Yesterday, the Council of Ministers approved the Royal Decree Law that repeals article 52.d of the Workers' Statute, which, until now, contemplated the dismissal from justified medical leave, with certain exceptions.
The justification used by the Minister of Labor and Social Economy, Yolanda Díaz, is that “decent work is an international mandate” and added that “We prevent the most vulnerable from being fired when they must be specially protected”.
The truth is that the pact of PSOE and Unidos Podemos pointed towards a reversal of the labor reform. More specifically, point 1.3 indicated that “We will repeal the labor reform. We will recover the labor rights taken away by the labor reform of 2012”.
Hence, we are probably facing the first step to start scrapping the 2012 labor reform.
First step: Eliminate dismissals due to lack of assistance
The Government never intended to make an amendment on item 52.d of the Workers' Statute, it has simply sought the repeal. But What did point 52.d of the Workers' Statute say?
For absences from work assistance, even justified but intermittent, that reach twenty percent of the working days in two consecutive months provided that the total of absences in the previous twelve months reaches five percent of the working days, or twenty-five percent in four discontinuous months within a twelve month period.
Absences due to legal strike for the duration of the same, the exercise of activities of legal representation of workers, accident at work, maternity, risk during the period of absence will not be counted as absences of assistance pregnancy and lactation, diseases caused by pregnancy, childbirth or breastfeeding, paternity, leave and vacation, illness or accident at work when the leave has been agreed by the official health services and lasts for more than twenty consecutive days, or those motivated for the physical or psychological situation derived from gender violence, accredited by the social services of attention or Health services, as appropriate.
Nor will absences due to medical treatment of cancer or serious illness be counted.
As we can see, the essence of this point is that the company was allowed dismissal for accumulating medical leave in a certain period of time. This allowed the company to depart from a labor cost that did not generate a return to the company.
However, it should be remembered that the objective dismissal of a worker who misses 20% or more working days to work justifiably for two months is understood as legal. The Constitutional Court itself ruled last October that the limit to the right to work is justified by the “freedom of enterprise and the defense of productivity”.
The positive facts we saw with the 2012 labor reform
Without a doubt, the labor reform is probably the best thing that the Popular Party Executive did because it gave companies the ability to make their work structure more flexible to meet their particular economic reality, lowering the dismissal. This allowed companies in serious difficulties to avoid bankruptcy.
If we put ourselves in context, after the global financial crisis, real GDP per capita in Spain fell by 10% in 2013 compared to 2008 and employment had decreased on average by 3.5% annually during the period 2009-2013.
It may be far away but Unemployment rose to 27% in 2013, while the youth unemployment rate exceeded 55%. In this context, the Gini coefficient it increased by about 2 percentage points, and the proportion of the population at risk of poverty increased by about 4 points.
As a recent IMF study points out, employment growth after the reform was systematically higher and lower youth unemployment compared to a possible evolution of employment growth and youth unemployment in the absence of reforms.
The strong job creation, aided by reforms, has improved income distribution after 2012. For those who like to emphasize inequality, the truth is that the 2012 labor reform contributed to a significant reduction of the Gini coefficient five years after the reforms.
Not everything is positive data in the labor market at this time. The exceptions to these improvements can be found in part-time employment, which despite a certain decline remains substantially higher than the pre-crisis rate.
However, this exception is a consequence of the structural change in the economy and the collapse of the unsustainable construction boom. Let us think that with the 2018 figures, the proportion of construction in employment fell by more than 6 percentage points compared to 2008. Most of the employment was replaced by jobs in the services sector, in particular hospitality, education and health and social services.
If we aim at the average part-time employment rate in the hospitality, education and health and social services sector, it has been more than four times higher than the part-time employment rate in construction.
Despite the good results we have seen in the labor market, the minimum wage has been able to load the positive effects of the labor reform. Unemployment has stopped falling at rates between 6% and 9%, now we see how the last year of January only reflects a decrease of 0.92%.