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
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
Main Questions:
o How could Spanish labour market loose 3
million jobs?
o What are the characteristics of this new
standard?
o Do we need a new labour law?
o Is this new Spanish labour law contrary to
international standards?
o There is a global trend to this new labour
law?
1. The evolution of Spanish
Labour Market
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)
• Model of growth based in serious unbalances:
o Oversize of certain sectors (construction)
o Underdevelopment of others (industry)
o Abuse and lack of control of temporary
contracts
Figure 4. Rates of temporality in Spain and the EU-15 (1987-2014)
Note: EU-15 (up to 1995 is EU-12). Source: Eurostat.
Evolution of labour market in
Spain: from 2008/2014
• Destruction of almost 3.7 million jobs (17.8% of
total)
Table 1. Variation of the employed population by professional situation (Spain, 2008-2015)
2008T1
Occupied people: Total
Self Employed: Total
Employer
Independent worker ( without
employees)
Member of a cooperative
Family business
Employees: Total
Public sector employee
Private sector employee
Another situation
Note: Units (thousands)
Source: EPA (INE)
20.620,0
3.599,6
1.132,5
Variation 2008/2015
2015T1
Absolute
%
-3.165,2
-15,4
17.454,8
-544,6
-15,1
3.055,0
-278,3
-24,6
854,2
2.178,1
2.081,5
71,8
21,5
217,2
97,8
17.010,1
14.393,9
2.920,7
2.956,7
14.089,3
11.437,2
10,3
5,9
-96,6
-50,3
-119,4
-2.616,2
36,0
-2.652,1
-4,4
-4,4
-70,1
-55,0
-15,4
1,2
-18,8
-42,7
• Unemployment rise:
o Focused in the private sector
o Different impact: women, young
workers and immigrants
• Since 2014: slow employment
creation (not recovery)
Figure 2. Male and female unemployment rate
Source: EPA (INE).
Figure 5. Evolution rates of temporality of women and men in Spain
Source: EPA (INE)
Figure 7. Rates of temporality in the private sector and in the public sector in Spain (1987-2015)
Source: EPA (INE)
Figure 9. Evolution of part time rate in Spain
Note: Units (thousands). *2005 T1 metodological change
Source: EPA (INE)
2. A new standard?
Old and new standard
• Characteristics of traditional employment model:
wage work, full time and open ended contracts
• Characteristics of the new standard
rise and generalisation of temporary contracts and part-time work,
de-regulation of open ended contracts
new modalities of atypical contracts
destruction of permanent jobs (which would not be recovered),
stabilisation of unemployment rate
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
o
o
o
o
o
o
3. Labour law and new labour
standard.
Do we need a new labour law?
Labour law reforms in times of austerity
• 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
Evolution of labour market and
labour law reforms
• Two phases towards deregulation
o Socialist party government (2009-2011)
o Popular party government (2012-2015)
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)
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 16/2013
o RDL 3/2014
o RDL 8/2014
o Law 1/2014
o Law 18/2014
o RDL 1/2015.
• Pensions:
o Law 27/2011
o Law 22/2013
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 extrahours and a new part-time contract linked to training
• Reform of training contracts: less security to ensure
formation and participation of Temporary Agencies
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
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
Is there a global trend?
From the south to the nord? From USA to the EU?
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 (…). .
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
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
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