The before and after of the main changes approved in the labor reform

The labor reform approved yesterday by the Council of Ministers does not imply a repeal of its predecessor in 2012. However, it will cause important changes that mark a before and after in collective bargaining, temporary contracts and the creation of the RED mechanism. The main modifications are listed below:

Collective agreements

Before: The 2012 reform gave priority to company agreements over sectoral agreements in key aspects: especially, salary negotiation.

Now: Employers will maintain their power to substantially modify working conditions if the company is in difficulties. However, the sectoral agreements will prevail in the negotiation of salaries, which reopens the door to companies in trouble having to raise salaries. On the other hand, the national agreements once again have priority over the autonomous ones.

Ultra active

Before: Since 2012 the agreements lose their validity if, after one year from their expiration, there is no agreement for their renewal

Now: An agreement will remain in force even if it has expired until there is an agreement between employers and workers. This will be the case even when the agreement in question is subject to arbitration.

Subcontractors

Before: The agreement of the subcontractor company prevailed over that of the activity carried out and could take measures such as lowering salaries to be more competitive with respect to its rivals.

Now: The workers of this type of multi-service companies will now be subject to the agreement of the activities that they specifically develop.

Training

Before: Previous legislation stated that this type of contract could be entered into with persons over 16 years of age and those under 25 who did not have a recognized professional qualification.

Now: Two modalities are created. Training in alternation, for those who do not have the degree and do not exceed 30 years, combining practice in companies and theory. A maximum of 2 years with limited hours. And those of professional practice, for those who have obtained a degree in the three years prior to the contract (five for the disabled). Duration between six and twelve months with the same salary established in the agreement for that position.

Work and service

Before: Most used temporary modality, allows the worker to have three years (four if stipulated in the agreement) linked to the start-up of a specific activity.

Now: It removed

Temporal agreement

Before: Eventual contract, without the need for causality, for a period of six months to one year by collective agreement and the interim contract, to temporarily replace a permanent worker.

Now: Causality is required to justify the contract that must be included in it. If it is due to unforeseeable causes, it will last six months, extendable to twelve by agreement. If foreseeable, only three months.

Short duration

Before: Contracts of five days or less had a 40% surcharge in the price.

Now: For those with less than 30 days, the price will be tripled at the end of the contract. Although the surcharge is higher the shorter it is, as it will always be 26 euros, regardless of the duration

Ertes (ETOP y FM)

Before: Consultation period of 15 days. Without training and without exoneration to Social Security.

Now: If companies do training, they will be entitled to exemptions of 20% in ETOPs and 90% in force majeure of the workers’ quotas.

RED mechanism

Before: Did not exist.

Now: Used to help companies deal with cyclical or sector problems. It must be approved by the Council of Ministers. If the companies do training, they will have exemptions to the contribution that vary from 40% for the sectoral modality and from 65%, 30% and 20%, for cyclicals, depending on the duration of the file.

Fixed-discontinuous

Before: For discontinuous but fixed jobs without a certain date

Now: Its use is extended, for seasonal work of intermittent performance. Its use will be facilitated by the ETTs and by the subcontractors. Preferential group in training and the Executive undertakes to modify the rules to improve their unemployment protection.

Layoffs

Before: The dismissal for economic, technical, organizational or production reasons of the administrative personnel was allowed

Now: This type of dismissal for labor personnel is eliminated.

The labor reform will create close to a million ‘false’ permanent wage earners

The Government approves the labor reform: companies will have three months to adapt temporary contracts