The negotiation for the reduction of the working day from 40 to 37.5 hours without a wage cut, a momentous change in the lives of millions of workers that would be touched on for the first time since 1983, when the 40 was set, has reached a decisive moment. The Government is absolutely determined to carry out the reform, led by Yolanda Díaz, second vice president and Minister of Labor, but it has the clear political support of Pedro Sánchez, who started the political course in September renewing this commitment, and also is in the coalition government agreement. The rule has to be closed before the end of the year, so the negotiation is accelerating these days. The unions are already in, but The employers resist, especially because of the effect it can have on SMEs, small and medium-sized companies, because most large companies already have this or similar reductions incorporated into their agreements.
The Government has decided, according to Executive sources, to make an offer to the employers’ association that, in addition to everything it has already put on the table, has not been enough for the moment. It is about proposing a direct aid plan, that is, subsidies, to all companies with fewer than five workers to compensate them for this reduction of 2.5 hours per week, 10 per month, of their workers. These would be help lines to improve productivity, for digitalization and other ways to adapt. The proposal is designed primarily for four sectors in which there are tens of thousands of SMEs with fewer than five workers, which are the ones that would benefit: commerce, hospitality, cleaning and hairdressers. Shops, bars and hairdressers are mainly based on micro-businesses for which this offer could compensate the cost of a 2.5-hour reduction in the working day, the Government understands. While in large companies the effective average is already very close to 37.5 hours per week, these micro-enterprises are the ones closest to 40.
The Executive has already offered a complete plan with deductions from social contributions for companies with less than 10 workers, which remains within the offer to the employers, but understands that for SMEs with less than five workers this is not useful because they will not be able to hire a new worker, it does not compensate them. So opt for this aid formula, which will now have to be negotiated at the table, but which represents an important leap because it implies that the State will provide money to compensate SMEs for this reduction in working hours. With this decision, the Executive hopes to attract employers and especially SMEs, the most reticent and highly influential sector in the negotiations.
The negotiation is at a particularly relevant moment and the Executive is trying to convince the employers to enter with this offer. The incentive is the usual one in all negotiations: this offer, as well as the deductions, would decline if there is no agreement with the employers. The message is clear: it is advisable to be inside, as in the labor reform, to prevent positions that are further removed from the interests of the employers from being imposed. In the four and a half years of the coalition government, the employers’ association has almost always assumed this logic, and has preferred to be inside to condition the result. He did not do so, however, in the last increase in the minimum wage, and instead of the offer he had on the table of 4%, he saw a 5% increase when he was left out. The reluctance is now very evident, but the Executive hopes to move the negotiation forward with this latest offer.
From a political point of view, the Government’s message is clear: Plan A is for the employers’ association to be there, but the reform will be carried out with or without it. Sánchez, and not only Díaz, has made it very clear that the plan will continue. Some sectors believe that the reform might not have votes in Congress if the employers do not sign, but the Executive trusts in the support of the PNV, because in the Basque Country they already operate de facto 37.5 hours, and in the case of Junts , very sensitive to what SMEs say, this latest offer aimed at them could also facilitate their support, although with Carles Puigdemont’s group there are never guarantees until the day of the vote. In fact, Yolanda Díaz made a recent trip to Catalonia accompanied by her right-hand man and great negotiator of the reform, the Secretary of State for Labor, Joaquín Pérez Rey, to meet, among others, with Pimec, representative of Catalan SMEs, and to survey what could make them support the reform.
Díaz always insists that he has “infinite patience” and never leaves the negotiating tables, but time is of the essence. The social dialogue table for the reduction of working hours was opened more than a year ago, and has held more than twenty meetings. But the discussion remains blocked at the same point: the Government and the union centers seek to translate this reduction in working hours into the law, while the CEOE-Cepyme employers advocate that the reduction continue to be carried out through collective bargaining. The negotiation has reached the point of maturity, and now the employers, with this latest offer, will have to decide whether or not to enter into the drafting of the law that the Government has committed to.
The previous offer, which consists of a battery of aid, called Plan 375, has not convinced businessmen, according to the different sources consulted. This plan is exclusively aimed at companies with less than 10 employees and whose business volume does not exceed 2 million euros per year. The measures basically consist of bonuses in business contributions for common contingencies, for new hires or extensions of hours of part-time to full-time contracts made by these companies to make up for the reduction in working hours.
Labor has left the percentage of this bonus open to negotiate with employers in future meetings and they have shown their willingness to reach up to 100% of the fee that the company must pay to Social Security for the worker. However, the Ministry’s proposal includes a series of limits, such as that there can only be one bonus per company and that job must be maintained for three years to maintain the aid, which make the measures “insignificant and unacceptable,” according to employers’ sources say. From another important business organization they point out: “they propose miseries for us to swallow so that the reduction is by law.” Now it will be necessary to see if the new offer changes reality somewhat or the employers assume the risk of being left out at the expense of what may happen in Congress.
The employers’ association believes that the proposed aid will not be enough for small businesses to hire, even if the working day is reduced, because they have very little margin. “No microenterprise is going to make a single hire” with the proposed plan, says a senior CEOE executive. Precisely for this reason, to counteract this argument, this latest offer of a direct aid plan has been designed to compensate for the reduction in working hours in microenterprises even if they do not hire anyone new. According to employers’ calculations, the reduction in working hours could have an impact of between 11,800 and 40,000 million euros, “while the Government’s measures to compensate are not real.” The Executive, on the contrary, believes that the package of measures that it has put on the table, added to these new direct aid, is more than enough to compensate for the reduction in working hours and is a very solid basis for negotiating, especially with the incentive that the employers would lose everything offered if they were left out of the agreement.
