Employment Law Reform Proposal

26 February 2010

On February 5th, the Council of Ministers approved the employment law reform proposal which the Government prepared with the aim of adapting the Spanish employment market to the new economic reality.

Even after the presentation of the aforementioned proposal to union leaders and management representatives last week uncertainty remains as to what measures the reform proposes. The truth is that both management and union leaders have made reference to a generic and open text which sets the groundwork for subsequent labour negotiations. In short, we will have to wait for negotiations to get underway in order for concrete measures to begin to take shape.

Meanwhile, speculations abound over the contents of said proposal. The following are some of the measures being talked about:

  • An employment scheme for young people without professional qualifications between the ages of 16 and 24.
  • A new contract with reduced severance pay for wrongful dismissal which has already been ruled out.
  • Incorporation of the “German model” into the Spanish system: consists of shift reductions with unemployment benefits paid in proportion to the reduction in hours combined with aggressive training programs, all subject to less formalities than the current Spanish corporate downsizing model (ERE).
  • A better use of current contract models, promotion of open-ended employment contracts.

For further information please contact Juan B. Soravilla: jsoravilla@mmmm.es