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Spain — Labour market reform talks collapse over temporary employment

11 June 2010

Labour market reform Negotiations between unions, employers and the government have ended for a second time without agreement, forcing Socialist Prime Minister Jose Luis Rodriguez Zapatero's government to rule by decree, El Pais reports.

Spain has the highest unemployment rate in the Euro zone (20.04%) and some of the heaviest redundancy costs in the European Union. Workers fired from permanent contracts receive 45 days of compensation for each year worked compared with eight days for temporary workers.

Both the International Monetary Fund and the European Central Bank regard the reforms of the labour market as vital for the revival of the Spanish economy and the avoidance of Spain's further downgrading by international rating agencies.

However, the Spanish Confederation of Employer Organisations (CEOE) refused to accept further burdens on temporary employment. The Ministry for Labour tried at the last minute to limit temporary employment contracts to a duration of two years. Currently there is no time limit on such contracts.

The employer organisation found it equally unacceptable to increase the redundancy compensation for temporary employees from eight days per year worked to twelve days per year worked.

Spanish daily La Vanguardia reports that the government may take up part of the cost of redundancy payments, thereby reducing the burden on employers.

According to government sources, only 12% of public sector workers took part in the general strike on 8 June 2010. The Comisiones Obreras and UGT unions have claimed that the participation figure was 75%.



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