The European Commission has instructed Spain to take action on the relatively high percentage of temporary employment contracts in the public sector. Particularly within healthcare and education, there are too many flexible workers without a permanent contract.
More than half of employees under the age of 40 employed by the government have a temporary employment contract. The low percentage of permanent contracts has once again exposed the vulnerability of the Spanish labour market during economic crisis. Therefore, the European Commission believes Spain should use part of the money from the European emergency fund to solve this.
Temporary employment contracts
Negotiations are currently ongoing between the Spanish government and the European Commission. And subsequently the conditions under which the money will be disbursed from the emergency fund at the end of March. Furthermore, the European Commission is pushing for a number of specific themes. These include control systems over the expenditure of the disbursed EU money and a thorough overhaul of the pension system. One of the main concerns expressed by the Commission regards the temporary nature of Spanish employment contracts. This phenomenon has been occurring in Spain since the 1980s. It is high time that these temporary workers contracts and the so-called Austrian backpack system came to an end. Temporary employees receive a monthly payment in this “backpack” as a prepaid severance payment. This backpack can be taken to any subsequent employer until retirement.
EU does not go along with Spain’s first proposal
However, the Spanish government wants to simplify employment contracts and make conditions for granting a temporary contract more difficult. There should also be more options available for permanent contracts for non-continuous work. As compensation for the tightening of the conditions for temporary contracts, the government wants to work more structurally with temporary unemployment schemes (ERTE). Currently, these are only intended for exceptional situations of force majeure. How the costs of these ERTEs would be divided among the government, employers and employees is still being looked into. However, the request to the European Commission to support this transition in the coming years was rejected during the negotiations.
Flexible workers in all sectors
In Spain, between 25-30% of workers currently have no longer-term job security. Within the Eurozone, only Poland has a comparable percentage of flexible workers. This temporary nature can be partly attributed to seasonal work such as in the tourism sector. However, a Commission study shows that within all sectors, with the exception of the banking sector, the percentage of flexible workers is too high. The relatively high percentage in the public sector is particularly striking, especially in education and care.
Law change for employees in education and healthcare
In total, there are 700,000 people in Spain who work for the government without a permanent contract. Within the central government this is 8% of employees. And at the regional governments it is more than 10%, sometimes even as much as 30%. In order to reduce the number of temporary employment contracts within education and healthcare, the Ministry of Territorial Policy and Government Functioning is investigating the possibilities for an amendment to the Civil Service Act. Negotiations with the trade unions are already underway. “All employees who perform work that are of a structural nature must receive a permanent employment contract for this,” say sources from the ministry.
Flexibility and lower costs
According to government sources, there are many reasons why the number of flexible workers has increased in recent years. Firstly, part of the costs are transferred from the autonomous regions to the central government. Teachers’ vacation periods, for example, are not borne by the regions, but are paid from central funds. Secondly, flexible contracts can bypass the legally required replacement of retiring employees. Thirdly, there are strict rules attached to the work of civil servants, for example when assigning functions, determining work locations and working hours. The appointment of temporary employees makes it possible to shift staff more flexibly, especially within the healthcare sector. Finally, with their increased budgets in recent years, the autonomous regions have mainly appointed temporary workers to compensate for the job losses from the previous economic crisis.
Temporary contracts were signed for no fewer than nine out of ten government jobs added in Spain since 2014. Previous attempts by the government to reduce the percentage of flexible workers have failed miserably. While it has been shown more than once that a high percentage of these workers in times of crisis entails higher unemployment, lower productivity and training opportunities for workers and vulnerable social protection.