. It appears that a few politicians had in mind a type of society that exists in oil states, where the jobs that need doing are performed by immigrants and nationals have a lifelong annuity that saves them from having to work. The only problem is that here we do not have oil and so we have to ask who is going to pay for the graces and who will fund the dolce far niente. A sensible society ought to criticize any such type of proposals, in which it is not specified, clearly, how they are to be funded and who is going to bear the cost, in other words, what efforts society will have to make to fund them. There is no such thing as public money. Money is generated by society, through wealth creating activities, and the government takes a portion of the generated wealth to meet collective needs, which makes its use public, but not its source. Those needs do not include this type of gracious payments. Of course it may be that there are politicians, and society should be aware of that also, who consider that money is never a problem because money is printed by a machine and it is only a question of printing more. 

A last point: the obsession for language “without a gender bias” makes, in the decree-law, the lawyer into “a professional person of the law” and a court procedural representative “a professional representative person” to avoid using masculine words in Spanish, even through the decree law later uses the masculine form of “appellant” or “public prosecutor”.