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 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 ( ) 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 ( ) 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, ) Note: Units (thousands) Source: EPA (INE)

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 ( ) Source: EPA (INE)

Note: Units (thousands). *2005 T1 metodological change Source: EPA (INE) Figure 9. Evolution of part time rate in Spain

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 o rise and generalisation of temporary contracts and part-time work, o de-regulation of open ended contracts o new modalities of atypical contracts o destruction of permanent jobs (which would not be recovered), o stabilisation of unemployment rate o 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

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 de- regulation o Socialist party government ( ) o Popular party government ( )

Labour law reforms during the begining of crisis: Phase I ( ) 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 paymentreform: 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 ( ): 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 ( ): 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

Labour law reforms during the crisis: Phase II ( ): 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 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