Unions welcome pay boost for Spanish public sector

Unions and the government in Spain have reached an agreement that will significantly improve public administration workers' pay from next year.

The deal, signed on 28 July, is worth 3.1% overall: basic pay will increase by 2.0%, and there will be rises in the "extra month" payments that all Spanish employees receive in July and December.

Wages in Spain are made up of:

* basic pay;

* additions based on length of service;

* a substantial payment made for specific knowledge and experience (the complemento de destino), worth 35% to 88% of basic pay depending on job and grade; and

* another payment linked to job conditions such as level of responsibility, working conditions or danger (the complemento especifico).

Until now, the extra month payments have been made up of the first two elements above, plus 60% of the complemento de destino. Under the new agreement, this will increase to 80% of the complemento de destino from July 2006, and to 100% from December 2006.

The complemento especifico will also be incorporated into extra month payments in 2007 and 2008, making the payments fully equivalent to a normal month's salary.

Spain's two main union confederations welcomed the agreement, which will also reduce the level of temporary working.

Inflation is currently 3.3% in Spain (July), but the underlying rate is 2.5% and has been falling since the beginning of the year.