Average contract in 2021 under two months

Barcelona"We are feeding a time bomb". So says economist and president of human resources company ICSA Group, Ernest Poveda, before "the abuse" of temporary contracts that has monopolised the Spanish labour market for years, focusing mainly on less skilled jobs. The data prove him right. According to the State's Public Employment Service (SEPE), during the first seven months of 2021 the average duration of contracts is under two months, specifically 54.1 days. The figure is more alarming - says the economist - if you consider that the economic crisis of covid has not had any impact, since compared with recent years is a little longer. In 2007, in times of supposed economic bonanza, the median duration of contracts was 78.6 days; 2013, in full financial crisis, fell to 53.3 days, and 2019, before the pandemic broke out, it reached historic lows by dropping for the first time below 50 days. "Short-term employment has become chronic and there is an abuse of temporality and this causes instability for many workers, who have one contract after another, something that directly affects the economy and especially consumption, because a person who is in this situation does not consider buying a home or a vehicle," he exemplifies.

The situation is even more worrying if you look at how many contracts of over a year are signed per month. According to the latest data published by the SEPE only a derisory 0.3% exceeded this duration in July. On the other hand, of the 1,838,250 contracts signed in the seventh month of the year, one in five lasted a maximum of one week and one in three a month. As for permanent contracts, 165,500 were signed, a figure equivalent to 9% of the total number of those registered in July

The average duration of contracts registered with the SEPE in July alone was 53.2 days, a figure slightly lower than the 53.3 of the same month last year. Even so it is six days above the minimum ever, which was recorded in July 2019 with 47 days

The labour reform the Spanish government is negotiating with employers and the main unions wants to declare war on this temporality. It should be noted that Spain (24.7%) is the second country in Europe with most temporal contracts in 2020, only surpassed by Montenegro, despite the fact that the data of this country is from 2019 and that Brussels already has been asking the Spanish government to change this situation in both the public and private sectors for years. To do so, the Minister of Labour, Yolanda Díaz, hopes to simplify the number of contracts and only allow companies to hire temporary workers for two reasons: to cover workers on leave or surges in work. Thus, the current contract for "work and service", one of the most common, would disappear. The minister's intention is to approve these changes before the end of the year. To achieve this, she will have to face an autumn of intense negotiations with businesses and unions. "The simplification of contracts will help address temporality. However, it is not the only solution," the economist clarifies.

Prioritising permanent contracts

According to Poveda, the key is to prioritise permanent contracts over temporary ones, just the opposite of the current trend in the labour market. If you look at employment data for July, up to 91% of the contracts that were signed were temporary and only 9% (165,500) were permanent, of which more than 64,000 were part-time. "We need to reach a minimum of 50% to give the Spanish economy stability. You cannot cover structural jobs with temporary contracts as has been happening in recent years," he insists. In this sense, the economist agrees with Diaz that contracts for a specific time only be used when there are surges in the amount of work. "This abuse of temporality by companies only shows that they do not plan neither in the medium nor the long term," he says.