CHAPTER 8

SPAIN

In the literature, Spain is generally placed in the ‘Latin model’ of industrial relations,

characterised by fragmented unions, high state intervention, and adversarial relations. Its

historical development is however different from that of France and Italy, and results in some

important distinctive features. In particular, the role of the state is different: it occupies a

much smaller place in the economy than, for instance, in France, but it is omnipresent in the

form of widespread legalism and extensive administrative regulations: both are a direct

legacy of Franco’s regime (1939-76) and of the transition to democracy. Moreover, the

specific timing of EU integration (in the 1980s) is reflected by a more visible EU influence

than in the ‘older’ member states, and in distinctive openness towards foreign multinationals.

The geographic position of closest European country to Africa and an important postcolonial

legacy are behind particularly large immigration flows. Overall, we have therefore a specific

case of a country where a strong national state tradition was impacted, in relatively little time,

by particularly powerful internationalisation pressures.

HISTORICAL DEVELOPMENT

Spain has changed so deeply in the last 35 years that not only a passing visitor, but even its

younger inhabitants, can easily forget how different it was politically and socially until 1976.

Its transition from right-wing Francoist dictatorship to democracy has often been referred to

as a model of success. In 1980s Poland, for instance, Solidarność experts explicitly

mentioned the Spanish pacts of Moncloa in 1977 between politicians, labour leaders and

employers as a model for a peaceful, negotiated exit from dictatorship. That success was far

from easy and guaranteed: in fact, a military coup was attempted to revert the process in

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February 1981. Nonetheless, Spain moved extremely quickly to political democracy, free

trade unions, and European economic integration, with accession into the EEC in 1986.

Economically, Spain moved from the status of technically a ‘developing nation’ according to

the UN in the 1960s, to one of the fastest growing economies of Europe, with a large influx

of both foreign investment and foreign workers. The economy was transformed: between

1975 and 2010 employment in agriculture fell from 22% to 7% of the total, in industry it

declined from 27% to 15%, while in services it increased from 42% to 62%. Its GDP per

capita, which in the 1970s was still less than half the EEC average, in 2007 shortly overtook

the Italian one (Eurostat data). Culture changed too: the centrality of a particularly

conservative Catholic Church, including political and economic influence of the lay

organisation Opus Dei, gave way to rapid secularisation, including re-emerging

anticlericalism and profound evolution in civil rights and gender relations. In 1981 divorce

was legalized, and in 2005 Spain was the second EU country after the Netherlands to allow

homosexual marriages, while the fertility rate dropped from the third-highest (after Ireland

and Portugal) to the lowest in western Europe by 2000 (at 1.23 children/woman), to recover

slightly thereafter, also thanks to immigrants. In the sphere of employment, these changes

translated into a spectacular increase in the female activity rate, from 28% in 1976 to 65% in

2010, while that of men decreased slightly.

Given such deep discontinuities, does it make sense to speak of political traditions in Spanish

industrial relations? The current actors – a democratic government, the employer association

CEOE and the main unions CCOO and UGT – date of 1977. Nonetheless, important legacies

remain. In fact, there has been legislative continuity between the Francoist dictatorship and

democratic Spain, and the transition itself acted as a ‘mark’ for later developments (Pérez

Díaz, 1993, 1996). The Spanish political path deserves specific attention.

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In his account of European state traditions and industrial relations, Crouch (1993) notes that

in Spain guilds were abolished in 1877, before industrialisation, and that later, corporatist

interest organizations were seized by the authoritarian Right, although some short-lived

attempts to strengthen them were made during the Primo de Ribera dictatorship (1923-30)

and the Second Republic (1931-36). Therefore, they took over an exclusively reactionary role

and became of little use with modernization. In this regard Spain was different from Italy:

while Mussolini’s fascism was in several aspects a modernizing force, Franco was more

concerned with ensuring that modernization would be constrained within traditional

hierarchical forms (Linz, 1981, Williamson, 1985). Despite the corporatist language of the

Labour Charter (Fuero del Trabajo) of 1938, Spanish corporatism never had the ideological

and the economic role that it gained in fascist Italy, or in Salazar’s Portugal or pre-war

Romania.

The implication, for Crouch, was that those observers who detected an apparent continuity

‘from corporatism to corporatism’ (Giner and Sevilla, 1984), that is between the Franco

period and the new democratic social agreements of 1977-84, were wrong. In reality, there

was no organisational legacy between the two periods (Crouch, 1993: 329): Franco’s regime

corporatist structures were merely facades, while state hierarchy was much more important.

During the first twenty years of regime (1939-58), in particular, the government regulated

wages and working conditions by decrees (ordenzanzas laborales), with little scope for the

corporatist bodies such as the official trade union (Organización Sindical Española,

combining workers, managers and employers). Even after collective bargaining, alongside a

degree of economic liberalism, was formally introduced in 1958, it did not develop into

anything more than rituals. The long-term legacy is that social partners lack the degree of

articulation that is needed for effective corporatist regulation.

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Despite the weakness of corporatist traditions and the discontinuity introduced by democratic

transitions, Spanish political legacies have affected the development of current labour

relations in many ways. First, the role of the state and of legal regulations (ordenanzas

laborales) during the regime led to a particular emphasis on legal expertise. In the 1940s-50s,

large enterprises, especially state-owned, developed their personnel function around the

specific role of ‘Personnel Director – Lawyer’ (Jefe de Personal-Jurista) (Rodríguez Ruiz,

2011), while the local business organisations of the Organización Sindical Española

established direct collaboration links with legal firms. Although management structures and

employer organisations have changed, and the labour ordinances have been gradually

replaced by collective agreements during the 1980s and 1990s (Varas García, 1993), the role

of lawyers and of legal firms in the enterprises and in local (provincial) collective bargaining

remained influential. At the central level, the above-mentioned apparent continuity of

corporatism despite discontinuity and weakness of corporatist associations reflects in fact the

legacies of state institutions: not because these had not changed, but because their

centralisation created strong incentives for centralized, political negotiations at the time of

transition (Encarnación, 1997).

Secondly, the particularly conservative role of the Catholic Church in the Franco regime, and

before in the Restoration kingdom (1874-1931), operated in the way Crouch’s theory (1993)

expects it to do: it led to a deep divide between Church and secular forces, which took a

brutally violent turn with the Civil War of 1936-39, translating into political contestation and

in particular trade union pluralism. However, the Catholic Church in Spain had even more

impact, and it assumed increasing influence on economic matters in the second half of the

Franco regime, through the important Opus Dei network, particularly strong in the

management of state-controlled companies, and through the creation of the first important

business schools. Catholic business schools such as IESE and ICADE introduced the teaching

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of the managerial, unitarist theory of Human Relations coming from the USA and formed the

new generations of managers, increasingly in collaboration with American business schools

(Rodríguez Ruiz, 2011). Given this particularly reactionary and pro-business nature, in Spain,

unlike in other Catholic countries like France, Italy, Poland and Belgium, Catholic trade

unionism failed to emerge as a relevant actor. Before 1936, the Catholic labour movement

was suffocated by excessive clericalism (Martin, 1990), and later, despite contributing to the

creation of the clandestine trade union USO (Union Sindical Obrera) in the 1960s, failed to

find space: after the democratic transition, most of USO activists defected to join the Socialist

union UGT or even the communist-oriented CCOO (Martín Artiles, 1990). Not only did the

particularly conservative and polarising role of the Church in Spain leave little space for

socially progressive Catholicism, but democratisation arrived at a time (the mid-1970s) when

Europe was secularising, and the Church did not have the influence and power anymore to

inspire strong trade unions, in the way it had done in earlier periods in other countries.

The legacy of the Spanish state does not operate in a single direction, though, that is that of

centralisation, legalisation, and politicisation. Legacies of domination create form of

resistance and contain seeds of alternatives, and this is particularly clear in the case of

Catholicism and state centralism. In terms of Catholic legacies, as mentioned, the transition

gave way, within few years, to particularly secular, including anti-clerical, tendencies, and a

rapid change in gender relations: unlike other Southern European countries and notably Italy,

Spain did try to move away from the conservative, family-based welfare state model, with

more provisions for the unemployed, youth, and care work (Naldini and Jurado, 2013). The

experience of democratic transition, just like in post-communist countries (see Chapter 11 on

Poland) introduced specific new paths, often in opposition to the previous patterns. In

particular, exactly because of the lack of associational freedom at the national level,

underground free trade unions started to develop at the workplace level, exploiting the

5

‘interstices’ of free activity, far away from political power, during workplace assemblies and

negotiations: this is how the Workers’ Commissions (Comisiones Obreras), the future leftist

trade union, were born. In terms of territorial distribution of power, the authoritarian

centralisation of Franco’s times gave way, progressively, to decentralisation and regional

autonomy, made more visible by the fact that the strongest trade unions emerging from the

transition periods were those of the Basque countries and Catalonia. In 1994, the reform of

collective bargaining, against the preferences of national trade unions and employer

associations, granted regions more bargaining autonomy, and in 2011, another reform, under

pressure from regional parties, stipulated the priority of regional-level collective agreements

over the national ones.

ECONOMIC AND POLITICAL CONTEXT

In the first twenty years of regime, out of both ideology and necessity Franco conducted an

autarchic economic policy, with national investment replacing imports and foreign

investment. Differently than in Mussolini’s Italy, though, Franco did not pursue ambitious

industrialisation and urbanisation policies: the civil war had shown very cleary that

conservative Spain was concentrated in small towns and countryside, and urbanisation would

have jeopardized the regime’s social bloc. From 1959, however, Spain gradually increased its

economic internationalisation, joining IMF, World Bank and GATT, and opening up to trade

and investment. Modernisation was incomplete: when Franco died the Spanish GDP was still

around half the EEC average, the agriculture sector was oversized, and the industrial one was

largely uncompetitive. The opening to the European market in the late 1970s-early 1980s

involved radical restructuring and the loss of approximately 1.8m jobs.

As a result, Spain never achieved the degree of industrialisation of the other five countries

analysed in this book: it is the only one where manufacturing has never been the main

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employment sector, agriculture having been directly replaced by services in the early 1970s.

The peak of manufacturing employment was at around 38% in 1975. Industrialisation in

Spain had also been particularly uneven geographically, being largely concentrated in

Catalonia and the Basque country – two regions with strong separatist forces.

In terms of sectors, a further specificity of the Spanish economy has been the weight of

construction. A spacious country with a growing population (demography, and then

immigration) and strong foreign demand for second-homes, Spain has long had an important

construction sector, but this was exacerbated in the 2000s following the liberalisation of land

use by the conservative government, low interest rates and the credit boom. Construction

became the main driver of economic and employment growth, and at its peak in 2007, it

employed 14% of the Spanish workforce, twice the EU average – before however the

speculative bubble burst and more than half of the sector jobs were destroyed, contributing to

a fast rise of unemployment to a EU records of 24% in 2012 (see Case 2).

Spain has one of the highest shares of small companies in the EU, which has important

implications for industrial relations. In 2005 (Eurostat data), micro companies (fewer than 10

employees) employed 39% of the Spanish workforce (EU average: 30%), and small

companies (with 10-49 employees) another 26% (EU average: 21%). These small companies

tend to operate in low-added value services and construction rather than manufacturing, with

few cases of ‘industrial districts’ of geographically concentrated, single-product small

companies as in Italy. Small employers in Spain, therefore, tend to avoid employee

representation, high performance work systems and company-level collective bargaining: for

employment relations, they rely rather on local (provincial) employer associations and on

multi-employer collective agreements. The actual observance of collective agreements in

small companies is considered to be uneven, and working conditions tend to be significantly

worse than in large ones (Prieto, 2009).

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The state sector, by contrast, is relatively small. Spain has long been the country of the old

EU (EU15) with the lowest level of government expenditure of the economy (around 36% of

GDP in 2002-08, as the 47% EU average). After Franco, democratic Spain has been very

reluctant towards direct ownership, and during the banking crisis it waited four years before

nationalising a large bank, Bankia, in 2012.

In 2010, the employment level in Spain was 62%, well below the EU target of 70%, and,

despite the significant progress of female employment mentioned above, with a large gap

between men (69%) and women (56%), and a strong concentration in services (74%). The

Spanish labour market has been characterised since the 1980s by the highest share of

temporary employment, well above 30% during the 1990s and 2000s, before falling till 24%

in 2012 after a large share of employees on temporary contracts lost their jobs. According to

the Labour Force Survey, 92% of Spanish employees on temporary contracts would have

preferred permanent employment but could not find it – the second-highest rate in the EU.

The high share of temporary employment has its roots in both economic and family

structures. First, the share of seasonal employment (agriculture, construction, tourism) is

larger in Spain than in other countries. Secondly, the dual employment regime has been

defined as an ‘implicit inter-generation contract’ (Serrano et al., 1999: 38), whereby Spanish

youth consents to better employment security for the older generation, in exchange of

informal returns within the family, e.g. with parents offering adult children accommodation,

maintenance, financial help for studies and home buying, and childcare for grandchildren.

During the crisis that started in 2008, Spanish young workers were frequently reported to

return to their parental home as a form of social protection after losing their jobs.

The origins of labour market segmentation are linked to the rapid structural economic change

of the 1970s-80s. The shift from agriculture and manufacturing to services jeopardized the

employment of large numbers of older workers, whose skills became quickly outdated. The

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employees therefore needed protection from economic competition from the younger

generations, through high employment security as well as early retirement provisions. But the

unions were too weak to secure similar guarantees for all workers.

The implications for industrial relations are very important. First, trade unions struggle to

gain members among young workers, as long as these are on temporary contracts. Secondly,

inflationary tendencies may emerge when trade unions negotiate wage increases for their

members in permanent employment, as these may feel sheltered from competition and

therefore from unemployment risk. Despite the dual nature of the labour market, however, it

would be exaggerate to speak of an insider-outsider divide in industrial relations, because

insiders and outsiders are often members of the same households. Moreover, trade unions

have made some important, if not particularly successful, efforts to represent the ‘outsiders’,

especially temporary employees, youth and immigrants (Polavieja, 2001, De Franceschi et

al., 2012, Cerviño Cerva, 2003).(Polavieja 2001; De Franceschi, Pulignao et al. 2012)

The political system that was created with the Constitution of 1978 is a parliamentary

democracy, based on a proportional representation election system, corrected by small

regional constituencies that favour larger parties. This system has led to alternation between

two large parties: the socialist PSOE, in office between 1982 and 1996, and between 2004

and 2011, and the conservative PP, in office between 1996 and 2004 and since 2011. The

Spanish election systems, although not a first-past-the-post one, shows some similarity with

the majority ones that characterize liberal market economies (e.g. the UK). It also favours

large regional parties, as they exist in Catalonia, Basque countries, Canary Islands and

Galicia, and as a result, governments often depend for their majorities on agreements with

these regional parties. Rather than negotiations between Right and Left, as in proportional

systems (e.g. Germany), Spain therefore tends to rely on compromizes between centre and

periphery. The communist party, which was the most influential opposition force during the

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dictatorship, failed to go beyond 10-11% of the votes once democracy was introduced, and it

changed name into IU (Izquierda Unida). It tends to support trade union demands, but has

little weight in the national parliament.

The Spanish welfare state under Franco was very fragmentary and based on few paternalistic

policies (such as insurance against illness and accidents) with unequal coverage and a strong

male breadwinner orientation (Pons-Pons and Vilar Rodríguez, 2012). After democratisation

and the arrival to power of the socialist party in 1982, a more ‘European’ welfare state was

gradually developed and social expenditure kept increasing, even if it still remains relatively

low (24% of GDP in 2009, as against 28% EU average) and maintains some familistic

features (Naldini and Jurado, 2013). In particular, at the end of the 1980s unemployment

insurance was improved, providing coverage to up to 70% of the unemployed. Despite

restrictions on unemployment benefit entitlements being introduced in 1992 and 2002,

coverage was still quite high in 2011: during the crisis 65% of the unemployed were covered,

without substantial differences in coverage between men and women, except that men were

more often on short-term unemployment benefits, and women on the lower long-term ones

(data: Ministerio de Empleo y Seguridad Social). Unemployment benefits are slightly below

EU average: typical employees earning 67% of the average wage receive 80% of their last

wage for six months, and 33% for a further 24 months (OECD data). By contrast, Spain

spends little on Active Labour Market Policies: in 2004, less than one fifth than in countries

such as Netherlands, Denmark and Sweden.

THE COLLECTIVE ACTORS

Trade unions

Before democratisation in 1976, Spain had only had trade union freedom in the turbulent

years of the Second Republic (1931-39): the long periods without political and democratic

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rights explains, according to Lipset (1983), the radicalisation of both trade unions and

working class parties. The distinctive feature of the emerging Spanish labour movement was

the weight of the anarchist component, typical of rural societies where the distribution of

land, rather than the recognition of workers’ skills as in manufacturing, is of paramount

importance. Anarchist trade unions, under the confederation CNT (Confederación Nacional

del Trabajo) created in 1910, were particularly active until the civil war, and although they

failed to re-emerge as significant actors after 1976, their tradition is still visible in the strong

politicisation of Spanish trade unionism: it is primarily through political reform, if no longer

through political revolution, that trade unionists aim to improve employees’ working and

living conditions, rather than through collective bargaining. Hamann (2012) underlines how

exactly their particularly strong (although not exclusive) political emphasis allowed Spanish

trade unions to remain important actors in the last thirty years, despite organisational

weakness and the generalized decline of unions in Europe. Two aspects of Spanish trade

unions’ politicisation are particularly visible: their militancy in the public space, including

general strikes and demonstrations, and the role of horizontal, local structures devoted to

serving all members regardless of their professional status.

Union membership in Spain is one of the lowest in western Europe, at 16% in 2009 (data:

ICTWSS). It has followed a peculiar trend: after the return of union freedom in the 1970s and

the codification of union rights with the Estatuto de los Trabajadores of 1980 (inspired by

the Italian Statuto dei lavoratori of 1970) and the Organic Law on Trade Union Freedom of

1985, density slowly grew during the 1980s, unlike in the rest of western Europe, to then

stabilize at around 15-16% since 1990 (data: ICTWSS). Density is deeply unbalanced

towards the public sector (twice the average) and male workers (18% among male workers as

against 12% among the female). Union density in Spain however is a dubious indicator of

union strength. Trade unions have shown limited concern with it, because in a political, social

11

movement tradition what matters is mobilisation power, rather than organisation in terms of

structures and members. Moreover, state support allows unions, as organisations, not to rely

financially on membership contributions as much as it happens to unions in other countries.

State support takes multiple forms. Directly, it accounts for about 28% of unions’ budgets

(“Si se acaba la subvención sindical, falta la financiación de los no afiliados”, El País, 10th

April 2013) and it corresponds to the public function of signing legally binding agreements

for all employees. In addition, unions are legally entitled to facilities inside the companies (in

terms of paid hours for union activities inside companies, according to which union

representatives are informally called ‘liberados’), to the use of public buildings in proportion

to representativeness (as compensation for the expropriation of union properties during the

Franco dictatorship), and are included in the administration of public agencies for

employment, social security and health services. Thanks to a national agreement of 1992,

unions also manage lifelong training courses with business associations. This kind of state

support attracts however charges of parasitism and even corruption.

The most important form of state support comes from the Organic Law on Trade Union

Freedom defining the status of ‘representative trade unions’, which entitled to collective

bargaining rights on the basis of audience, i.e. election results in the works councils (Comités

de empresa) rather than membership. The threshold required by the law to be a

‘representative trade union’ is 10% of elected delegates at national, sectoral or regional level.

If a trade union reaches that threshold amongst the whole of the economy, then it is deemed

representative in all sectors, regardless of the results in each of them.

Two main trade unions have emerged as dominant after 1976: CCOO, with 1.2m members

and 39.1% of works council delegates, and UGT, with 0.9m members and 37% works council

delegates in 2011 (Baylos, 2012). These figures easily grant CCOO and UGT the status of

representative trade unions in all regions and in all sectors. Smaller trade unions include

12

regional ones (especially in the Basque countries and in Galicia), sectoral (e.g. CSIF, public

servants), and minority organisations (e.g. USO, moderate, and CGT, anarchist), and are

relevant only in some areas and/or sectors. Both membership and works council elections

results have been very stable in the last twenty years, despite a shift in the composition of

employment and therefore also of membership from manufacturing to services. The largest

sector federations within CCOO and UGT are those of metalworkers, transport,

administration, chemicals and construction.

The UGT (Union General de Trabajadores, General Workers’ Trade Union) was founded in

1888 in Barcelona by socialist workers: the socialist party, the PSOE (Partido Socialista

Obrero Español, Spanish Socialist Worker Party), had been founded nine years earlier, and in

this respect the UGT is typical of the ‘Latin’ model where political worker representation has

a historical and organisational priority over the trade union one, as opposed to the pattern of

liberal countries such as the UK.

CCOO (Comisiones Obreras, Worker Commissions) had a more atypical history. They

appeared spontaneously, at workplace level, in the 1960s after that the Law on Collective

Bargaining of 1958 had introduced elections of employee representatives to ‘company

boards’ (Jurados de Empresa), who were allowed to negotiate working conditions at

company level. While these reforms were not meant to liberalize employment relations, but

rather to stabilize state control over the workplace, employees were quick to exploit the new

channels to try to have more voice and representation on company matters, and with this aim

they started to organize informal worker commissions to influence the elections of jurados

and the process of collective bargaining. Quickly, the commissions became a network of

labour activists who built up relations with the strongest clandestine political force: the

communist party (PCE). In the early 1970s, workers’ discontent and assertiveness increased,

with a surge of work stoppages that contributed decisively to the end of the regime. CCOO

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emerged therefore as one of the most influential actors from democratisation. Its ties with the

PCE gradually declined insofar as the party failed to become a dominant force in national

politics, but organisationally CCOO maintained its decentralized, social-movement nature.

At the time of institutionalisation after the return of trade union freedoms in 1977, both

CCOO and UGT looked at foreign models: the UGT took German trade unions as a

reference, strengthening sectoral federation and a co-ordinated collective bargaining focus.

CCOO looked instead at the Italian CGIL, the largest leftist trade union in Western Europe,

and at its horizontal local structures and militancy patterns, and often mobilized workers at

workplace level, demanding improvements over the higher-level collective agreements

signed by UGT.

Despite the organisational and political differences in their formation, the two unions started

converging from the late 1980s, when the ruling socialist party had moved away from a leftist

program towards a moderate, economically liberal one, while CCOO had gained more

distance from the PCE. In 1988 they organized a joint successful general strike, by which

UGT marked its independence and distance from the PSOE. Over the 1990s and 2000s, the

convergence increased to the point where political differences between the two unions are

hardly visible. In 1994 CCOO reorganized their structure, strengthening sectoral

organisations over the territorial ones and increased centralisation, thereby imitating the UGT

model, and in 2000 they elected a more pragmatic and less ideological leadership, replaced in

turn in 2008, at the beginning of the economic crisis, by a more leftist one.

According to Crouch (1993: 269), the main feature of Spanish trade unions in the 1980s was

their low level of articulation. A product of their uneven historical evolution and of the

Spanish economic structure, poor articulation has remained a characteristic of Spanish trade

unions despite their efforts at organisational and collective bargaining centralisation. What

has changed within this disarticulation, as a consequence of re-organisation and economic

14

transformation, is the emphasis between levels. In the 1980s, the problem of low articulation

appeared as mostly one of workplace unruliness (especially by CCOO), and therefore of

central-level fragility. By the 2000s, trade unions had centralized their organisation and

established the practice of national agreements, but by then their workplace presence was

much more patchy and superficial than previously thought, and as a result not only company-

level bargaining, but even the control of local implementation of higher-level agreements was

troublesome.

In theory, Spain has the institutions for articulation and for effective employee representation

at the workplace level: it has a dual-channel system of representation like the German one,

although with fewer rights, through the comités de empresa, alongside legal rights for trade

union sections in the workplaces (entrenched in the Estatuto de los Trabajadores of 1980).

However, the system has some operational limitations due to structural and political reasons.

Structurally, it does not fit well with an economy where micro-companies are so prevalent:

employee representatives (delegados de personal) are only foreseen in companies with at

least ten employees (and also in those between six and ten employees, if requested by the

majority), works councils in companies with more than fifty, and statutory trade union

sections in companies with more than 250. As a result, the level of trade union coverage

(number of employees in companies where trade unions are represented), at 44%, is below

that of France and the UK, and it is strongly skewed towards larger companies. Politically,

neither side of the employment relationship has seen the comités de empresa as mainly a

channel for integrative, participative negotiations: the fact that they are used to measure union

popularity makes them an arena for union propaganda and identifies them as a trade union

expression – which in turn feeds employer hostility. As a result, very rarely in Spanish

companies the two institutional channels of representation (trade union sections and works

councils) are active at the same time (Lope and Alós, 1999). In practice, usually only one of

15

them is relevant: where only one union dominates, it is its union section; where unions are

plural, it is the comité. Despite the apparently high coverage rate of Spanish works councils

(56% in 2011), Spain can be considered as having a dual system of representation only on

paper. The absence of complementary institutions (from training to employee representation

in supervisory boards) and the orientations of the actors prevent a division of roles between

works councils and trade unions, and employee representatives have little influence on work

organisation.

The paradoxical result of the Spanish union structure is that during the 1990s and 2000s,

while the definition of working conditions was gradually decentralized and individualized,

Spanish trade unions centralized their action and relied increasingly on the state and on

politics: a strategy that only worked until the crisis that started in 2008.

Employer associations

Employer associational density in Spain is, at 75% (ICTWSS 2011), amongst the highest of

the EU, which is particularly impressive given that the country is characterized by a high

incidence of small and especially micro companies, which together employ 65% of the

workforce (EU average: 51%). The high level of density makes employer confederations

relatively strong organisationally and legitimate politically, especially if compared to the low

level of union density. According to Molina and Rhodes (2007), the organisational power of

Spanish employers vis-à-vis labour is one of the main factors differentiating Spain from Italy.

The reasons of strong association are to be found in the Francoist legacy of compulsory

association, as well as in state promotion and in the on-going need, for micro companies, to

share some costs and functions, especially the legal assistance.

As with the trade unions, the law requires employer associations to organise at least 10% of

the workforce at the national level (or 15% at the sectoral or regional one) to qualify as

16

representative organisations. This rule fosters strong centralisation and the prominence of

only two peak associations: CEOE (Confederación Española de Organizaciones

Empresariales) and the association of SMEs CEPYME (Confederación Española de la

Pequeña y Mediana Empresa). CEPYME is itself associated, since 1980, to CEOE.

However, centralisation and high associational density should not be seen as indicators of a

strong co-ordination of employers in industrial relations and politics. In fact, Spanish

business is characterized by diversity and dualisms and high density reflect a need to keep

this diversity under control. In this context, the association between CEOE and CEPYME

must be understood in relation to the structural need of large employers to include and control

the crucial SME sector, given its economic importance and its specific legal regulations

(Nonell and Molins López Rodó, 2007).

CEOE itself is not directly an association of firms: it is a confederation of over 4,000 sectoral

and territorial employer organizations. Some of CEOE constituents have specific identities.

Among the territorial associations, the most influential are the one of Madrid’s region, CEIM,

which expressed the President José María Cuevas for the long 1984-2007 period and is

considered as the most intransigent and politically conservative, and the Catalan one, Foment

del Treball Nacional (FMT), which had played a leading role in constitution of the

confederation in 1977 and since 2010 has expressesed the President, Joan Rosell. In some

occasions, FMT has pursued a more conciliatory line towards the trade unions, and supported

autonomous agreements at regional level that coincided with the interests of the Catalan

government (Aguar et al., 1999). In the early 1990s, in particular, FMT signed regional-level

agreements at a time when there was no tripartite consensus at national level. While territorial

agreements have been signed in other regions, including the one of Madrid, only Catalan

agreements have had real incidence in the system of industrial relations, for instance in 2005

on working time.

17

Fragmentation occurs also at sectoral level: given the erga omnes validity of collective

agreements in Spain, a common reaction of groups of companies disagreeing with the

existing agreements is to break away and constitute a new association, which will then

bargain autonomously. The fragmentation into subsectoral organisations seems to be

accelerated by inclusion into EU sectoral policies, which often define sectors in narrow

terms. Even if there are no public figures on the actual representativeness of many of these

sectoral and subsectoral employer associations, especially at provincial level, the legal status

of representativeness is presumed by the courts, until the contrary is proven (Alfonso

Mellado, 2011).

The CEOE has been exerting a centralising influence to counter fragmentation from the

beginning of the transition. When CEOE was created in 1977, the employers were

particularly concerned with the issue of widespread strikes that had accompanied the last

period of the Francoist regime and the transition. The concern with reducing protest explains

to a large extent the support of CEOE to the Moncloa pacts in 1977-78, which were effective

in controlling wage growth. Since then, engagement in tripartite social dialogue remained an

official orientation of the organisation, and in the early 1980s centralized pacts contributed to

reduce union militancy and weaken the links between grassroots and union officers. CEOE

also provided a measured support to EU integration in the 1980s, despite fears, based on

economic forecasts from the late 1970s and the sharp restructuring crisis of the same period,

that most of the Spanish economy was unfavourably placed to compete in a common market

(Martínez, 1993).

After the first period of important agreement, the influence and authority of CEOE over its

members has been threatened: many member companies, especially small, have only tenuous

links with the associations that in turn constitute CEOE (Aguar et al., 1999). To maintain the

prominence of a national level, CEOE kept focusing on the political level, engaging in

18

tripartite social dialogue, signing intersectoral bipartite agreements, and operating in the

Socio-Economic Council (CES). The endurance of CEOE is therefore explained by state

policy more than membership. Spanish employer associations, like the trade unions, are

indirectly supported by the state through not only the legal extension of collective

agreements, but also the funding of a number of services and bipartite bodies, for training,

education, employment services and health and safety. The lack of transparency on the use of

public funds, which are estimated to account for 70% of CEOE budget, have led to

suggestions, in the press, of financial mis-practice (e.g. ‘La CEOE, un gran negocio

engrasado con dinero público, Público, 10th October 2010). The legitimacy of CEOE was

affected by two scandals in 2012 and 2013: in December 2012, the former president Gerardo

Díaz Ferrán was arrested for concealment of assets and money laundering in his own

business, and in February 2013 the vice-resident (and CEIM president) Arturo Fernández was

charged with paying the employees of his catering company illegally, with undeclared cash

sums (‘Empleados del ‘número dos’ de la CEOE denuncian que les paga con dinero negro’,

El País, 11th February 2013).

In addition to business associations, in Spain there is also a system of local Chambers of

Commerce and Industry, with compulsory membership for all enterprizes, but they are less

influential than in Italy, France and Germany and play an important role only in some export-

oriented regions. Other more informal associations, the ‘Opinion Circles’ (Círculos de

Opinión) are also important and often promote more radical decentralisation policies than

CEOE.

THE PROCESSES: COLLECTIVE BARGAINING, REGULATIONS, CONFLICT

The Spanish system of collective bargaining is at the same time very comprehensive and very

disarticulated. Its nature is marked by the specific conditions of democratic transitions in the

19

late 1970s. The Spanish Constitution that was approved in 1978 and marked the return of

democracy included a strong promotion of collective bargaining: ‘the law will guarantee (…)

the right to collective bargaining between employee representatives and employers, as well as

the binding power of collective agreements’ (art.37.1). But the actual system of collective

bargaining has since been the contested terrain of numerous changes and legal reforms, which

have accelerated and deepened since 2010 under the pressure of the financial crisis.

Collective bargaining coverage in Spain is amongst the highest in Europe, at 85% in in 2008

(ICTWSS database). The coverage of company-level bargaining is however very low, at

around 10% (data: Ministerio de Empleo y Seguridad Social). Most of the coverage comes

from multi-employer agreements, whether at sector or provincial sector level. The high

coverage derives from the high associational rate of employers, but is further supported by

the mechanism of automatic extension erga omnes implicitly guaranteed by the Constitution:

all employees working in the domain of the agreement, regardless of whether they or their

employers are members of the signatory trade unions and employer associations, are legally

tied to the agreement. This form of extension, unique within the EU, is regulated by the

Estatuto de los Trabajadores of 1980 and occurs when agreements are signed by

representative unions and employer associations (i.e. covering more than 10% of employees

nationally). As a result, UGT, CCOO and the employer organisations associated to CEOE can

sign agreements of general validity. Since 1994, the law also foresees the possibility of

extension of collective agreements from a province or a sector to other provinces or sectors

where no agreement has been signed. Between 1994 and 2010, 93 extensions were approved,

mostly in the service sector (CCNCC, 2011).

High coverage and extension would suggest that the system is co-ordinated, centralized and

encompassing. But a systematic study of the collective bargaining structure carried out by the

CCOO in 2008 highlighted the paradox of a genuine interest amongst the main organisations

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for centralisation and rationalisation, coexisting with an enduring reality of decentralisation

and low articulation (Escudero Rodríguez and Mercader Uguina, 2009). While since 1997

CEOE and trade unions have signed intersectoral bipartite and tripartite agreements to affirm

the priority of national sectoral agreements and try to co-ordinate them with overarching

wage recommendations, these efforts have largely failed to bring order in the actual structure

of collective bargaining. A number of disparate agreements are signed at provincial, regional

and company level, without clear demarcation of issues between levels and between sectoral

domains, and with frequent repetitions. The enduring quantitative prominence of the

provincial level reflects the legacy of the administrative and control aims of the Francoist

union OSE, rather than any clear productive or employment structure, and it keeps being

supported by employers’ interests and trade union regional rivalries (Miguélez and Rebollo,

1999). In practice, little difference exists between provincial agreements within each sector:

in the 1990s, wage increases differed by province by only 0.25% (idem), but the

multiplication of local agreements contributes to the opacity of the structure, with confusing

repetitions and cross-references. In some provinces, employer organisations are too weak to

negotiate and delegate collective bargaining to legal firms, which reinforced the legalistic and

ritual nature of the process. Given the rule of ultraactividad (open-ended validity of

collective agreements until a new one is signed), a number of obsolete agreements,

sometimes more than 10 years old, coexist, and at the same time some economic and regional

areas remain uncovered, and in other there are disputes as to which collective agreement

applies (Alfonso Mellado, 2011). The content of collective bargaining has been evolving,

with in particular more attention to mechanisms of variable pay, but overall the agenda has

been characterized by continuity and weak responsiveness to social and economic change. In

2007, Spain, following the French example, introduced the legal obligation to include gender

equality in the collective bargaining agenda. However, a union analysis of 2011 on the

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‘equality plans’ that had been negotiated until then identified their content weakness,

especially on job classification which appears to be the ‘Achilles’ heel’ of Spanish collective

agreements in terms of equality between men and women – and also, as we will see, between

nationals and immigrants (UGT, 2011).

In case of agreements at different levels, the Estatuto de los Trabajadores foresees the

priority of the oldest. In theory, this means that company-level agreements cannot intervene

on matters already regulated by an existing sector agreement. In practice, however, company

agreements have been commonly prioritized whenever they improved employee conditions

(as it generally occurred given that company-level bargaining takes place mostly in large

companies), for the simple reason that in this case no side would be interested in invoking the

higher-level agreement. In this way, Spain applies an implicit ‘principle of favourability’, i.e.

the application of the most favourable agreement for employees.

The priority of sector-level agreements has been increasingly undermined. Since 1994,

company-level derogations (descuelgues) on wages and working conditions have been

allowed. This situation leads to disarticulation in two ways: firstly, there is competition and

confusion between different multi-employer agreements (sectoral and provincial): secondly,

decentralisation occurs in a non-coordinated way, in which higher-level agreements cannot

fix the limits of lower-level bargaining, nor affect already-signed company-level agreements.

According to the Estatuto de los Trabajadores, company-level agreements and derogations

from sector-level agreements become legally binding if they are signed by trade unions

representing the majority of the works council, which in most cases means UGT and CCOO

jointly. The patchy presence of trade unions in small companies and, even more, the strong

traditional hostility of small and medium employers against trade unions explain why

company agreements coverage has so far remained low, and derogations from sector level

agreements are relatively rare. However, the reform of 2010 has allowed company

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agreements signed by ad hoc employee representatives in case of union absence, which, with

the further reforms of 2011 and 2012 introducing the absolute priority of company-level

agreements over higher-level ones, opens up the avenue for much more disorganized

decentralisation (see Case 1). In addition, the reform of 2012 has significantly widened the

scope for unilateral changes to employment conditions (including wages and working time)

in case of economic difficulties: therefore, once an agreement expires (due to the end of

ultraactividad), employees will risk losing their established terms and conditions of

employment, and remain protected only by statutory provisions such as the minimum wage.

Trade unions fear that the changes introduced in 2010-12 will dramatically affect their

negotiation power, which has traditionally been concentrated on the sector level and large

companies, but is very weak within most companies, and that a ‘race to the bottom’ could

now start under employer pressure (Guàman Hernàndez and Illueca Ballester, 2012). There

are early indications that these fears are grounded: 2012, according to data from the

Ministerio de Empleo, has recorded the lowest number of new collective agreements since

the beginning of data collection in 1981, and the agreements signed have contained a lower

average wage increase than in 2011 (+0.98% as against +1.98%), despite similarly negative

economic conditions. According to Toni Ferrer of UGT, ‘where employers don’t want

collective agreements, collective bargaining does not progress’ (El País, 6th August 2012).

However, there are also places where it has been agreed to keep the ultraactividad, and where

employers are equally uncomfortable about ending collective agreements, as these often also

include some favourable concessions from the unions (as derogations from legal provisions),

and at least provide a widely accepted framework of predictability and governability (López

Parada, 2012).

Spanish collective bargaining, as well as its evolution, can only be understood within the

political history of the country: its structure, processes and general validity reflect both the

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formally state corporatist pre-democratic traditions, and the prominent concern with

governability at the time of democratic transition. Despite the collective rights introduced by

the Constitution and the Estatuto, the legalistic authoritarian and paternalistic legacy of

Francoist tradition remained visible and prevented collective bargaining to gain a leading role

in the regulation of employment. The administrative Ordenanzas Laborales, principal form

of regulation under Franco, were not abolished until 1994, when the new law on collective

bargaining attempted to create a more articulated system of autonomous regulation by the

social parties. But the transition from Ordenanzas to autonomous binding collective

agreements was gradual. In order to avoid the emergence of regulatory voids (which would

not be an issue in a voluntaristic industrial relations system, but clearly must have been

worrying for the Spanish government and for Spanish lawyers), the social partners were

explicitly authorized to prolong the validity of the Ordenanzas. To overcome cases of no

agreement between unions and employer associations, a National Consultative Commission

on Collective Agreements (CCNCC) was given the power of arbitrate. The result of this

evolution is that, even if collective bargaining did increase both qualitatively and

quantitatively after 1994, in practice agreements kept repeating, in substance and form,

existing or previous statutory regulations. Moreover, the reform of 1994 did not abolish the

remaining extensive legal regulations of employment, nor changed anything with regard to

the distribution of power within the enterprize: despite freedom of association and collective

bargaining, no form of codetermination was introduced and the employer maintained its

direction power within the organisation remained essentially unaffected (Valdes Dal-Ré,

2012).

As in most continental European countries, and in contrast to the British system, in Spain

there is a legal and linguistic distinction between legally binding collective agreements

(convenios) and more generic agreements or pacts, whether at the national, sectoral or

24

company levels (acuerdos and pactos), which directly reflects the importance of the law and

the state. The principle of automatic extension of the convenios makes the distinction more

relevant in Spain than elsewhere, which is in turn reflected by the prominent concern with the

law, resulting in more frequent legislative reforms than anywhere in Europe: 52 reforms of

collective bargaining and the labour market were passed between 1980 and 2012, i.e. nearly

two per year.

A partial exception to this framework of legalism, and at the same time the proof of its poor

governance effectiveness, is in the area of strikes. The Spanish Constitution of 1978

introduces the right to strike, within limitations established by the law, but the only law on

strikes remains the one introduced the year before during the political transition (the Royal

decree 17/1977). That decree, while legalising strikes, was still very restrictive and was

subsequently ruled unconstitutional in many of its parts in 1981. Subsequent governments

preferred not to touch this sensitive topic: the only timid attempt at legislative intervention

was made by the Socialist government of Felipe González, but quickly abandoned due to

resistance from UGT (at the end of 2012, after the second general strike of the year, the

conservative government threatened to legislate). As a result, strike statistics show Spain as

nearly constantly the EU country with the highest rate of days lost on strikes (data: ILO

Laborsta database). All sectors are affected by strikes, also due to the recurrence of general

strikes, with a prominence of mining, fishing, manufacturing, construction, transport and

public sector.

DIRECTIONS OF CHANGE, 1992-2012

As a new European Economic Community member since 1986, Spain has been particularly

susceptible to European influences. In the post-Franco situation, Europe had a symbolic

dimension inspiring modernisation and internationalisation, and European policies and

25

funding became particularly important. The Spanish social partners, in particular, profess a

strong pro-European orientation, although it is disputable how effectively they have engaged

with the European level organisationally.

Spain’s commitment to the European project explains why it accepted all conditions to

accession in the late 1970s-early 1980s, even though the social and economic costs of

liberalisation became immediately clear: unemployment rocketed to 24% and core

manufacturing sectors were decimated. But EC accession, eventually, appeared successful.

The same enthusiasm materialized again in 1992, when the Economic and Monetary Union

project was started, and Spain found itself in a difficult economic situation, with

unemployment at a record 25% and public deficit at 7%. Both the Socialist government of

Felipe González and the conservative government of José María Aznar that replaced it in

1996 enacted socio-economic reforms with decision, in order to meet the Maastricht criteria.

In 1996 Aznar reported to the Financial Times (30th September 1996) that he had rejected the

Italian Prime Minister’s Prodi suggestion that Italy and Spain should rather postpone their

entry to the EMU, due to the excessive social costs (Prodi has always denied to have made

this suggestion). By then, the Spanish government was already optimistic about the country’s

economic potential, something that would have peaked ten years later when, on the eve of the

economic crisis, Prime Minister Zapatero declared in an interview that Spain would overtake

Italy and Germany by GDP per-head by 2010 (El País, 15th January 2007).

While the socialist government had passed its first major structural reforms in 1992 and 1994

unilaterally, Aznar, as a conservative politician, preferred avoiding direct confrontation with

the largely leftwing trade unions.1 He opted for negotiations, which led to the signing of a

triple pact in 1997, covering collective bargaining, dismissals, and the replacement of

ordenzanzas laborales. Spain became in this way one of the prominent cases in the European

wave of ‘social pacts’ (Sala Franco, 2007, Pérez, 2010, Molina and Rhodes, 2011).

26

There is a debate on the incidence of tripartite negotiations on reforms that have been shaped

primarily by the government. According to Natali and Pochet (2009) and Pérez (2010), the

fact that in Spain social pacts had been signed by both pro-labour and anti-labour

governments proves their strong institutionalisation. On the other side, Molina and Rhodes

(2011) consider the Spanish pacts as less incisive than those signed in the same period in

Italy, Portugal, Ireland and Finland. Sala Franco (2007) speaks of a ‘placebo effect’ of

negotiations: the negotiations did not affect the actual content of the reforms, but their

perception, which improved their implementation: this would explain why the labour market

reform of 1997 had more success than the unilateral one of 1994.

After gaining an absolute majority in 2000, Aznar attempted more offensive policies, and

proposed reforms of unemployment benefits and collective bargaining. Both attempts failed.

The reform of unemployment benefits was largely repealed after a general strike in 2002,

while on collective bargaining both employer organisations and trade unions, fearing that the

proposed decentralisation would cause disruptions and unpredictability, reacted promptly by

signing a bipartite pact (Acuerdo para la Negociación Colectiva), which pre-empted the

reform plan (Sala Franco, 2007). Legal changes to collective bargaining would not be

discussed again until the economic crisis (see Case 1).

Concertation between government and social partners had a new period of prominence after

the arrival to power of Zapatero in 2004. The government signed a declaration for social

dialogue in 2004 (Declaración para el Diálogo Social) to propose a more dynamic and

institutionalized system of negotiations. The outcome included a number of important

agreements between 2004 and 2007, in particular on the labour market, on immigration, on

training, gender equality, minimum wage, health and safety, collective bargaining.

With the economic crisis, the relations between sides became much more unstable. In 2010-

12, tripartite agreements on some topics (such as on pensions in 2011 and on collective

27

bargaining in 2012) were followed by failed negotiations on others and three general strikes.

The reforms passed in 2011-12 open the way to radical change towards decentralisation of

collective bargaining, in a situation where union power, with unemployment at the record

level of 25% in 2012, is at its lowest level.

Spanish industrial relations have changed deeply in the last twenty years: the articulation and

coverage of collective bargaining increased between 1994 and 2007, but this was followed by

radical reforms that may change the overall system. We will now see how the processes of

internationalisations have contributed to this change.

EU

According to Falkner et al. (2005), Spain belongs to the ‘world of domestic politics’ group of

countries when it comes to implementing EU social regulations. The fact that Spanish ruling

parties have rarely had absolute parliamentary majorities explains to a large extent why

implementation is conditional on successful negotiations with smaller parties and/or the

opposition, but in addition to this, interest groups within Spain have also a determining

impact. With regard to industrial relations, EU initiatives are routinely discussed by the

tripartite Consejo Económico y Social.

EU initiatives on the labour market have not been a direct driver of Spanish reforms, at least

until 2010. The Spanish path of frequent legal interventions, centred on dualisation between

permanent and temporary employment and between large and small companies, had started

before even EEC accession, with the new labour laws of 1980 (the Estatuto) and the major

labour market reform of 1984, which institutionalized the importance of temporary contracts.

These were followed by unilateral reforms in 1988, 1992, 1994, which were indirectly

influenced by the EU, especially through the European Social Funds and through EMU

requirements

28

The 1997 reform by Aznar marked a shift to tripartite social pacts, in the same year when the

European Employment Strategy (EES) was launched. However, CEOE and union officers

responsible for EU policies are both positive that the 1997 agreement responded to an internal

political development that had started before the EES promotion of social dialogue on

employment policies. Also the EU encouraging of regionalisation coincided with, rather than

causing, the Spanish devolution of employment policies to the regional level.

Reforms accelerated in the 2000s, with a new General Law on Employment in 2003 and,

after the Socialist election victory of 2004, a number of tripartite agreements on the labour

market. The EES has influenced Spanish debates and policies, especially through the

catchwords of employability, adaptation and gender mainstreaming. However, the European

engagement of the actors remains rather limited, and the National Action Plans prepared

every year for the EES were more an exercise of ‘reordering’ national policies, than original

initiatives.

An intriguing case was the debate on flexicurity. While the concept of flexicurity was

strongly criticized by union experts who followed the EU debates, eventually the Spanish

union leaders in the ETUC did not oppose it in Brussels, probably in order to maintain their

‘good European’ reputation. The employer side was ready to exploit this concession, by

repeatedly reminding Spanish unions that they had now committed to flexicurity at European

levels and should no longer oppose the liberalisation of dismissals. As a CEOE officer told in

an interview, referring to the ‘joint analysis’ agreed by the social partners in 2007 (ETUC et

al., 2007):

[in Brussels] a sort of joint analysis [English in the original] of the labour market was

produced, and from there, a series of references to the concept of flexicurity were

included. That consensus at the European level was very useful in the internal context,

29

because our trade unions had always been opposed to the concept of flexicurity, and

had to accept it because their seniors, their European organisations, had accepted it.

And that is produced continuously. Right now we have tabled another process of

dialogue especially in relation to the Pact for the Euro, economic governance, and

there are elements in which, far from weakening the employers’ European positions, I

am convinced that we are going to see concessions from the European trade union

organisations, which are going to be very useful for us in the national context […] It

suits us that our trade unions moderate their discourse.

[CEOE officer, June 2011]

What is interesting in this quote is that some elements of the European discourse on labour

markets already in 2007 were paving the way for more European influence on Spanish

developments, which would become more clearly in 2011. The employers, who had been

long considered to be reticent to engage with the European level for fear of strengthening

trade unions Europe-wide, were now benefiting from stronger leverage with the European

Commission and used a multi-level system to produce advantages at national level. An UGT

officer confirms, from a different perspective, this reconstruction: union weakness at

European level undermined the stronger position that, in 2007, they had in Spain, and opened

up the possibility to use the flexicurity mantra against them.

In the first Zapatero term, 35 social dialogue agreements were signed […] Anything

could be signed, a magnificent example of social dialogue. But one should sign

agreements while keeping an eye to the European framework. Well, all union leaders

who were negotiating kept telling me ‘we [in Spain] are not affected [by Europe]

because we have our own Spanish agreements and that’s all that counts […] these

30

[flexicurity] principles are not going to affect us.’ Now, we were fully opposed to the

flexicurity principles […], I recommended the Spanish representatives in the ETUC to

vote against them, or to abstain. But the Spaniards in Europe think ‘[…] it is

unattractive to vote against’ and end up voting like the general Secretary […]. They

voted in favour […] they approved it as if to make a personal present for Socrates

[Socialist prime minister of Portugal, at that time holder rotating president of the

European Council] […]. What happened, is that now they can easily repeat it every

day, they can just pull out the word flexicurity and say all the idiocies they say. [UGT

officer, June 2011]

The discussion of flexicurity in Spain had little effect on the security side, although some

steps were taken by the Zapatero government to promote the transition from temporary to

permanent contracts (Pérez Rey and Trillo Párraga, 2010). The European Commission’s

recommendations for the National Action and then Reform Plans, however, have had little

impact on Spain. The government only provided the social partners with its proposals few

days before submitting them, making any social dialogue impossible. The leftwing trade

union CCOO repeatedly registered its opposition to the National Action/Reform Plans, but to

no effect. Overall, the government proposals were more exercises in ‘re-ordering’ existing

policies than real novelties. A Spanish expert defined the first Spanish National Action Plan

as nothing more than ‘old wine in new barrels’ (Cachón 1998).

In the 2000s Spain was witnessing a spectacular improvement in the employment figures. It

is however dubious that such an improvement has been led by European policies, or even by

the Spanish reforms. The sector that has driven the employment growth has been

construction, accounting for a peak of 14% of total employment, twice the EU average,

especially after liberalisation of land use and finance under the Aznar government. The

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decrease in the unemployment rate is partially due to demographic factors (smaller new

cohorts), whereas the increase in employment, like in Italy, has been driven by immigration.

The two years with the sharpest increase in the employment rate, 2001 and 2005, followed

the largest regularisations of undeclared immigrants: regularized foreign workers accounted

for around two thirds of the new jobs in both years. The employment rate of immigrants,

before the crisis, was much higher than for Spanish nationals (77% vs 57%).

During the apparent miraculous period of growth during the 2000s, the influence of the EU

was therefore indirect, as in the ‘internationalisation of concertation’ (Sala Franco, 2007): the

agenda of national social dialogue included more and more items coming from Europe.

It was only with the Eurocrisis starting in 2010 that the EU influence on Spanish industrial

relations became very direct (see Case 1). One channel of influence was the Bank of Spain, as

institutionally tied to the European Central bank. In 2011, the Head of Research of the Bank

of Spain wrote:

Two institutional features of the Spanish labour market (dual Employment Protection

Legislation and the prevalence of sectoral collective bargaining) […] have fuelled

employment destruction and the increase in unemployment, and […] constitute, to a

large extent, the main reasons of the dismal performance of the Spanish labour

market. (Jimeno, 2011: 3)

Both of these institutions came under direct pressure from the EU. On Employment

Protection legislation, the EU promoted its liberalisation through a flexible ‘single open-

ended contract’ that would overcome labour market segmentation, as proposed in the

‘Agenda for New Skills and Jobs’ (European Commission, 2010): in 2011 European

Commissioner Laszló Andór directly advertized the single contract as possible solution to

32

Spanish unemployment (El Economista, 26th April 2011). With regard to wage setting, the

recommendations to Spain prepared by the European Commission in 2011 included, at nr 5:

complete the adoption and proceed with the implementation of a comprehensive

reform of the collective bargaining process and the wage indexation system to ensure

that wage growth better reflects productivity developments as well as local- and firm-

level conditions and to grant firms enough flexibility to internally adapt working

conditions to changes in the economic environment. (European Council, 2011: 4)

These recommendations, together with requests from the European Central Bank in exchange

of a program of Spanish-bonds purchase, were the direct driver of major reforms of the

labour market and collective bargaining in 2010-12, even though the ‘single contract’ was not

adopted (see Case 1). If fully implemented, these reforms would change the core of Spanish

industrial relations, i.e. multi-employer bargaining and a segmented labour market with a

high degree of legal protection for permanent employees. Some early signs, however, suggest

that traditional social arrangements are still resilient. On collective bargaining, associations

have not stopped signing collective agreements, e.g. the national agreement on wages in

January and a sectoral agreement in construction at the beginning of 2012. On labour market

segmentation, despite the official aim of reducing it, in fact in Summer 2011 the government

had to re-introduce facilitation for temporary contracts: it could not find any way out from

flexibilisation at the margins as the default Spanish response to unemployment since 1984.

And in 2013, the conservative government suggested to promote temporary contracts even

more (El País, 24th February 2013). Moreover, the new austerity policies reinforced some of

the traditional familistic arrangements: in August 2012, the income of parents was included in

33

the calculation of eligibility for job-seeking allowances after 2 years unemployment, ratifying

a move back from the welfare state to family solidarity.

In addition to EU influence, the crisis also added more weight to cross-national comparisons.

References to the German and Austrian systems became particularly strong. In 2011, the

government and the Economic and Social Council considered in-depth the suitability of the

Austrian unemployment insurance system, but eventually dismissed it because of the

financial cost. The CEOE multiplied its references to the Hartz reforms in Germany, and in

our interview a CEOE officer repeatedly mentioned German solutions, especially with regard

to the freedom of dismissals in small companies. The influence of the German government

was particularly visible in early 2012: Rajoy met Angela Merkel short before announcing the

reform, while refusing to meet Spanish trade unionists, to the point that in July 2012 the

leaders of the two confederations CCOO and UGT demanded and obtained a meeting in

Berlin with Merkel to express their concerns.

Multinationals

Multinationals’ have a strong economic weight in Spain. Foreign investment, which was

already significant under Franco, was boosted by democratisation and European integration:

the ratio of FDI stock on the GDP and the weight of FDI in capital formation are amongst the

highest in Western Europe, and second only to the UK amongst the six countries we are

considering. The share of private employment in foreign companies, at 20%, is high but not

so outstanding, indicating that most foreign multinationals operate in capital-intensive rather

than labour-intensive activities, especially in manufacturing and in the export sector.

Importantly, multinationals account for 26% of R&D investment in Spain (Susaeta and

Belizón, 2011). The two dominant sectors for FDI are large chain retail and automotive

production (data: Ministerio de Economía y Competividad). Spain hosts 18 car assembly

34

factories, of 10 different producers, all foreign, and 90% of the vehicles are for export. With

deindustrialisation, the share of employment in foreign companies has declined in the last

decade. There are also many important Spain-based companies, largely oriented towards

Latin America.

Given Spanish legislation, multinationals are generally covered by the legally binding

collective agreements. In fact, due to their large size and concentration in manufacturing,

collective bargaining coverage is higher for them than for Spanish companies (Marginson and

Meardi, 2009). But the relatively modest provisions of sectoral collective agreements are

generally easy to meet for large multinationals, which tend to provide significantly higher

wages. In fact, despite the de jure priority of sectoral collective agreements over company

ones until 2011, legal commentators mention precisely multinational companies as examples

of the decentralisation de facto of Spanish collective bargaining.

Whatever the law says, the priority has always been given to company agreements. It

happens that these agreements have always been signed in large companies, and it has

always been unthinkable to contest them to give the priority to the sectoral agreement.

In a conflict between the agreement of Renault, and that of metalworking in

Valladolid, nobody would doubt about applying the one of Renault’ (López Parada,

2012: 34).

Multinationals are therefore particularly prominent in second-tier bargaining, playing often a

pioneering role on issues such as variable pay, flexible working time and temporary agency

workers. In wage negotiations, multinationals are more likely to engage in wage comparisons

with other countries. In the 1980s and 1990s Spain was seen as a profitable country in terms

of labour costs, but although this advantage was largely wiped out by EU enlargement in

35

2004, with the economic crisis some foreign investors have taken new opportunities in the

country. In 2012, Renault, while planning 7,000 redundancies in France, announced new

investment and the creation of 1,300 jobs in Spain. This happened after the company had

obtained concessions from the Spanish unions, including wage moderation and longer

working hours, something that was underlined by Prime Minister Rajoy as a success of his

labour market reforms (El País, 19th November 2012).

Moreover, some multinational companies exploit a loophole in the apparently encompassing

system of collective agreements, by subscribing to agreements of different sectors instead of

the (more taxing) agreement that corresponds to their activity (Marginson and Meardi, 2009).

This expedient is however not specific to multinationals: Spanish companies are known to

attempt is as well, for instance in construction (see Case 2). The degree of discretion on

collective agreement does not mean that multinationals operate in a loose environment: they

are in fact object of particular attention from trade unions and subject to legal and industrial

actions more frequently than domestic companies (Marginson and Meardi, 2009).

FDI into Spain is mostly from Western European countries: Netherlands and France are in the

first places as countries of origins of FDI stock up to 2010 (data: Ministerio de Economía y

Competividad). Investment from US and Germany is not as prominent quantitatively

(respectively, 7% and 10% of total FDI stock, and 92,000 and 141,000 employees), but is

very visible politically. US investors were already influential under Franco, and the SEAT

take-over by Volkswagen in 1986 was the most important foreign investment in

manufacturing.

According to a survey of 240 multinationals in Spain, subsidiaries in the countries enjoy a

high degree of discretion in their Human Resources functions, especially on pay, and the ones

from the US or from other extra-European countries are the least autonomous (Susaeta and

Belizón, 2011). A major investigation by a team led by Anthony Ferner on American

36

multinationals in Europe in the early 2000s found that US employers had mixed approaches

to industrial relations in Spain (Colling et al., 2006). On one side, they had to comply with

legally binding collective bargaining and statutory employee representation. On the other,

they minimized their influence. The provisions of multi-employer collective agreements did

not matter much to most MNCs, which were rather ‘high-road’ investors offering better

conditions regardless: ‘the paucity of sector-level bargaining left plenty of scope to mould

firm-level settlements’ (Colling et al., 2006, 109). At company-level, American companies

elaborated strategies to reduce union influence, including threats of withdrawing concessions

if unions are involved, minimalistic consultation of works councils, and union-substitution

HR policies (ibidem). During a dispute over restructuring, ‘the worldwide Ford company

president called the unionists ‘pirates’ and threatened to close down the Valencia plant’

(Hauptmeier, 2012: 746). The research by Ferner and colleagues reported that some

distinctively American corporate culture and management style were visible, but effectively

resisted by local cultures and informal arrangements (Almond and Ferner, 2006). For

instance, diversity management, although much more frequent in American subsidiaries than

in other multinational companies (Susaeta and Belizón, 2011), appeared to be neglected by

local managers, and even opposed in the case of targets for women in management positions.

Spanish managers even ridiculed some aspects of diversity management as parochial US

concerns, as in the rather extreme example of a company’s anti-harassment policy requiring

the reporting of Ku Klux Klan activities from all its worldwide operations (Ferner et al.,

2006, 161).

Studies on German companies in Spain suggest that some ‘Germanness’ is preserved, but not

always with positive results (Dickmann, 2003). German investors are uninterested in

transferring home-country industrial relations, because the increase in managerial

prerogatives outweighs the advantages of co-determination: as a manager put it, ‘we do not

37

tie a millstone around our necks’ (Dickmann, 2003: 274). Transfer of HR policies is limited,

and investment in training and skills is lower than in German sites.

Volkswagen’s influence on company-level industrial relations was particularly marked. In

1993, during an economic recession, the headquartered dismissed SEAT’s president and took

direct control of labour relations in its plants (Hauptmeier, 2012). After a large-scale strike, it

proceeded to the largest collective redundancies in Spain since democratisation: 11,020 jobs

were lost, and with them the old guard of union militants, shaped by the struggle against

Franco. In the following years, SEAT recruited a generation of younger, more skilled and less

ideological workers, which made it possible to develop more participative industrial relations

with much higher standards of information and consultation than Spanish average. Integration

of Spanish union reps into the Volkswagen EWC contributed to the ‘Germanisation’ of

company industrial relations (including the flexibilisation of working time). The factories

remained under strong competition pressure, especially after a relocation of part of the

production to Slovakia in 2002 (ibidem).

Both foreign and home-based multinationals are key players in CEOE: the large ones are

directly members of the peak organisation, rather than affiliated to its sectoral and regional

constituent associations, and thereby involved in national issues. Our interviews at the CEOE

name IBM as a particularly influential foreign company, with a strong interest in promoting

labour market reforms. The German and American Chambers of Commerce’s influence is not

particularly noticeable. The German one provided some advice on the possibility of

introducing the dual system of vocational education. The American one criticized the Spanish

labour market in strong terms, and supported the labour market reforms of 2012, asking for

even more changes in collective bargaining and employment protection.

It can be concluded that multinationals interacted with the historical evolution of Spanish

industrial relations. On one side, they adapted their strategies and practices to the evolution of

38

Spanish unions’ views of multinationals: the perception of them as ‘villains’ and imperialist

supporters of authoritarianism under Franco, gave gradually way to a more positive

appreciation as potential partners in modernisation, during the 1980s and 1990s (Guillén,

2000). On the other side, large, visible MNCs with specific strategies towards labour, such as

Ford and Volkswagen, and more recently Renault, contributed to the same development,

acting in some cases as catalysts of change (Hauptmeier, 2012).

Migration

Spain only became a net immigration country in 1986. Between 1986 and 2000 immigration

grew steadily despite a restrictive immigration regime, compensated by periodic

regularisations (five between 1986 and 2001). Between 2000 and 2008 the number of

employed immigrants grew almost five-fold, by far the largest increase in the EU, but arrivals

slowed down significantly after the beginning of the crisis in 2008. In two decades a half,

immigrants’ share of the workforce had increased from nearly zero to 15%.

The labour market orientation of immigration is clear in Spain, where asylum is of very little

importance and family reunion rather recent: the economic activity rate of immigrants in

Spain is, at 77%, 20 points above that of nationals. Immigrants are also geographically very

mobile, in contrast to natives: according to the survey on work and life quality (ECVT, 2007),

29% of immigrants, as against 10% of Spanish nationals, are ready to change residence to

work. Two sectors where strong new demand for labour has been met by immigrants in the

mid-2000s were construction, due to a speculation bubble (see Case 2), and care, due to an

ageing population, increased female labour market participation and public policies

subsidising care work.

Since 2000, the criterion of the ‘national employment situation’ has been placed at the centre

of migration policy, but the inflow of undocumented foreign workers foreign workers never

39

stopped, due to enduring demand for migrant labour in construction, agriculture and tourism,

where undeclared employment is particularly frequent (around 20% of the total, judging from

the gap between LFS and Social Security data). With regard to construction, migration itself

had the effect of increasing both supply and demand for labour (because of increased demand

for housing), exacerbating the overall volatility of the Spanish economy. Between the mid-

1990s and the mid-2000s, the number of homes built in Spain doubled (from around 350,000

to about 700,000 per year), at the same time as the population increased by around 4m mostly

due to immigration. Between 1998 and 2003, the share of immigrants among home-buyers

increased more than four times, from 12% to 51%, and remained above 50% since then

(Oliver, 2006).

The Law 8 of 2000, passed with the support of the left-wing opposition and small

government coalition parties against the vote of the ruling conservative Partido Popular,

marked a policy shift by introducing measures for the integration of immigrants and the

recognition of their social rights. In 2004, employers and unions agreed in the tripartite

Economic and Social Council a joint report on the need to regularize undeclared immigrants,

and supported a labour market-oriented immigration policy (CES, 2004). These proposals

were implemented after the 2004 elections by the new Socialist government, through

extensive social consultation and with a strong union imput, with the Decree 2393/04. Trade

unions were concerned with undocumented immigration: ‘First, keeping a mass of workers in

a clandestine situation means that all the legal declarations, all the constitutions are useless;

and they you get downward pressure on wages’ [UGT officer, June 2011]. The outcome was

the regularisation of around 600,000 immigrants, much larger than the previous ones.

Regularisations may be seen as an integral way in which the Spanish labour market and

immigration interact, rather than a contradiction between the two: acceptance of an informal

channel of recruitment for a largely informal and segmented economy (Cachón, 2009). After

40

2005, no more amnesty was agreed, but regularisations can occur at any time for foreigners

with ‘social and economic ties’ to the country, i.e. with two years residence and legal

employment or with family ties. A peak in such regularisations was reached in 2009 with

82,300.

In 2004, the immigration system was re-organized around three main channels of entry: the

‘general regime’ for workers with already an employment offer; the ‘contingent’ set every

year according to employer needs; and a residual possible contingent for job-seekers, which

betrayed the government’s optimism on the Spanish labour market’s absorption capacities. A

Tripartite Labour Commission was created, with the task of negotiating the yearly

contingents at the regional level, on the basis of a ‘Catalogue of occupations of difficult

coverage’, produced by local administrations. The Spanish system since 2005, therefore,

displays strong corporatist elements, at least at the official level. However, a large number of

entries still occur through other, less regular, channels. Moreover, trade unions either refuse

to negotiate the number of immigrants to include in the contingent, or try to reduce it as much

as possible [interviews with CCOO and Foment officers, June-July 2011]. For instance, in

Catalonia the CCOO contests the system as not serious:

The argument is not on the numbers, but on the method. With one or two weeks of

notice, the King sends a note, saying that he wants the Catalan proposal [for the

contingent] within a week, and this is not possible. So the employers say that can’t do

it, but eventually make a proposal, I don’t know how. And we as CCOO, we always

abstain, because we don’t have the data to discuss numbers. The comrades from UGT

vote always against, and the proposal is approved with the votes of the regional

government and part of the employers […]. So the Catalan proposal goes to Madrid,

and Madrid often changed the numbers, and we in Catalonia criticise the government

41

for modifying the Catalan proposal […]The employers one day they say they can’t

answer, the next day that their numbers are a scientific analysis. For us, the contingent

is a farce, nothing serious. [CCOO officer, July 2012]

The system of contingents failed as a means to favour more long-term migration: in 2004-08,

although 2/3 of the contingent was meant for permanent-contract employees, 91% of

immigrants employed through the contingent were on temporary contracts, and 68% of them

in agriculture (Cachón, 2009). Employers can recruit through the contingent only if they offer

at least ten jobs, which is unsuitable for small and medium enterprises except in sectors, like

agriculture, where strong business associations can combine multi-employer offers. Also the

‘general regime’ proved impractical and ineffective, because the required employment

contract before the migrant’s entry is unrealistic (Boado and Ferrer, 2008). The temporariness

of immigrants is confirmed by the nature of residence permits, of which, in 2008, 59% were

temporary and only 41% permanent.

As a result of these policies, immigrants have concentrated in insecure jobs. The implications

became apparent during the economic crisis: between 2007 and 2011, unemployment grew

from 7.9% to 19.5% among Spanish nationals, but from 12.4% to 32.7% for foreigners. The

increase has been particularly dramatic for foreign men, reflecting the role of the construction

sector in the Spanish crisis and in foreigners’ employment (see Case 2). The situation is made

worse by the fact that a large number of migrant workers are not covered by unemployment

insurance due to insufficient contributions: in 2009 they made 14% of people on

unemployment benefits although they were 19% of the unemployed (Tobes Portillo, 2011).

According to Cachón (2009) immigrants are, in all sectors, more likely to work with

temporary contracts than Spanish nationals (50% against 25% in 2008).

42

Following the crisis, there has been a turning point in migration policy, although with modest

effects. In 2008, the government introduced an ‘incentive to voluntary return’, hoping to

convince 100,000 immigrants to leave. However, only about 5,000 took the offer. In 2011, as

a unique case in the EU, Spain reintroduced transitional arrangements to limit intra-EU

labour movement (from Romania). The conservative government elected at the end of 2011

immediately announced restrictions on regularisations, visas and recruitment from abroad,

except for temporary jobs.

Spanish trade unions responded to immigration in a very political way combining a strong

ideological commitment to internationalism and class solidarity with the focus on state-

sponsored services. The political commitment to solidarity had its roots in declarations from

the 1970s, when Spain was still an emigration country and such standpoint contrasted with

the more restrictive attitudes of most western European unions (Cachón, 2000). It took the

form of political pressure at the national level for regularisation, but with little propensity to

share responsibilities in the implementation of migration policies and some inconsistencies:

in 2006, Spanish unions advocated restrictions to the freedom of movement of Romanian and

Bulgarian workers (Pajares, 2011).

The CCOO quickly adapted their traditions of organising services to Spanish emigrants, by

transforming their centres of information for emigrant workers to centres of information for

foreign workers (CITE) (Martinez Lucio and Connolly, 2012). UGT did something similar

with the Centros Guía de Atención a Inmigrantes. These centres provide important services

to migrants, but rely on state funding and only occasionally translate into organising. Offers

of the CITE of Barcelona [our interview, July 2011] estimate that 15-20% of foreigners who

come to the centre join the union, but this may be overestimated.

Moreover, the strong national centralized tradition of Spain, despite the recent

decentralisation and centrifugal pressures, makes Spanish unions reluctant to embrace

43

diversity discourse and any separate form of organisation, although there are often good

relations between unions and ethnic associations. As a result, the unions have largely failed to

organize foreign workers, and the gap in unionisation between nationals and foreigners is the

largest in western Europe (16% vs 6%, according to the European Social Survey 2008). Trade

unions were also very slow, despite their strongly solidaristic attitude towards foreigners, to

include non-discrimination clauses in collective bargaining (Cachón, 2000). As an outcome,

if the servicing and political activity achieved some results with the 2000 law and the 2004

regularisation, it did not stop the increasing marginalisation of migrants and collective

bargaining, despite near-universal coverage, did not prevent segregation of foreigners in the

lowest grades of job classification (Richards, 2009). Overall, solidarity towards immigrants

was for Spanish unions more a matter of natural continuity with ideological traditions, than

the outcome of debate and analysis (Pajares, 2011).

Immigration appears to have combined with, and exacerbated, the segmented, decentralized

and informal nature of the Spanish labour market. On one side, it certainly helped the fast

labour market integration of Spanish women in formal employment, at a time of rapidly

increasing education levels. On the other, the strong gendered division of labour was partially

replaced by an ethnic one. Formally, migration is strongly regulated by the state and subject

to control by the social partners, but reality is quite different. The proclaimed border closure

until 2004 was hiding tolerated undocumented labour immigration, while the strong labour

market demand orientation since 2004 was already out of step with the changing economic

conditions and provided little control of the actual fluxes, and in particular no control over

returns.

CONCLUSION

44

The developments in the 1990s-early 2000s had apparently falsified Crouch’s (1993)

evaluation of Spanish industrial relations as disarticulated and therefore not corporatist: the

wave of social pacts, associated with European policies and increasing foreign investment,

could be seen as a form of corporatism, possibly of a ‘competitive’ kind (Rhodes, 2001).

However, later developments vindicated Crouch’s analysis and stressed the importance of the

other aspect of Spanish industrial relations: weak unionism. Spanish trade unions might

appear vocal in politics (Hamann, 2012), and certainly contributed to the political agenda, for

instance on the welfare state and on immigration. However, unionisation remained patchy,

dependency on the state relatively high, and the negotiation power was never strong enough

to guarantee that formal corporatist institutions (encompassing collective agreements,

tripartite negotiations) would fulfil their functions in a stable and balanced way. Towards the

end of the decade, economic sociologists therefore realised that Spain was actually moving

towards a form of ‘Mediterranean neoliberalism’ (Banyuls et al., 2009). The hasted reforms

of 2010-12, during the crisis and with direct interference from the EU, accelerated this

process and moved Spain towards the status of a peripheral/dependent liberal market

economy.

A specific implication of Spanish labour’s weak horizontal and vertical articulation (i.e.,

confused links between levels of bargaining, and uneven coverage across regions and sectors,

especially with regard to SMEs) has resulted in the path of labour market reforms at the

margins: youth, immigrants, and to a large extent women entered the labour market with

significantly fewer rights. This process, which started in the 1980s, was continued despite the

increasing rhetoric on flexicurity and on overcoming segmentation: rare reform efforts to

reduce dualisation were never sufficiently convinced, and in situations of crisis governments

always reacted by promoting temporary employment as last resort. A process that started as a

consequence of union weakness (rather than of union policies, as these had tried to be

45

inclusive), became itself a factor of further union weakening and delegitimation: even core

workers’ negotiating power was negatively affected by the large supply of less protected

workers. An alarm bell rang in 2011, when the social movement of the indignados revealed

the social distance and tensions between youth and trade unions.

But also the state traditions of Spain explain the trend. The intensive legislative activity of the

last twenty years, and especially the swift and radical reforms as those of 2010-12, were only

possible because of a tradition of legalism, administrative controls, and centralised executive

power. As it often happens in history, a liberal economy has been built with statist means.

46

Case 1

Reforms under external pressure, 2010-12

Labour market liberalisation in Spain started soon after the end of the authoritarian Francoist

system. Temporary contracts were liberalised in 1984, and multiplied from half million in

1984 to over 8 million in 1996. More reforms were introduced in 1988, 1992, 1994, 1997 and

2003.

But the process of flexibilisation accelerated with the economic crisis that started in 2008,

whose effects have been particularly sharp in Spain. While the GDP fall in 2009 less than in

most EU countries, unemployment quickly more than doubled from 9 to 21%, reaching 25%

in 2012. With a fast rising budget deficit, the country soon had to face financial market

pressures. During the first Greek crisis, the Socialist Prime Minister Zapatero operated a U-

turn in economic and social policies to introduce, in May 2010, an austerity budget that, for

the first time since democracy, involved wage cuts for public sector employees.

The Bank of Spain, in association with the European Central Bank, started exerting strong

pressure for liberalisation. Certain reforms, including collective bargaining and labour

market, were demanded as ‘symbols’ of recovery. In particular, the Bank of Spain has

promoted the introduction of a flexible ‘unique employment contract’ to overcome the

dualisation between permanent and temporary contracts, and the decentralisation of collective

bargaining. There is little evidence that such reforms could help Spain: actually, the drastic

fall in employment shows that the Spanish labour market is, if anything, excessively flexible

numerically. Also, the derogation from multi-employer collective agreements’ pay rates (the

discuelgue salarial) had been possible since the reform of 1994. As a matter of fact,

collective bargaining has also been responsive, if not immediately in 2008, certainly in 2009-

10 (Martín, 2010). Moreover, these requests for radical deregulation that come from the

47

European Central bank through the Bank of Spain do not even correspond to the interests of

Spanish employers. The employer federation CEOE does not support the ‘single contract’,

which is also rejected, in the Barómetro de Empresas surveys, by nearly half of the

employers themselves. The status of ‘permanent employee’ is a very important tool for the

management of human resources in the structurally segmented Spanish labour market and

Spanish companies, as proven by the lack of success, despite financial and legal incentives,

of any intermediate contractual form such as the ‘special contracts for the promotion of

permanent employment’ (contratos de fomento de la contratación indefinida), which tend to

be rejected by employees as ‘second-class’ contracts. With regard to collective bargaining,

Spanish SMEs are not ready for company-level negotiations and therefore need the external

reference of a multi-employer agreement, even if as flexible as possible.

The Spanish government responded to the crisis by launching a series of labour market

reforms. The first major reform, announced in June 2010, which significantly eased the

preconditions and costs for lay-offs and for the discuelgue salarial, added incentives to the

contratos de fomento de la contratación indefinida and liberalised temporary work agencies

in sectors where they were banned, like construction. Trade unions opposed the reform but

could do no more than calling a largely ritual general strike on the 29th of September, which

had no perceivable impact. In February 2011, a tripartite agreement was passed to reduce

pensions and to start negotiations on a collective bargaining reform. Negotiations on that

reform proceeded well until May, and all parties were expecting an agreement. However, at

the end of May they collapsed, after the most hard-line component of the employer

confederation CEOE, the Madrid region’s employer federation CEIM, withdrew from the

concessions already made. The unions treated this as ill-will negotiating and talks collapsed.

The immediate reasons for the negotiation failures were political: a triumph of the Right at

48

the local elections of the 22nd of May, and radicalisation of the Left under pressure from the

spontaneous movements of the indignados.

In the absence of agreement, the government decided to legislate unilaterally, although

through ‘arm-length negotiations’ with employers and unions. The final bill downgraded

provincial agreements (which are important in some sectors without national agreements, like

construction) and limited the automatic prorogation of agreement, opening up the possibility

for worsening employment conditions over time. At the last minute before the parliamentary

vote, in order to obtain the crucial vote of the autonomist parties of Cataluña and the País

Vasco, the government introduced the principle of superiority of regional collective

agreements (autonómicos), which actually was an unpleasant surprise for both trade unions

and employers. Overall, the reform preserved multi-employer bargaining, while opening up

more possibility for derogation, subject to arbitration in case of union opposition.

It was far from a definitive reform. Due to financial pressure, as soon as in August Spain had

to take new crucial steps as requested by the ECB. It quickly amended the constitution to

introduce the budget balance principle, which is particularly striking given that the Spanish

Constitution of 1978 had only been amended once, in 1992, and was considered as close to

untouchable. In relation to the labour market, on the 26th of August the government

announced a further reform that facilitates temporary agreements, resulting in a U-turn from a

reform of 2008 and the flexicurity principles of reducing labour market dualisation.

Facing increased unpopularity due to the crisis and the austerity measures, the Socialist

government announced snap elections in November 2011, which were won by the rightwing

Partido Popular. The new government moves swiftly to implement reforms, starting from

austerity measures and then, in February 2012, labour market and collective bargaining

reforms. In the meanwhile, at the end of January, the trade unions signed a new national

agreement on wages with the employer, demonstrating once again the responsiveness of

49

Spanish collective bargaining to worsening economic conditions. However, the agreement

did not slow down the reforming impetus of the government. The reform of February 2012

introduced a variety of measures. Firstly, an employer unilateral prerogative to introduce

‘internal flexibility’ (changes in job tasks, location and timetables), without the need for

union or works council consent. Secondly, a new employment contract form, ‘the contract of

support to entrepreneurs’ (contrato de apoyo a los empredadores), foreseeing one year

probation without employment security (similar to the contrat nouvelles embauches which

the French government had tried to introduce in 2005, and which had been rejected to the

ILO). Thirdly, the reduction of compensation for dismissals, including for the easiest

‘unexplained’ dismissals (from 45 to 20 days per worked year), the removal of the ‘bridge

pay’ for dismissed employees waiting for a court ruling, and the removal of administrative

permission for collective dismissals. Fourthly, the absolute priority of company-level

agreements over multi-employer ones, and the employer prerogative to reduce wages without

union consent, subject to arbitration. Fifthly, the reduction of the time extension

(ultraactividad) of collective agreements, until now indefinite, to a maximum of two years,

after which all established rights from previous agreements terminate until a new agreement

is signed (in Spain, some agreements have been extended for up to ten years).

With regard to collective bargaining the main shift is the one towards decentralised

agreements. RD 7/2011 established the priority of company agreements, and the 2012 reform

by Rajoy makes this priority undisposable (inchangeable through agreements by the parts),

although this was already a logical consequence of RD 7/2011 (López Parada, 2012). In

practice, the priority was always to company agreements, which are usually in large

enterprises, and deviation from sectoral wage minima had been possible since 1994. But

following the reform, in small companies agreements can be reached to avoid the sector ones,

with complicity from ad hoc employee representatives (commissions of 3 people designated

50

by employees) wherever there are no trade unions: there is a precedent from 1994 when

agreements in temporary work agencies were signed outside union control and with little

autonomy for employees (López Parada, 2012). Moreover, although the end of the

ultraactividad does not automatically allow to change terms and conditions, it opens up the

possibility of different contractual conditions for new employees.

The overall effect of the reform, against which the trade unions called a general strike for the

29th of March 2012 and another on the 14th of November, is a major increase of employer

power. It is difficult to understand the economic urgency of these measures. Even the

governor of the Bank of Spain, Miguel Ángel Fernández Ordóñez, admitted that in the short

term the reform is likely to lead to further employment destruction, even if he expects a

positive effect in the long run. In fact, in the first three months the result was not only the

destruction of 179,400 permanent jobs (previously largely protected from redundancies), but,

contrary to the optimist of the reformers, a 10% fall in job creation. In an implicit recognition

of fault, in November the labour minister Fátima Báñez asked employers like Iberia who

were proceeding to mass compulsory redundancies to show ‘sensitivity’ in the application of

the new rules (El País, 9th November 2012). The reform, by reducing administrative and

collective forms of establishing working conditions and setting disputes, is likely to lead to a

significant increase of legal disputes at the company level. The decentralisation of collective

bargaining would also make company-level industrial relations more ‘distributive’ than

‘integrative’, removing the embryonic co-determination potential of the Spanish dual channel

of employee representation.

The reform actually also poses potential problems for the employers: with the end of

ultraactividad, also favourable parts of agreements expire, such as the derogations from

agreements or the law (e.g. clauses of negotiated flexibility). In the construction sector, even

the employers feared the disruptive effects of the new rules and hurriedly signed a collective

51

agreement under the old system, causing a legal dispute with the government as to whether

the text was covered by the reform or not. By the Spring of 2013, even the leader of CEOE,

Joan Rosell, consented that the ultraactividad should be extended to avoid regulation voids

(El País, 17th April 2013).

Case 2

Immigration and the construction boom and bust in Spain in the 2000s

Immigration in Spain was associated, in 1995-2007, with a period of fast growth especially in

the construction industry, which doubled its share of employment from 6.9% to 11%. In that

period, employment in the sector increased from 1.2m to 2.8m, of whom, according to social

security (Muestra Continua de Vidas Laborales database), 30% were foreigners. In

construction immigrants suffer from a particularly strong casualization of employment

conditions: the percentage of foreigners on temporary contracts is 25 point higher than for

nationals (data: LFS).

In Spain, the crisis has impacted migrant construction workers more than anybody else.

Between 2008 and 2009 total employment in Spain employment fell by 7%, and in

construction by 23% (data: LFS). According to the Migration Survey of the Instituto

Nacional de Estadística (that is carried out simultaneously to the Labour Force Survey), 14%

foreign workers in the whole economy, and as many as 64% of foreign workers in

construction lost their jobs. Of those foreign workers who lost their construction jobs, only

12% had found jobs in other sectors of the Spanish labour market.

Spanish regulations have led, in the construction sector, to migrant segregation within

workplaces, by jobs, occupational groups and shifts (foreigners are more frequently found on

52

night shifts). The phenomenon of sub-contracting chain is widely encountered too: it was

been limited by the Law 32 of 2006, setting a maximum of three links in a subcontracting

chain in construction, but then liberalised again by the labour market reform of 2012 (see

Case 1). Spain introduced stricter regulations in 2004 to prevent fake self-employment, but is

affected by a large share of undeclared work: in an interview, a unionist mentions the case of

undocumented foreign found working in the construction of barracks for the Guardia Civil,

which should have been responsible for repatriating them). Moreover, Temporary Work

Agencies are banned from Spanish construction sites, although this ban has been weakened

by the reform of 2010 (Cremens, 2011).

Different national groups typically occupy different jobs and socialisation is limited between

them even when working for the same company: a Spanish unionist mentions the cases of

separate canteens for North African and Latin American workers. Such segregation and the

undeclared economy are closely interlinked. Many companies operating in different sites

combine regular and irregular workers, and present on each site the same regular work

permits corresponding to their regular workforces, as it is not generally controlled whether

the work permits correspond to the workers actually operating on the site. Migrant workers

operate at both ends of the occupational structure: Romanians and Moroccans tend to work

on the most unskilled jobs, while Poles and many Latin Americans often occupy the most

specialised positions, such as electricians and welders. Focus groups with foreign

construction workers in Madrid have revealed that their self-perception is one of work

without rights (whether employment is regular or not), discrimination and lack of support

(Construcción, 2005).

Employment precariousness in the construction sector has a dark side: increased health and

safety risk. In Spain, the statistical association between temporary employment and safety

risk is strong (r2=0.54) in a study covering the 1993-2005 period (Castejón and Crespán,

53

2007: 24). This indirectly affects migrants, more frequently on temporary contracts. The data

from the Spanish Ministry of Labour and Immigration show that, in 2004 and well as in 2008,

both fatal and serious accidents occurred more frequently for migrant workers than for

national workers, and that workers from the enlarged EU are the most at risk. A Polish

employer revealed in an interview that his employees are used to work 200-240 hours per

month, with overtime remaining undeclared. The crisis may have actually worsened the

situation, because the workers who kept the job may increase their working hours to

compensate for the fall in the hourly pay rate.

There has been a clear improvement between 2004 and 2008, though, thanks to renewed

efforts by the Labour Inspectorate and the new law limiting subcontracting, which requires

company registration conditional on H&S training. A collective agreement has also

introduced individual professional construction cards (tarjetas professionales de

construcción), again conditional on H&S training, compulsory from 2012.

In the area of H&S training, however, Spanish employers display a striking neglect for

linguistic issues. A Catalan employer representative, asked about this issue, answered with a

mere: ‘yes, well, but if they have arrived here and live here, then they must understand

something (…) If they have worked in the sector in their country, then they know what a

helmet is, a safety net, an instrument, these are simple things’. A Spanish H&S officer

comments that H&S training in such conditions may even have contrary effects on foreign

workers. The limited awareness of these problems among Spanish unionists suggests that

their strong class orientation results in neglecting some specific needs migrant workers may

need.

Strong ideological internationalism roots play against any exclusionary discourse in Spanish

trade unions. Faced with the worse alternative of the undeclared economy, Spanish unions

have been actively promoting the regularisation of migrants and their inclusion: exclusionary

54

practices have never been an option given Spanish borders’ permeability and the large

number of small companies. Keeping migrant workers in the regular economy and preventing

their exploitation is therefore an important priority for Spanish unions, but it has

predominantly taken the form of political pressure and servicing, through regularisation

campaigns and the extensive network of publicly-funded Information Centres for Migrant

Workers (CITE), organised in particular by the CC.OO.

Union organising is hampered by the particularly high volatility of work in the Spanish

construction sector, and by the loose controls on employment and qualifications in the

Spanish labour market. In particular Central Eastern European workers in Spain are described

by the employers as individualist and motivated by short-term accumulation, and said to be

avoiding Spanish trade unions (interview with a Polish employer in Spain). Unionisation is

also arduous in the case of undocumented immigrants: unions report that foreign workers

approach the union, typically, only after three years in the country and after having obtained

regularisation. Research has revealed an overwhelming sense of distance between foreign

construction workers and Spanish unions (Construcción, 2005). In the Spanish construction

sector unionisation is rather low, at 8.7% for national workers and 3.6% for immigrants

(ECVT data, 2008), but in the Spanish system of representation membership is not an

important indicator given that union strength depends rather by vote in trade union elections.

In Catalonia, construction unions report that one third of their members are foreigners.

In construction, as at the national level, union action then focuses on the political institutional

level. The unions had an important role in negotiating the mentioned Law 32/2006 on

subcontracting, and negotiated the national collective agreement on the Construction

Professional Cards, they collaborate with the Labour Inspectorates, and are very active in the

bipartite regulatory body Fundación Laboral de la Construcción (Construction Work

Foundation).

55

In Spain posted workers have rarely been a prominent issue, despite a strong presence of

Portuguese contractors especially in the West of Spain, estimated at at least 20,000 (Cremers

2011). Contractors from Central Eastern Europe in Spain tend to involve specialised workers

and have generally opted to register in Spain and apply Spanish employment conditions

(interview with Polish employer in Spain).

With regard to collective bargaining, in Spain the problem is not so much ensuring collective

bargaining coverage, but controlling that foreign workers are placed on the construction

sector pay scale and not, by exploiting their lack of knowledge, on the lower metalworking

sector pay scale (a difference of about €3,000 per year). Even when paid the legal rates,

foreign workers tend to miss out on the local going rates, which tend to be 20-30% higher

(Cremens, 2011). A frequent issue of concern is checking the job grading of foreign workers,

and foreign workers appear to be affected by strong pay flexibility despite sector collective

agreements and despite concomitant employment flexibility. In our interviews, employers

themselves mention that foreign workers have accepted wage reductions in excess of 25%

following the economic crisis.

Overall, the reality of migrant workers’ work in Spanish construction before and after the

crisis is a particularly striking tale on the disarticulate combination of political focus and

informality in Spanish industrial relations.

Note

This case is based on research conducted, through data analysis, documentation and

interviews, with Antonio Martín and Mariona Lozano Riera of Universitat Autònoma de

Barcelona in 2010-11 (Meardi et al., 2012).

56

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1 The change of political orientation of the governments is crucial here, and explains the apparent contradiction of the analysis by Molina and Rhodes (2011), based exclusively on power relations. According to their detailed analysis, González failed to reach a pact in 1993 because of the ‘mutual weakness’ of government, unions and employers (182), but then Aznar was successful in 1997, because of the same mutual weakness (187). In fact, although both González and Aznar lacked parliamentary majority, only the latter was vulnerable to union protest, when there were still three years to parliamentary elections.