Labour market
Business 10/09/2021

Autumn reforms in the limelight after lack of agreement on minimum wage

CCOO union considers negotiation "exhausted" and demands Spanish president take a stand

2 min
The secretary general of CCOO, Unai Sordo, at a press conference this Friday.

The negotiations to increase minimum wage in 2021 have made little progress. In fact, they now run the risk of overlapping with negotiations on the extension of the furlough scheme (ERTE), for which there is already a date set: next Thursday. Given this scenario, unions, employers and the Spanish government want to prevent the tug of war over wage increases affecting other negotiations, such as the ERTE or the reform of the labour law, which will be discussed soon.

"Up until now the results [of the negotiations] have been excellent, but we cannot err on the side of optimism," said secretary general of CCOO, Unai Sordo, who acknowledges the current deadlock. However, the trade unionist has ensured that minimum wage "will not contaminate" other agreements. "This will not be the reason for the friction," said Sordo in a briefing on Friday.

Sources familiar with the negotiations admit employers have shifted towards tougher positions. Although they have always been firm, they have never been unmovable: the best proof is that all the negotiations so far - from furlough schemes to pensions to the new delivery rider law - have received backing from unions and employers. Until now, however, the unprecedented economic shock resulting from the pandemic forced everyone to adapt, both to safeguard companies and workers. Now, after economic indicators improved, finding common ground is not so easy, according to the unions.

Although the last informal calls have not been successful, the Minister of Labour, Yolanda Diaz, is confident in a last-minute agreement with unions and employers: "I prioritise agreement over amounts," she said in an interview on TVE on Friday. The goal is to convince employers to back a wage increase, who for the time being defend a freeze on pay rises. "It is true that there is a party that has sat at the table without a willingness to negotiate: it arrived saying zero euros and has felt saying zero euros. This is not to negotiate," lamented Diaz. Even so, for the unions -who are willing to lower their demands - the negotiation is dead. "The ball is in the Spanish government's court - even in the president's," said the secretary general of Union UGT.

The proposal of the Spanish government plans to negotiate is an increase between €12 and €19 to month salaries for next year. The unions would accept it as long as there is a commitment to start 2022 with a minimum monthly salary of €1,000 (it currently stands at €950 paid 14 times a year) and reach 2023 with a minimum wage that translates into 60% of the median wage in Spain (about €1,050 per month).

Furlough and labour reform

Everybody assumes that the furlough scheme will be extended once again (the current extension expires on 30 September), the question is how. In addition, this extension should also be a stepping stone towards a permanent regulation of furlough schemes. "We hope that the agreement will be reached quickly, despite the fact that we always need until the last minute. Now the groundwork is already laid," acknowledged Union CCOO's secretary general. In addition, unions, employers and the Spanish government will have to sit down to address the modernisation of the labour market. "It will not be easy to negotiate," Sordo anticipated.

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