Spain cuts dismissal protection

The centre-right Spanish government led by Jose Maria Aznar has made it cheaper for employers to dismiss permanent workers.

Until this change, introduced last month, most permanent employees dismissed for reasons unconnected with their personal performance had a right to a severance payment of 45 days' pay per year worked, up to a maximum of 42 months. The exceptions were groups of workers such as those coming out of long-term unemployment. It was considered that the arrangement would make it difficult for them to find a permanent job. Their dismissal compensation was fixed at a lower level, generally 33 days per year with a maximum of 24 months.

The new change greatly limits the number who have the higher level of protection. In effect it only applies to existing employees who already have it and some men and women aged between 31 and 44. The government has, however, given temporary workers the right to eight days' pay per year where they are dismissed or their contracts end.

The unions dismiss the argument that these changes will encourage employers to take on more permanent staff. They want greater controls on the use of temporary workers and are considering national industrial action to protest against the change.