Spain’s continually evolving Labour Reform – Sagardoy

In 1930, John Maynard Keynes said that, at the beginning of the 21st century, we would work around 15 to 21 hours per week and we would live on half of our actual income. Therefore, we would not have any economic worries.
Well, we are now in 2012, and it is precisely ‘economic worries’ that rule our lives. The economy decides national and international political agendas, and it seems that no matter how much we do, economic pressures are still upon us.
In this context, we have now in front of us a significant labour reform that thoroughly follows the path of a structural reform on a weekly basis, where performance and media impact are as important as the content itself.

In 1930, John Maynard Keynes said that, at the beginning of the 21st century, we would work around 15 to 21 hours per week and we would live on half of our actual income. Therefore, we would not have any economic worries.
Well, we are now in 2012, and it is precisely ‘economic worries’ that rule our lives. The economy decides national and international political agendas, and it seems that no matter how much we do, economic pressures are still upon us.
In this context, we have now in front of us a significant labour reform that thoroughly follows the path of a structural reform on a weekly basis, where performance and media impact are as important as the content itself.

In 1930, John Maynard Keynes said that, at the beginning of the 21st century, we would work around 15 to 21 hours per week and we would live on half of our actual income.

Therefore, we would not have any economic worries, and we should focus on enjoying the freedom that brings.

Well, we are now in 2012, and it is precisely ‘economic worries’ that rule our lives. There is hardly anyone who hasn’t heard the word GNP (gross national product), public debt, FROB (the Fund for Orderly Bank Restructuring), unemployment rates, deficit, tax consolidation, markets ─ the list goes on. The economy decides national and international politic agendas, and it seems that no matter how much we do, economic pressures are still upon us.

In this context, we have now in front of us a significant labour reform that thoroughly follows the path of a structural reform on a weekly basis, where performance and media impact are as important as the content itself. There are many evaluations that we can make on this reform, but I believe that you would agree with me in asserting that, to start with, a message of tranquillity has been transferred onto the markets. At least, it makes us believe that there is someone in the driving seat, either for good or bad, and taking decisions ─ therefore, Spain is not a ‘Concordia’ adrift.

Far from being that dramatic, the reform should be analysed in depth. If it means a change in the cultural model of labour relationships like those of the Northern European countries, we should not forget that our economic model is different from theirs, where an important part of their wealth is assigned to social protection. What is certainly true is that in Spain we have gone for two lines of action: occupation ─  promoting training and reoccupation mechanisms ─ and flexibility ─ strengthening management power and business structure. I believe both to be necessary and right.

The outcome will certainly be a dynamisation of the labour market. The net result not only depends on this reform but also on economic growth. However, we shouldn’t ignore that this economic growth will also mostly depend on what form our business structure take. Thus, it is all about satisfying employers’ needs, opening up channels of financial credit and strengthening the adaptation of the regulatory framework to the business circumstances.

This is the political agenda of the Government. This is the economic agenda of Europe. Keynes’s prediction will have to wait.

Marc Carrera Domènech is a Partner at Sagardoy Abogados. He can be contacted at mcd@sagardoy.com