Spanish unions agree pay norm for 2003

The two main Spanish trade union confederations, the CCOO and UGT, have reached agreement with the employers on pay guidelines for negotiators in 2003. These are likely to produce increases of around 3.0%.

The agreement signed at the end of last month states that both sides are committed to "a policy of moderate pay increases".

It also says that negotiators should take the government's 2.0% inflation forecast for the year as their "primary reference". However, increases can be higher than this "within the limits set by increases in productivity". This is generally expected to add another 1.0%. Inflation in Spain is currently 3.7% (January).

Crucially the agreement also accepts that deals signed on this basis should include a revision clause, which ensures that any ground lost because of inflation being higher than forecast is made up in later years. This was a particularly important issue for the trade union side as recent years have seen inflation well above the government forecasts.

The employers were initially unwilling to accept a revision clause but finally conceded, as it became clear that the unions were only prepared to sign on this basis.

The agreement also covers measures to increase the proportion of workers employed on a permanent rather than temporary basis, improved training and model clauses aimed at reducing discrimination against women.

This agreement is guidance rather than a legally binding document and the next few months will indicate how far its recommendations are being taken up.