If the main objective of the labor reform approved in 2021 was to reduce excess temporary employment, there are few experts who doubt that it has been a clear success. At least this is evidenced by two important indicators: temporary employment rates and the percentage of permanent contracts out of total contracts. According to the former, the temporary employment rates measured by the Active Population Survey (EPA) have fallen ten points from 27% to 17% in the first year of the labor reform; and if this is measured in terms of affiliation, that rate has been further cut from 26% to 14%. Likewise, among the new contracts that are signed each month, temporary contracts have gone from representing 90% to almost 50% this year.
Another thing is the “real temporality”, which is measured with the entry and exit flows of workers in the market from one quarter to another. This measurement reflects a stagnation of temporality, when the experts expected it to decrease, like the other two indicators mentioned, as explained yesterday by the economist from the University of Oviedo, an expert in labor markets and associate researcher at Fedea, Florentino Felgueroso, in a day organized by this think tank about Labor reform: A paradigm shift?
Thus, the turnover between unemployment and employment “doubles or, sometimes, triples, the European average,” recalled Felgueroso, who also pointed out that the group that is subject to the highest turnover are those temporarily hired for less than a year during 2022. And among them, those of the less qualified contribution groups. The massive use of discontinuous permanent workers also influences this increase in turnover, due to the periods in which the worker is inactive and, therefore, is not registered with Social Security.
Likewise, this researcher highlights that before the 2021 reform, two out of three very short-term contracts were rehires and in a third of the cases the worker had been rehired for the same position up to four times. “This has not disappeared with the labor reform,” Felgueroso said, “only that before there was an implicit agreement that the worker would be rehired and now that agreement is explicit, through a discontinuous fixed contract, after expanding this modality.”
At this point, some of the experts who participated in this conference yesterday had another doubt about the effect of replacing temporary ones with discontinuous permanent ones, and it is the non-existence of a term indemnity for the latter, unless the worker is dismissed, difference of temporary contracts that are compensated with 12 days per year of work when the contract ends.
For this reason, Stefano Scarpetta, director of Employment, Labor and Social Affairs of the OECD since 2013, introduced yesterday the possibility that the discontinuous landline was an “open-ended” contract, so that if the worker becomes inactive for long periods of time, If you want to unsubscribe, you can, for example, collect unemployment, something that according to current legislation is not possible if the worker leaves the job voluntarily.
In fact, both Scarpetta and Marcel Jansen, a tenured professor at the Autonomous University of Madrid, coordinator of the labor affairs area at Fedea, warned of the danger that discontinuous permanent workers are subjected to “long involuntary periods of inactivity, which can also reproduce in these hired workers the precariousness and labor poverty of temporary workers”.
In addition, these experts also warned about the fact that companies are not incorporating the cost of high turnover, also due to discontinuous fixed ones, since in periods of inactivity they collect unemployment, with which this expense falls exclusively on the public coffers (and in the case of discontinuous fixed ones, not even the unemployment contributions are higher than they are in the temporary ones). Faced with this possibility, the head of Employment of the OECD proposed the introduction of a bonus malus system, which rewards companies with less worker turnover and penalizes those who abuse this situation. This proposal was fully shared by the Fedea researchers, since it is not the first time that it has arisen in the negotiations to reform the Spanish labor market.
Another reluctance that Jansen expressed regarding discontinuous permanents was the use that collective bargaining has allowed to make of them in contracts and subcontractors. As he explained, although the rule set a maximum of three months of inactivity, the construction agreement eliminates that limit, so that these contracts could displace the construction permanent, with greater protection for the worker.
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