It is still unknown what role Yolanda Díaz will play in the upcoming state elections. It is clear, however, that after relinquishing her leadership of the left wing of the PSOE, she will leave behind a legacy of seven years at the head of the Ministry of Labor, if the general elections are held in 2027. A union source closely involved with the government does not hesitate to describe the agenda of reforms and measures promoted by her ministry as a "turning point" in 2021.

In the Minister of Labor and Social Economy's crusade to improve working conditions, reducing working hours is the focus of attention. But behind this lies another, less media-friendly and more delicate issue, which has yet to be addressed politically: compensation for unfair dismissals.

The labour law reform has been approved in Parliament with an added touch of poetry and confusion. In fact, the Bureau is studying an PP MP's vote to establish whether an error occurred during the count. Topping the intrigue of the last few days, during the vote all alarms went off. Speaker Meritxell Batet announced that the decree had been repealed, despite announcing a very tight vote of 175 votes in favour to 174 against. The faces of president Pedro Sánchez and vice-presidents Nadia Calviño and Yolanda Díaz were an absolute sight. The right-wing benches celebrated, but moments later Batet corrected herself: "The chamber's services inform me that the royal decree is validated". The session was adjourned with shouts of "it's been rigged!" from the right-wing bench.

Yolanda Díaz will finally manage to validate the labour reform: Parliament will approve the reform with 176 votes in favor and 173 against. The royal decree was supported by Cs, PDECat and other minority parties, including Unión del Pueblo Navarro, whose two MPs toed the party line despite giving interviews voicing their own opposition. PSOE had been confident for days that the bill would get through, but intrigue was maintained until the end. The negative side for the second vice-president is that she did not secure the support of ERC, PNV and EH Bildu, who she held as priority partners. Díaz managed to save her star project –not doing so could have compromised her future in the executive– but Pedro Sánchez, who has accompanied the minister in her entrance to Parliament, has found new allies.

"We have runaway inflation. Wages have to go up." Secretary general of Union UGT, Pepe Álvarez, has started the new year with a demand that he already tabled weeks before the Christmas campaign. This Tuesday, the union leader has once again demanded that in the face of rising inflation –the advanced year-on-year CPI for the month of December stood at 6.7%– and, in order not to lose purchasing power, it is necessary for workers to see their salaries increase much more. The visible face of the other major union (CCOO), Unai Sordo, has spoke along the same lines: "Spain cannot afford to lose purchasing power".

The Minister of Labour and Second Vice-President, Yolanda Díaz, has achieved what only a few weeks ago seemed impossible: to reach an agreement between employers and unions to modify the PP's 2012 labour reform. The agreement comes after weeks of marathon negotiations in which all parties have yielded to build a consensus. The result, therefore, leaves no one completely satisfied. The government and unions have succeeded in making industry-wide agreements again prevail over company agreements, or agreement to be renewed automatically once they expire until a new agreement is signed; now it lapses after one year. On the other hand, the government and unions have had to give up some of their goals, such as preventing companies from disengaging from agreements in certain circumstances. The review of severance pay has also been put on hold for the time being.

"Tomorrow I would like to have dinner at my home in Galicia, but I will be wherever the negotiation sends me". This is how the Minister of Labour, Yolanda Díaz, summed up the state of the negotiations between the unions, business associations and the Spanish government on labour reform on Wednesday at midday. With the final text yet to be revealed, everything suggests that employers and unions will finally allow Díaz to head back to her homeland and do so with an agreement under her arm. Thus, the reform would come into force before December 31, as agreed with Brussels in exchange for the arrival of European funds.

This Wednesday's meeting between business leaders, unions and the Spanish government to address labour law reform did not end well. The executive has put a proposal to the negotiating table on the design of the future permanent furlough mechanism (ERTE), also known as RED. The main unions (CCOO and UGT) and employers have rejected it as "complex" and have asked the Spanish government to "reconsider" its proposal, ARA has learnt.

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.

With negotiations for labour reform between the Spanish government and the social partners in full swing, the Labour Ministry's proposals are becoming more concrete. An agreement has not yet been reached in the framework of social dialogue, but the department headed by Minister Yolanda Díaz has already put its proposals on the table. Diaz wants to limit temporary contracts to six months - extendable to one year by collective agreement - and eliminate the contract of work and service. She also proposes that the dismissal of workers with temporary contracts be considered void instead of unfair in the case that the contract was not properly justified, regardless of the reason given by the company to terminate it.

The changes in hiring that will be included in the labor reforms will go beyond the simplification of contracts. The Ministry of Labour wants to put an end to the high temporality of the labour market by changing the temporary contracts from top to bottom. The latest proposal which has been sent to the social partners with whom the department managed by Yolanda Díaz is negotiating with - employers and unions - states that temporary contracts may only have a duration of six months. This is extendable only "exceptionally" and if so, must be established by the sectoral collective agreement, to one year.

Urge to form a government and repeal the labour reform. The two fundamental demands of the first of May 2021. It is impossible to understand today, Workers' Day, without bearing in mind the devastating effects that the pandemic has had on the labour fabric. This is the immediate and easy conclusion that can be drawn by visiting the usual trade union rally and listening to the demands and claims of the actors summoned. Camil Ros, secretary general of the UGT, calls for the immediate formation of a government in Catalonia, an essential step for the approval of the budgets. "We ask the governments not to lose time, the state government with the elections in Madrid and the Generalitat with the investiture. We must reactivate the dialogue table and not give in to the pressure of the lobbies to face a partial repeal of the labour reform that has been postponed for a year". Ros is clear and forceful in the portrait of the situation of the financial sector: "The banks fulfilled a fundamental social function, now they close offices massively and stop serving the elderly as they deserve".