April was the first month in which the labor reform was applied in its entirety. The result was overwhelming. In those four weeks, 698,646 permanent contracts were signed, almost half of the 1.4 million that were signed. Before the reform, these contracts barely represented around 10% in a normal month. Faced with a regulation that restricts temporary hiring, companies opted en masse for this format. However, of those indefinite contracts, 60% were part-time or discontinuous: 413,914 of the almost 700,000, according to official statistics. Never before has there been such a large proliferation of these contracts. In fact, it is the first time that the sum of these exceeds the permanent full-time. Specifically, 175,154 were part-time and 238,760 permanent discontinuous.
Obviously, the needs for part-time or seasonal workers have not skyrocketed from one month to the next. Basically, such effervescence exposes the different mechanisms that companies are resorting to to adapt to the new labor ecosystem. An important part has decided to make permanent those who previously hired as temporary. And there the reform has been a success. But there is another part that has looked for cheaper formulas to deal with the new framework. “You can’t do magic. Without changing the production model, you will simply have a new format for this period of time”, points out a business source.
Several consulted lawyers explain that, in an environment of high uncertainty, companies have sought how to channel the temporality that has now been restricted. And partiality is a cheaper way to save hours, contribution and compensation. This April its use tripled compared to the same month of 2019, the year in which Easter also fell in April.
It is conceivable that the inspection should review these contracts in case they could be fraudulent. However, most experts still see good faith: they would simply be testing and, if it goes well, then there could be a conversion of these to full time. “Before they hired you full-time for a month, 15 days or a week, and that way they didn’t get their fingers caught. They covered all the hours they needed for a certain period of time, and if it was necessary to extend it, they extended the duration of the contract. Now they are resorting to this part-time indefinite formula to test if they really need a person all day to cover the gaps they have or not”, explains Cristina Estévez, secretary of Institutional Policy and Territorial Policies of the UGT.
As for the discontinuous fixed, this has multiplied by ten compared to April 2019. This is the modality that the reform places as the default to fill vacancies seasonal. These are contracts that offer the employee a somewhat higher degree of protection (compensation is higher and they are entitled to vacations, for example), although an excessive deployment can contribute to the stagnation of thousands of workers by leaving them at the expense of the call of the entrepreneur and lack a full regular day. “The promotion of this modality is a step in the right direction, although it is clear that it is not about the definitive modernization of labor relations and its homologation with the rest of Europe,” says Carlos Martín Urriza, director of the Economic Cabinet of CC OO.
He knows in depth all the sides of the coin.
Cristina Estévez justifies the boom of the discontinuous fixed ones in April because it was the month in which the labor reform was fully implemented after three months of legal vacancy or transitory period, in which companies could continue hiring according to the previous rule, but with a maximum duration of six months. “We will not be able to see the dynamic effects of the labor reform until a few months from now, which is when it will be possible to verify whether permanent contracts are being made, for example, in line with the number of hours that must be covered in each indicated position. ”, adds Estevez.
Economist Miguel Ángel García explains that it is still early to draw conclusions about the reform: “In terms of the stability that many workers have gained, the reform can already be considered as something positive. What remains to be seen is whether employment increases by measuring total hours worked and the unemployment rate.” In theory, the defenders of the reform point out that by gaining stability, wage earners should improve their productivity and, therefore, more employment would be generated.
Marcel Jansen, professor at the Autonomous University of Madrid and Fedea researcher, expresses the same precautions: “On the one hand, there has been a normalization of part of the enormous stock of temporary contracts that existed before the reform. On the other hand, companies have tried to maintain the flexibility that the temporary one offered them by reducing costs and hours, either with part-time or permanent discontinuous”. In any case, Jansen stresses that reforms always tend to have undesired effects, as they are a very complex puzzle and operate with prohibitions instead of incentives. “We must avoid alarmism, follow its evolution, evaluate it, make it public and correct what does not work”, he concludes.
However, the Government argues that the change of model in employment is evident, since there has been an orderly transfer between temporary and indefinite taking accumulated data so far this year. According to Social Security figures, between January and April the number of permanent full-time workers increased by 407,824, a figure practically similar to that of temporary workers who disappeared with the same full-time job (401,537). Something similar happened with the temporary part-time jobs, which fell by 342,337, coinciding with the 261,885 that the permanent ones rose with the same part-time job. Hence, the Executive speaks of transfer. In addition, the discontinuous fixed grew by 258,126 in the first quarter, although no statistical table specifies for now what type of working day, part-time or full-time, they have.
Another of the arguments in favor of improving working conditions is the progressive decrease in the number of short-term contracts (less than seven days), for which the labor reform contemplates a contribution penalty of 27 euros. These in April became little more than a quarter of the total contracts, compared to the three quarters that they represented for this month before the reform.
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