The common thread of the labor reform

Spain - 
Federico Durán López, of counsel at Garrigues Labor and Employment Law Department.

Just as, thanks to Ariadne's thread, Theseus managed to find the way out of the labyrinth after having taken care of the Minotaur, we would need to identify a common thread, not just to get out, but simply to guide ourselves in the labyrinth that the processing/negotiation of the labor reform has become. The problem is that it is not easy to find this thread, in the generous hypothesis that it exists. But let us make an effort, searching not only in the proposed texts but also in the multiple statements, counter-statements, corrections and denials that adorn the debate.

In a recent conference, the Minister of Inclusion, Social Security and Migration stated that the ultimate objective of the labor market reform would be none other than to promote internal flexibility in companies, so that they would have effective mechanisms for adapting to the economic situation and to market variations at their disposal, without the need to adjust the volume of employment, or at least minimizing the scope of such adjustment. At the same time, he stated that this flexibility should result in fewer use oflo temporary hiring, preventing it from continuing to be used as a means of flexibility, going beyond what would really be required by the temporary hiring needs of companies. Up to this point, the approach is fully consistent with the postulates of flexibility and security in labor relations that inspire the European debate and the most recent regulatory reforms that have been implemented in the various Member States as a result. But let us go into a little more detail and see if what is proposed in the texts brought to the social dialogue table is consistent with this.

More internal flexibility in exchange for greater job preservation is a commendable labor policy objective. Provided that real internal flexibility is actually established, allowing companies to adapt, and that employment protection is not taken too far, in such a way that, in practice, the freedom of enterprise is undermined. Focusing on the former (the latter would take us too far from this reflection, since we should analyze the "employment safeguards", the "prohibitions on dismissal", as well as the growing administrative intervention in collective dismissal procedures and the likewise increasing judicial tendency to question the business options on which they are based, as well as the figure of null and void collective dismissal), the company should opt for an agile and safe procedure for modifying working conditions, for the possibilities of adapting collectively negotiated conditions through the prevalence of company agreements over sectoral agreements and the "unbinding" of agreements, and for mechanisms for the suspension of contracts and reduction of working hours, in order to maintain situations that do not have to become structural in the short term. However, what has been pointed out so far in the draft regulations submitted for the consideration of the social partners goes in the opposite direction. Not only is the regulation of Article 41 of the Workers' Statute (WS) tightened, both procedurally (with a clear commitment to the unionization of the procedures) and in terms of substance (the causes of substantial modification are now equated with those of collective dismissals), but the possibilities for adaptation by company agreements of the sectoral regulations are drastically limited and, at the same time, the procedures for the suspension of contracts and reduction of working hours are complicated and made more rigid. In the proposed wording of Articles 47 and 47 bis of the Workers´ Statute (twenty-seven pages to regulate this issue! ), priority is given to the reduction of working hours over the suspension of contracts, administrative control is intensified (in the cases of Article 47, although administrative authorization is not clearly required, there is an ambiguous mention of the "resolution of authorization of a file", that the labor authority "will authorize the file", or that, --the impact of the rushed drafting, I hope--, "the authorization of the file will be understood to be authorized") and the powers of the employer during the application of suspensions of contracts or reductions of working hours are limited. On the other hand, in the new RED mechanism for flexibility and stabilization of employment (Article 47 bis), administrative authorization is now openly required and a complex procedure is established which requires prior "activation" by the Council of Ministers and no less complex provisions for the training and outplacement of workers.

Under these conditions, to speak of a commitment to internal flexibility is openly voluntarist. And of course, in relation to the other point we were referring to, this flexibility regulation, if it succeeds, is far from being an incentive to curb the use of temporary hiring. The Government has been insisting on the need to reduce the rates of temporary employment contracts, presenting it as a European requirement and supporting it by comparing it with other countries. This comparison, however, does not make sense if the procedural and economic costs of dismissal are not included in the equation. Countries with greater "exit" flexibility will logically have a lower rate of temporary hiring, so comparisons should take into account all flexibility instruments, internal and external, and not focus exclusively on temporary hiring rates. In any case, the Government should not have much faith in the virtues of the new flexibility (?) to correct the temporary employment rate, when it proposes an enormously restrictive regulation of fixed-term contracts. This goes to extremes that are difficult to understand, such as the total eradication of the possibilities of contracting for a specific job or service. It is one thing to make adjustments to the regulation of the contract for work or service, but quite another to go to the extreme of the disappearance of the figure. Relying on the fixed-term contract to deal with the demands of seasonality or the intermittency of production would require a much more precise regulation of this contractual figure; and simply referring to the possibilities of objective termination of contracts due to the end of the production cycle, of the contract or of the administrative concession is, directly, to cheat oneself in the solitaire. And even less understandable is the intended disappearance of the permanent construction work contract. This is a figure, product of collective bargaining, based on the possibilities of adapting the legal regulations conferred on it by the third additional provision of the WS and the Law on Subcontracting in the construction sector, which has had a peaceful life, has enjoyed union acceptance and has given rise to little litigation (as has been stated, "in construction, having a temporary or permanent contract makes fewer differences than in all productive activities"; Informe sobre la situación de la prevención de riesgos laborales en el sector de la construcción en España, by Durán López, Tudela Cambronero and Valdeolivas García, Madrid, 2008). The fact that it would be advisable to update the figure, through social dialogue, embodied in the general agreement of the construction sector, in they would resort to formulas for indefinite-term contracts (fixed-discontinuous) adapted to the special features of the sector (an update probably necessary after the CJEU ruling of 24 June 2021), does not justify this legislative "irruption", which has been barely debated and barely matured. And which may contribute not to solve problems, but to generate them.