European Trade Union Institute, ETUI.

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Spain

1 August 2017

Spain: negotiations on social pact come to a dead end

Negotiations between the central organisations of employers and the trade unions that should lead to a social pact have broken down without any result. Traditionally, the annual pact functions as a framework agreement for the subsequent rounds of collective bargaining. In their reaction to the breakdown, the two trade union confederations UGT and CC.OO stated that the employers have demonstrated a flagrant lack of respect for the principles of social dialogue. The unions foresee a difficult autumn with tough negotiations.

For the first time in 20 years, social partners have failed to come to a social pact. So far, it has been possible even in periods of recession and crisis to come to a deal. Observers had expected that there would be more space for an agreement in a period of growth and recovery. The basic controversy lies in the demand to restore the purchase power of workers in an effort of the unions to share the benefits of growth and to bridge the difficulties of the past and the profits of the future. With a view to guarantee this, the trade unions had asked for a wage clause that would revise wages upwards if the annual inflation developed beyond the level of the planned wage agreements. In general, with the inflation reaching 1.5%, the trade unions asked for a wage increase beyond the current inflation level (in a range of 1.8% to 3% pay increases).

The two employer confederations, the CEOE and CEPYME (for small and medium-sized enterprises), refused to go that far and were only willing to accept a pay increase between 1.2% to 2%, depending on the situation in an industry. The employers had made a final offer, with the possibility of adding a further 0.5%, depending on the individual characteristics of each company or sector. A wage adjustment clause remained unacceptable for the negotiators on the employer side. Therefore, according to the employers, an agreement became out of reach. Despite the failure for 2017, CEOE and CEPYME ensured their ‘commitment’ to social dialogue. The organisations stated that they remain willing to undertake negotiations on collective agreements for 2018 and subsequent years.

The leader of the UGT trade union confederation accused the employers of showing an ‘irresponsible’ attitude at a time when GDP grows above 3% and inflation is between 1.5% and 1.95%. Trade union confederation CC.OO affirmed that the employer organisations CEOE and CEPYME have been incapable of recognising the necessity of transferring to the salary incomes the recovery of the Spanish economy and companies. CC.OO signals that the economic recovery has led to the creation of employment, but most of the jobs are temporary and precarious, and largely linked to seasonal developments. The unions prepare a large information and mobilisation campaign in the course of this autumn.

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