The labor reform: a strange coincidence

The agreed end of negotiations on labor reform has produced a peculiar coincidence in the reactions produced in front of her. Both the PP and the political forces located at the opposite end of the parliamentary arch, Bildu, ERC, Más País and even the PNV, have responded with the same statement: it is not our reform.

Of course, in a democratic regime everyone has the right, and the duty, to defend their ideas and submit them to parliamentary scrutiny. However, I believe that this type of reaction, insisting that the contents of the reform are not what one or the other defends, is what confer an unquestionable strength to the agreements achieved in social dialogue.

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After all, social dialogue as a way to guide labor regulation consists precisely in an exercise in which its protagonists, the Government and social partners, undertake to Submit your claims to a sincere and open negotiation knowing that their result will never be the same as the one that initially configured their demands or their electoral programs. Of course, the agreed reform is not the reform of the PP, nor that of Bildu or that of ERC, but neither is the PSOE reform or the one defended by Podemos.

If the coalition government I would have given up social dialogue deciding on a unilateral and imposed reform, as the PP government did in its day, it is certain that its results would allow many to say that this is ‘their’ reform. However, by opting for consensus and dialogue, the Government has chosen a path that the PP should never have abandoned in 2012. Because if one chooses his path and imposes it on others without the slightest gesture of dialogue, he must be willing to that, when he loses the parliamentary majority, he sees his initiative canceled with the same resounding that in February 2012, barely a month and a half after taking office, the PP government approved ‘his’ labor reform by decree law.

Photo: Government control session in Congress.  (EFE/Lizon)

These are the reasons that make it surprising PP reaction rejecting the tripartite agreement. After all, the best way to end the dispute opened in 2012 that threatened to turn our labor legislation into an eternal round trip depending on the evolution of the political cycle (as has happened in other important areas of public policy) is precisely the social agreement between the Government and trade unions and business organizations. Because what we need is not the reform of ‘one’ or ‘the other’, but a reform with broad consensus among which, without a doubt, the social partners should be.

The labor reform agreed a few days ago it is not the first to be reached in our country during the last 40 years. It is better to let time elapse call it ‘historical’. We need time to look back like the angel in W. Benjamin’s story. Historical were the Grenelle Agreements that in 1968 gave expression and outlet to the social convulsions of May 1968 in France or, a year later, the agreement that legally generalized the sliding scale of salaries in Italy. Also historic were the Saltsjöbaden agreements in Sweden (which shaped what would eventually be called the ‘Swedish model’ of labor, fiscal and social policy) or those reached in Germany to promote the co-management model of companies from 1976.

Photo: Antonio Garamendi talks with Yolanda Díaz (EFE/JJ Guillén)

In Spain, we tend to describe as historical, with good reason, the agreements reached in 1979 and 1980 that shaped the framework and structure of the status of workers. In one way or another, with various procedures and results, social dialogue was key in the process of economic and social stabilization during the first democratic decade. Although the Moncloa Pacts are not a noteworthy example in our field —because they were not tripartite in nature—, they were followed by a whole set of agreements, the ABI of a bipartite nature but which gave rise to the Workers’ Statute, the National Agreement on employment, the Economic and Social Agreement (in force until 1986 and which, among other things, came to configure the model of protection for the unemployed that, in essence, still exists today) and the sectoral agreements for the labor and social treatment of the reconversion process in the large sectors of the shipbuilding industry, the integral iron and steel industry and common steel, household appliances, electronic components, etc., which laid solid foundations for dialogue in the field of social and labor policies.

Over four decades, at various stages and with disparate results, social dialogue has been one of the great assets of labor and social policy in Spain. Contrary to what a shallow reflection might suggest, more than a method, more than a means, social dialogue is an end in itself. The goal is to talk, the end is none other than dialogue. And do it, from the security, backed by the facts, that talking and dialoguing is the best way to end up making good policies. In labor matters, it is better to flee from that kind of enlightened reforms designed in the laboratory. The best reform —even the one far from the initial pretensions of the ruler— is the one that is agreed upon, the one that is the result of deliberation and the contrast of ideas and interests. The one that, fleeing from the terms ‘us’ and ‘them’, ends up finding a solution that is usually superior to the one constructed analytically.

Photo: Yolanda Díaz, upon arrival at the Vatican to meet privately with Pope Francis to discuss labor reform.  Laura Serrano (EFE). Opinion
Consensus Labor Reform

Mario Barros Garcia

Were it not for the above reasons, it would be undeniable to maintain the idea that the current Government would be legitimate to carry out your social and work agenda no need to seek consensus with the main economic and social partners. After all, the previous governments during the period 2012-2015, in which they had an absolute majority, approached their strategy without opening any space for political dialogue or social consensus.

The most emblematic example was precisely the labor reform of 2012, approved by decree law just a few weeks after the new government took office.

But tax and unilateral nature of the new legislation it was also reflected in key areas of social policy, the reform of the pension updating system, or the reductions and cuts in unemployment protection and the dependency care system or fiscal policy, through a restrictive vision —now fortunately surpassed in Spain and in Europe— contained in the Budget Stability Law approved in 2012.

Photo: The economic vice president, Nadia Calviño.  (Reuters/James Lawler Duggan)

Until then, no previous democratic government had tackled such far-reaching reforms without any appeal to social dialogue or to political negotiation.

The important thing in the current labor reform is not how much of the 2012 labor reform remains and how much is transformed. From the moment the Government opened up the possibility of submitting its labor agenda to social dialogue, it was actually announcing its willingness to design a new framework as a result of the agreement in which it was evident that some of the matters that made up the 2012 reform could remain. However, the difference is that now the result is the result of the agreement, and that result resolves a situation that in 2012 had profoundly altered the balance in the labor Relations.

Photo: The Minister of Labor and Social Economy, Yolanda Díaz.  (EFE / Laura Serrano)

It must not be forgotten that that break of balance —introduced in 2012 through aspects such as the superiority of the company agreement over the sectoral one, the suppression of ultraactivity in collective agreements or the possibility of unilateral modification of working conditions by companies— produced an intense wage devaluation and the expansion of phenomena such as working poverty.

Between 2012 and 2017, the purchasing power of wages it was reduced by around 10% and the worst thing is that the deterioration in wages affected much more strongly precisely the lowest wages. This was one of the main triggers for the need to recover a fairer salary level through the intense revaluation of the SMI that began in 2017 —still under the PP government after an agreement with the then main opposition party— and continued with more impetus by the new Government since 2018. The new framework designed in the recently achieved reform allows the company agreement to modify aspects related to the ability to adapt and flexibility of companies, but, that is the key, it prevents that adaptation It is achieved through the deterioration of salary conditions or the increase in the duration of the working day outside of what is established in the sector agreements.

Photo: Pedro Sánchez talks with Yolanda Díaz in Congress.  (EFE/Rodrigo Jimenez)

Of course, although the aspects linked to the rebalancing of collective bargaining are very important, the 2021 reform introduces far-reaching improvements in the regulation of contracts and subcontractors, making it difficult for companies to use them as an inefficient instrument to reduce and worsen working conditions. Additionally, a new more demanding regulation of temporary hiring, maintaining the possibility of justified use in companies and a much deeper restriction of its use in the Public Administration, should help to overcome one of the worst dysfunctions of the Spanish labor market, which continues to maintain the highest rates of temporary employment among the member countries of the EU.

Along with this, a new ERTE regulation to convert them into permanent instruments for adapting companies and sectors subject to temporary crises, it may allow, as is already the case in other European countries (Germany is the most noteworthy example here), that the appeal to staff adjustments through layoffs is not the most used incurring much higher unemployment protection and turnover costs than what it will cost new RED mechanism for flexibility and stabilization of employment created by the reform.

Photo: Inés Arrimadas and Edmundo Bal, in Congress.  (EFE/Juan Carlos Hidalgo)

It is not necessary to insist that the negotiated end of the reform is the best way to close the open regulatory conflict in 2012. Now Parliament has the floor. Hopefully, this strange coincidence against it, appearing on both sides of the political spectrum, can become an acceptable level of consensus in a modern and balanced labor regulation that once again brings social dialogue to the fore in a country that needs understanding in a measure no less than that required 40 years ago.

*Valerian Gomez. Economist and former Minister of Labor.

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