temporary contracts and labour market segmentation in spain: a way for dealing with unemployment in...
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Temporary contracts and labour market
segmentation in Spain: a way for dealing with
unemployment in times of crisis?
Adoración Guamán Raúl Lorente
University of Valencia
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Main ideas• Spain lost more than 3.5 million jobs
between 2008-2014 • A quantitative recovery of jobs has
started during 2014, mostly among male workers.
• This “recovery” shows the consolidation of a new labour standard
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Main Questions:oHow could Spanish labour market
loose 3 million jobs?oWhat are the characteristics of this
new standard?oDo we need a new labour law?oIs this new Spanish labour law
contrary to international standards?
oThere is a global trend to this new labour law?
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1. The evolution of Spanish Labour Market
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Evolution of labour market in Spain: from
1994/2007• Employed population increases 8.5 million people.
Figure 1. Evolution of employed, salaried and salaried private sector employees in
Spain (2002-2015)
Note: Units (thousands)Source: EPA (INE)
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• Model of growth based in serious unbalances: oOversize of certain sectors (construction)oUnderdevelopment of others (industry) oAbuse and lack of control of temporary
contractsFigure 4. Rates of temporality in Spain and the EU-15 (1987-2014)
Note: EU-15 (up to 1995 is EU-12). Source: Eurostat.
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Evolution of labour market in Spain: from 2008/2014
• Destruction of almost 3.7 million jobs (17.8% of total)
Variation 2008/2015 2008T1 2015T1 Absolute % Occupied people: Total 20.620,0 17.454,8 -3.165,2 -15,4 Self Employed: Total 3.599,6 3.055,0 -544,6 -15,1 Employer 1.132,5 854,2 -278,3 -24,6 Independent worker ( without employees) 2.178,1 2.081,5 -96,6 -4,4 Member of a cooperative 71,8 21,5 -50,3 -70,1 Family business 217,2 97,8 -119,4 -55,0 Employees: Total 17.010,1 14.393,9 -2.616,2 -15,4 Public sector employee 2.920,7 2.956,7 36,0 1,2 Private sector employee 14.089,3 11.437,2 -2.652,1 -18,8 Another situation 10,3 5,9 -4,4 -42,7
Table 1. Variation of the employed population by professional situation (Spain, 2008-2015)
Note: Units (thousands)Source: EPA (INE)
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• Unemployment rise:oFocused in the private sector oDifferent impact: women, young
workers and immigrants
• Since 2014: slow employment creation (not recovery)
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Figure 2. Male and female unemployment rate
Source: EPA (INE).
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Figure 5. Evolution rates of temporality of women and men in Spain
Source: EPA (INE)
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Figure 7. Rates of temporality in the private sector and in the public sector in Spain (1987-2015)
Source: EPA (INE)
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Note: Units (thousands). *2005 T1 metodological changeSource: EPA (INE)
Figure 9. Evolution of part time rate in Spain
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2. A new standard?
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Old and new standard • Characteristics of traditional employment
model: wage work, full time and open ended contracts
• Characteristics of the new standardo rise and generalisation of temporary contracts and part-time
work,o de-regulation of open ended contractso new modalities of atypical contracts o destruction of permanent jobs (which would not be recovered),o stabilisation of unemployment rateo modification of the collective bargaining structure and reduction
of the collective agreement’s coverage, o reduction of trade union power, social legitimation and
institutional weight
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3. Labour law and new labour standard.
Do we need a new labour law?
Labour law reforms in times of austerity
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• Labour law and labour rights have been considered the main causes of job loss
• Labour relations model is accused of “rigidity” and “flexibilisation” is proposed as solution
• Spanish labour law was so rigid?• Several labour reforms have been
adopted between 2012 and 2014• These reforms have been done
following the country-specific recommendations adopted by the Commission and the Council of EU
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Evolution of labour market and labour law reforms
• Two phases towards de-regulationo Socialist party government (2009-2011)o Popular party government (2012-2015)
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Labour law reforms during the begining of crisis: Phase I (2009-2011)
• Public sector: RDL 8/2010 (wage reduction)• Private sector: Labour law reform. Law 35/2010 (less
temporality/more flexibility/less security for dismissal) The act talks about flexycurity (green paper)
• Constitutional reform: limits of deficit and priority for debt payment
• Reform of training contracts (RDL 10/2011)• Collective bargaining (RDL 7/2011): more
decentralization (but not total and done with social dialogue)
• Pensions:• No revaluation• Increase of minimal age for retirement (67)
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Labour law reforms during the crisis: Phase II (2012-2014): the permanent
reform
• Labour Law: o RDL 3/2012 (which became Law 3/2012) (The act talks
about flexycurity (green paper)o RDL 4/2013 (which became law 11/2013)o RDL 16/2013o RDL 3/2014o RDL 8/2014o Law 1/2014o Law 18/2014o RDL 1/2015.
• Pensions: o Law 27/2011 o Law 22/2013
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Labour law reforms during the crisis: Phase II (2012-2014): the permanent
reform
• Creation of a new type of contract, the “contract supporting entrepreneurs” with a one-year trial period and tax and social security discounts
• New temporary contracts for young people (first young employment contract)
• Part-time contracts promotion by deregulation of extra-hours and a new part-time contract linked to training
• Reform of training contracts: less security to ensure formation and participation of Temporary Agencies
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Labour law reforms during the crisis: Phase II (2012-2014): the permanent
reform
• Internal “flexibility”: mechanisms to amend the provisions set by sectorial collective agreements at the enterprise level including broadly salary opt-out clauses
• Deeply modification of the dismissal procedure and reduction of its cost regarding unfair dismissal severance pay and redundancy payment. Less control possibilities for administrative and judicial authorities
• Deep reform of collective bargaining system:o Widening the opportunities for the employer to modify a
sectoral collective agreements at the level of the undertaking (opting out)
o Granting to the enterprise collective agreement a priority over the sectoral agreement
o Limiting the temporal validity of collective agreements
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Spanish “New Labour Law” and international standards
• Criticism of international bodies:o ILO:
• Report of the Committee on Freedom of Association. No 368, June 2013. Case No 2918 (Spain): “the Committee regrets the absence of a genuine consultation process with the trade unions on Royal Decree-Law No. 8/2010 despite the importance of the wage cuts it contained, and stresses the importance of the principles on consultations referred to in the conclusions”
• Report of the Committee set up to examine the representation alleging non-observance by Spain of the Termination of Employment Convention, 1982 (No. 158 ). Criticism of the Royal Decree-Law No. 3/2012 and the Trial Period
o European Committee of social rights• Constitutional Court has considered these reforms
compatibles with the Spanish constitution (vid. Resolutions 119/2014 y 8/2015
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Is there a global trend? From the south to the nord? From USA to the EU?
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Global trend:
• ILO 2015: The traditional employment model is changing in developed countries. In advanced economies, the standard employment model is less and less dominant (…). .
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Southern Europe trend:
• In Spain (as in Greece) the "standard employment relationship" wasn't as established as in other countries: the destruction of its trends has been easier
• “Flexibility” vs. “Rigidity”: was the Spanish labour law that rigid?
• Spain has been an ideal scenario to experiment
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Conclusions• High unemployment levels brings
employment conditions and standards down AND It its establishing the premise that in order to create employment, it is necessary to make it cheaper
• The perception of precariousness as the rule has a demobilizing effect which also disrupts and fragment the working class interests
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Conclusion
Beyond the problem of unemployment, a solution for precariousness is absolutely needed • From the establishment is launched the proposal of a
single contract (with compensation linked to seniority)• From trade unions: derogating last labour law reforms;
creating “employment plans” as well as recovering public services and rehiring public employees.
• From scholars: the “Job Guarantee” or “Employer of last resource” which is being theorized by many critical economist, labour law experts and sociologist