EU court verdict boosts call for Spanish benefits overhaul
Spain has EU’s secondhighest jobless rate after Greece, with a labour market more reliant on temporary contracts
An EU court ruling defending the right of temporary workers in Spain to receive severance pay is fuelling calls from Spanish unions and politicians for one of Europe’s most uneven labour markets to be fixed.
Spain has the European Union’s second-highest unemployment rate after Greece and its labour market is more reliant on temporary contracts than any other in the bloc bar Poland.
The high jobless rate — 20 per cent of the workforce at the last count and affecting close to half of young people — has been a blot on what has otherwise been a three-year economic recovery, nine months of which has been without a fullfunctioning government.
Short-term workers are cheaper to fire than permanent ones and have borne the brunt of job losses in bad times, but previous Spanish reforms have struggled to eradicate the twotier labour system.
The European Court of Justice blew open the issue after it argued in a September 14 ruling that a Spanish woman who was employed as a temporary substitute for a civil servant over seven years was entitled to the same severance pay as a permanent employee when she was let go.
Worker unions have welcomed the ruling, demanding measures to give all temporary workers equal severance rights and encouraging them to seek compensation through the courts until a reform is put forward.
“This could really blow up, you could see an avalanche of lawsuits,” said Fabian Valero, a labour lawyer at Galicia-based firm Zeres.
Fraudulently hired
Valero most recently defended nine hospital workers who successfully argued they were fraudulently hired as temporary staff on contracts that were rolled over for several years, when they should have been treated as permanent staff — another common gripe which politicians have vowed to deal with.
Legally, temporary workers have to be considered permanent after a period of two years in Spain and should only be hired for short-term projects or seasonal jobs.
But loopholes in Spain’s complex labour framework, which comprises dozens of different contract types, mean many people are employed on short-term contracts when they shouldn’t be, while substitute workers are governed by different rules.
Under Spanish law, temporary workers get 12 days pay for every year worked when they are laid off, versus the 20 days for permanent employees and nothing for those on temporary substitute contracts.
Acting Economy Minister Luis de Guindos — holding the fort in the absence of a formal government — said last week that the labour market could be improved, though possibly by making the hiring of permanent staff more attractive.
“In Spain the number of temporary jobs ... is excessive and that somehow needs to be corrected,” de Guindos told local radio.