Labour Research March 2012

European news

Employment rights threatened in Italy and Spain

The Spanish and the Italian governments are introducing major changes to employment rights and bargaining arrangements in the next few weeks.

The Spanish reforms include cutting the maximum severance pay that employees can receive to 33 days’ salary per year of service — down from 45 days’ — with big cuts to the maximum levels of payout.

If an employer’s revenues have been falling for at least a nine-month period they will be able to pay staff the lower 20 days’ severance pay per year worked, and a maximum of a year’s salary. Companies in difficulty will also be able to opt out of collective bargaining agreements and alter working conditions by, for example, reducing wages or changing schedules.

The unions, who had just signed a three-year pact with the employers guaranteeing pay moderation, have reacted angrily, arguing that the changes will only encourage companies to cut jobs.

In Italy, meanshile, labour minister Elsa Fornero argued for a move away from “bad” flexibility, with increasingly precarious forms of employment, to “good” flexibility, which encourages investment and training.

However, last month at a meeting with the unions she told them she would pass the reforms, even if they cannot reach agreement.

Points of difference between the parties lie in issues such as the reinstatement of individuals who have been unfairly dismissed — a right all the unions defend and which the employers want removed.