Misc 08/01/2021

Initial consensus to extend furlough scheme until 31 May

Businesses and unions will meet again next Monday to close the "more technical points"

Núria Rius Montaner
3 min
La ministra de Treball, Yolanda Díaz, en una imatge d’arxiu.

MadridThe resumption on Friday of negotiations around the furlough scheme has ended with a consensus among the social agents to achieve an "unwaivable" extension of the scheme. The date on the table is May 31 and has been proposed by the Spanish government, the SER advanced and sources have confirmed. This date seems to have the approval of unions and employers. For the moment, however, union and employer sources avoid talking about an agreement; they say they will study the proposal that the Sanchez government has to send in with the more technical points yet to be closed and that the social agents will meet again next Monday afternoon. This is already the third three-way meeting between unions, businesses and government since the Spanish government set up the furlough scheme - which today protects more than 750,000 workers - and, therefore, experience plays a role. "Everything that has not been resolved before will not be resolved now," said the Secretary General of union UGT, Pepe Álvarez

Business association CEOE had already anticipated this morning that it would seek the scheme to be extended until June. It also wants companies who fire workers in the six months after coming back from furlough to face a smaller penalty. Currently, companies would have to pay back to the state all tax breaks enjoyed through the furlough scheme. The CEOE suggests that this be reduced only to the tax breaks enjoyed in relation with the dismissed worker. Unions seem unimpressed, with UGT recalling that companies that are in a really difficult situation, that is, those that are at risk of going into insolvency, are already exempt from returning all tax breaks to the administration.

Employers have also pushed for special tax breaks for more sectors. The Spanish government, however, has reiterated that the latest shock plan approved to help the hospitality industry, trade and tourism already expands the list of sectors and, therefore, that they are entitled to higher aid from the ERTE. These companies can save 85% of social security contributions if they have fewer than 50 employees and 75% if they have larger workforces.

In any case, all sides agree that the pandemic has been hard on employment and that, therefore, the furlough scheme must undoubtedly be maintained as a lifeline for many employees. "They have saved almost two million jobs," recalled Álvarez.

The fight over minimum wage

Finally, unions, employers and the Spanish government have not talked about the increase in minimum wage, which the president of the government, Pedro Sánchez, cooled down this 2021 in his speech of balance of the first year of the legislature. Even so, sources familiar with the negotiations point to the ARA that Sánchez will have to rectify and that will end up going up. The debate on minimum wage triggered a hard fight within the Spanish government in the last week of December, which no longer hides from showing different positions. This fact has even forced the unions to discuss in parallel with the two partners of the coalition government.

The Ministry for Work insists on a 0.9% increase, which the unions have already warned they will not sign, while the employers want a pay freeze. UGT stresses that the increase would affect labour sectors that have no collective agreement - since in all those that have signed collective agreements will apply an increase of 1.8% in 2021 - and sectors that "have not suffered the crisis," such as agriculture, said Alvarez. Thus, the range of the possible increase in minimum wage is between €9 per month of work, proposed by the ministry, to €50 proposed by the UGT, according to sources familiar with the negotiation. The unions, moreover, are already considering mobilisations in case this does not happen.