With so much expectation having been created around the issue of reforming the Spanish labour market, the government is struggling to find a set of measures which allows them to get support of both employers and trade unions. Add to this the very different ways in which things are presented to the financial markets compared to the presentation used for domestic consumption. That's why the draft reform proposals that were released last week could hardly be more ambiguous when it comes to the finer details of what may happen.
There are two potential strands to the reform being pushed by the government. One is to try and make an already existing type of contract the standard one for future permanent employees. This contract, which has a lower level of compensation in case of dismissal than that which many workers currently have, is already available for almost all categories of employees except male workers who are already in work. It hasn't been used very much and so the government sees making this available for all new contracts as one possible reform. The issue of how they get employers to use this instead of temporary contracts is still not clear.
Then comes what they call the "Austrian model". The floating of this proposal caught many people by surprise and in the end it hasn't had a very warm welcome from anyone. The idea is that each employee has a personal fund which increases throughout their time of employment and which is used to compensate them when they are sacked. If they don't get sacked at any point then the fund pays a supplement to their pensions on retirement. The idea is that workers carry the fund with them from job to job, so that they have no fear of losing compensation benefits by changing their employer.
It all sounds quite reasonable, but there is of course one tiny detail still to be resolved. Who pays? If the employers have to pay into the fund then they are going to object to the proposal, even though such an idea effectively spreads out the cost of dismissals over good times as well as bad. Obviously, if it's the employee who has to meet the cost from their salary then it represents a significant reduction in employee benefits and is very unfair to those who work in the worst paid and most insecure professions because they are unlikely to ever receive money from the fund when they retire. So much for putting an end to the "dual" labour market.
The government didn't want to focus too much on any of these details because it still doesn't have the agreement of either unions or employers. The warmest reception initially came from inside the employers association, until Gerardo Díaz Ferrán poured some cold water on the idea. Díaz Ferrán, whose own business empire is shrinking rapidly, is still sticking close to the positions of the Partido Popular who do not want the government to achieve any sort of agreement anyway. The PP loudly calls for a reform to be made, at the same time as it carefully avoids spelling out what they think such a reform might contain. We have our suspicions, but no confirmation will be received this side of a general election. In the end, if there is no other agreement, the government will probably attempt to impose the new standard contract.