Unemployment data and labor reform: if we are doing well, why change?

Unemployment data and labor reform: if we are doing well, why change?

The Social Security contributors registered in the SEPE in October were 19,662,163 and according to the Active Population Survey (EPA) the employees exceeded 20 million workers. Rajoy’s objective with the 2012 Labor Reform (RL12) requested by the EU. Objective achieved now despite the pandemic. But there are some 300,000 workers in “employment limbo” between ERTEs and the self-employed in cessation of activity. That makes the real unemployed close to 3.5 million. Even so, a decrease in registered unemployment in October is great news. It had never happened.

Why change a law that gives these results?

According to economic common sense: now is not the time. But the political narrative demands it. UP needs to tell its electorate that it repealed RL12 so that it appears that it paints the Government. The PSOE wants to maintain the government coalition, at least one more year, and thus calm a nervous partner with their votes falling in the polls.

Between economic common sense and political haste, the solution they have found is paradoxical: “repeal without repeal” How to get it?

Modifying technical issues that only experts understand and with which a derogatory image can be created among ordinary citizens.

There are four substantial themes in RL12: severance pay; the hierarchy of agreements; the ultraactivity clause; and the modification of the substantial conditions of the job.

The cost of dismissal is not going to change (Minister Díaz has said so). A repeal that is not a repeal.

Since RL12, the company agreement prevails over the sectoral agreement. The Government speaks of rebalancing power between unions and employers; that the sectoral agreement that obliges the company agreement prevails again.

Error, because it is in each company where its management and its union committee know the circumstances that make it more competitive, maintaining or increasing its workers.

Demagoguery, because what the Rl12 really did was balance the bargaining power because the previous legislation gave it fundamentally to the union apparatus.

Difficult for CEOE/CEPYME to agree to return to what was before. The tripartite negotiation (Government, employers, unions) will have to find a formula that maintains that hierarchy without seeming so. Repeal without repeal.

RL12 eliminated ultraactivity. Until then, the agreement remained in force until the next one was agreed upon. It was removed to rebalance the excessive power of unions that did not need agree to be backed by previous agreements. It is no longer a problem, because the Supreme Court in a ruling of January 28, 2020 ruled that if an agreement is not reached in the negotiation and the company agreement lapses, the sector agreement will apply. Here it can be agreed that what the Supreme Court said is valid. Repeal without repealing, because it was already resolved.

The modification of the substantial conditions of the job is such a technical issue that it can be said that RL12 has been repealed without repealing it. Only the experts will be able to discuss it and politically the Government will be able to say what suits it.

And the precariousness that Díaz talks about so much? The Government will say that they are going to put the stones to put an end to it. But that is not possible without changing the economic structure. As long as it depends on seasonal sectors such as tourism/hospitality, construction, agriculture,… temporality (which is not precariousness) will continue. Without industrial employment, temporality will continue. That change is not made by the Government. They are the entrepreneurs with their investments. If forced restrictions are imposed on them, employment will be destroyed. We must not forget that the ETT (Temporary Employment Companies) were legalized by the PSOE Government in 1994.

Why then say that RL12 is repealed?

For political reasons. The UP and the PSOE need it electorally to request in Brussels the money of the Next Generation (140,000 MM?). There they will explain in a low voice so that it is not heard in Spain: “it is a repeal that is not a repeal.” Minister Diaz knows this, stating that it is technically impossible to repeal it. The unions know it, the CEOE knows it, Brussels also knows it. What are they playing at?

*** José Ramón Pin is a professor at IESE.


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