A significant number of labour reforms increased precariousness and didn’t accomplish their objective to promote job creation.

By Anna Ginès i Fabrellas

The global financial crisis had a strong impact on the Spanish labour market, especially on job destruction and unemployment. In 2013, the unemployment rate reached the country’s historical maximum (26.94%), with more than 6 million people unemployed. 

In 2019, although the unemployment rate is lower, it is still much higher (over 14%) than the European Union’s average rate, which is over 6%.

But the truth is that this decrease in the number of unemployed people doesn’t match the quality of jobs created. In fact, research findings show a lack of social and labour recovery in Spain.

Precarious work
Photo: Raoul Croes/Unsplash

The research analysed 58 different labour law reforms adopted in Spain from 2000 to 2015 to see how anti-crisis measures have affected the lives of workers.

The first conclusion is that labour law reforms were aimed at promoting job creation and employment. Of the total labour reforms analysed, 42 included in their preamble the intention to create jobs and reduce unemployment. 

The second conclusion that can be drawn from the research conducted is that a high number of reforms included social policies to promote employment and measures aimed at increasing labour market flexibility.

Research findings show a lack of social and labour recovery in Spain

The different labour law reforms favoured these two types of measures in an attempt to introduce "flexicurity" while ensuring both employers’ flexibility in managing the company’s human resources and the workers’ employment safety and social protection.

Social measures to promote a permanent contract were adopted on more than 50 occasions, a majority of them aimed at promoting employment for workers with risk of exclusion, such as women, long-term unemployed, disabled, young or mature workers.

The 5 reforms that contributed to precarious employment

Research shows that several of the labour reforms adopted in Spain contributed to precariousness. In particular, the following reforms had a negative impact on precarious employment and reduced labour standards:

  1. Promotion of fixed-term contracts and other forms of atypical work, such as self-employment, part-time work, agency work and training contracts. These types of contracts contributed to precariousness because they increased labour instability. Likewise, the higher duration of the trial period also increased instability and, thus, precariousness.
  2. An increase in the employer’s capacity to modify labour conditions, such as essential labour conditions, functions and workplace. This reform opened the door to procedures such as the right for companies to temporarily not apply collective agreements and prioritise company-level agreements. These measures increased precariousness because they reduced the worker’s individual bargaining power over labour conditions.
  3. The increase in the employer’s capacity to modify essential labour conditions described above generated an actual reduction in wages, which led to more economic vulnerability.
  4. Reforms of working time and overtime increase and employer’s flexibility to manage working time also reduced workers’ labour rights.
  5. Modifications of the legal regime regarding suspension of employment, redundancies, dismissals and severance pay for unfair dismissal also contributed to precariousness. These measures increased the employee’s vulnerability, unfair and unlawful treatment. 

In recent years, precariousness in Spain has risen due to higher levels of labour market flexibility

But the labour reforms also had a positive side. Our study identifies that the following reforms contributed to reducing precariousness and increasing labour standards:

  1. The promotion of permanent contracts and employment for workers with higher risk of unemployment and/or social exclusion, as these reforms are identified with increasing labour stability.
  2. The introduction of work-life balance measures that allow workers maternity and paternity leave, reduce their working time or take a leave of absence to care for a child or a dependent family member. These reforms increase workers’ empowerment and capacity to exercise their rights.
  3. Reforms that increase severance pay for termination of fixed-term contracts and the recognition of training rights and licenses for workers that increase labour rights.
  4. Protection of workers against discrimination, in cases of business plurality and employer’s insolvency as these laws reduce worker’s vulnerability.
  5. Measures favouring control of irregular work as they increase workers’ empowerment to exercise labour rights.

Overall, data show that the labour reforms had contradictory effects in terms of increasing or decreasing labour standards. While some reforms contributed to precariousness, others had a positive impact and helped to reduce precarious employment.

Nevertheless, a significant number of labour reforms didn’t accomplish their objective to promote job creation and increased precariousness. Specifically, they led to an increase in labour instability through flexible work, a disempowerment of workers by increasing employers’ capacities to modify labour conditions, a weakening of labour rights due to the offset of work-life balance and an increase of workers’ defencelessness towards dismissals and redundancies. 

In recent years, precariousness in Spain has risen due to higher levels of labour market flexibility. Employment is more unstable, with more presence of atypical forms of work, contracts of shorter duration, lower quality of work, lower wages, less bargaining power and higher vulnerability to job loss.

The general conclusion that can be drawn from the study is that a higher level of market flexibility can lead to an increase in precarious employment if it’s not accompanied by social protection measures.

A full version of the study can be found in The rise of precarious work in Spain. The effects of increase labour market flexibility.

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