Spain begins to leave chronic temporary employment behind: the eventual rate falls from 25% to 17.9% in one year

Fernando (not his real name) works unloading luggage at the Madrid-Barajas airport. In 2016 he signed his first contract, of a temporary nature. Later he has stamped his signature on many others with the same company, always eventual. In September 2022, for the first time in his 33-year life at the time, he signed an indefinite contract. “It is discontinuous, but I have not stopped working since I started. It’s much better than being temporary, you feel much safer. For the pension, unemployment, those things, ”says this man from Madrid, who prefers not to reveal his real name so as not to complicate the transition to fixed usage.

Fernando is one of the hundreds of thousands of workers for whom 2022 has meant a radical change in their employment situation. If the last academic year is characterized by something, it is the drop in the temporary employment rate: it has gone from 25.4% in the last quarter of 2021 to 17.9% in the same period of 2022, according to data from the Survey of Active Population (EPA) published this Thursday. It is a fall of 7.5 points that occurs immediately after the approval of the labor reform. This new regulatory framework, agreed between unions, employers and the Government, limits the scenarios in which temporary hiring can take place, which has promoted the indefinite one.

To begin with, it is worth asking why the temporary employment rate was so high in Spain, well above that of other European countries. ““In the 1984 labor reform, temporary hiring was de-causalized. Until that moment, this type of contract was hardly used, almost all of them were permanent. But since the mid-1980s turnaround, you hardly had to give reasons for using temporary contracts. Causality was reintroduced, but with the volume of temporary contracts it was a chimera”, says the economist and professor at the Autonomous University of Madrid Marcel Jansen. He explains that the use of these contracts reached peaks in the years of greatest growth and decreased in crises, precisely because they were the workers whose dismissal was cheaper.

Jon Bernat Zubiri, professor of Economics at the Faculty of Labor Relations of the University of the Basque Country, points out that the case analysis used to go through the de-industrialization that began in the 1980s or the tertiarization of employment in Spain, with worse and more unstable salaries. But he believes that the recent drop in temporary employment shows that the reason was, as Jansen also points out, the rules of the game: “In the end it turned out that the regulatory issue was more important than expected, since Yolanda’s labor reform Diaz, with the disappearance of contracts for work or service and the limitation of eventual ones for reasons of production, has forced companies to make indefinite contracts.

Since then, explains Luis Zarapuz, member of the Economic Cabinet of CC OO, the successive labor reforms have not limited temporary employment, but have even made it more flexible. “It was based on the fact that a bad job is better than a non-job, so the more precarious it becomes, the better. The reforms were instruments in moments of crisis to improve the unemployment data. And yes, it was improving, but at the cost of worsening the conditions of the workers. This is the first time that a labor reform changes that approach.” “Now,” continues Zarapuz, “doors have been closed to temporary hiring and they have gone to the channel that corresponded to them, permanent hiring.”

Although temporary employment has greatly improved, Spain is still far from the European Union average (14.4%) and countries like Germany (12.4%) or Belgium (9.1%). “This has only started. We still need another year of employment stabilization to bring ourselves up to European standards”, adds Zubiri. Jansen is less sure that the drop will persist in a sustained manner: I would soon say that the temporary rate will continue to drop, but not much more. The restrictions on temporary hiring have been in effect for nine months.

One of the great contradictions in the application of the labor reform is that, despite being a public policy, the temporary employment rate in private companies is improving much more (from 23.94% in 2021 to 14.8% in 2022 ) than that of the Administrations (30.96% to 30.18%). “Every employer, whether public or private, looks for the cheapest contractual modality and that gives him more room for action. The labor reform has closed doors to the work and service contract, but this was not the most common among the temporary ones in the public sector. There are other formulas, such as interim or replacement contracts, which are maintained”, explains Zarapuz. The Government has launched record job offers and promotes the stabilization of temporary workers, but for the moment these measures have not been translated into the data.

What the labor reform has not changed either is the difference between the temporary employment rate of men and women: it has fallen by about six points for both men (from 18.63% in 2021 to 12.66% in 2022), and for women ( 24.48% to 18.17%). This parameter has also decreased for all age groups, but not with the same force: from 25 to 29 years it has gone from 42.47% to 25.69%, while from 50 to 59 years it has fallen from 13.72 % to 8.68%. The situation of young people, still today the main victims of temporary employment, has improved substantially.

By territories there are also notable changes. The community in which temporary employment has fallen the most is Andalusia, 10.7 points, although it was the one with the highest rate in 2021 (34.13%). It has also dropped considerably in the Canary Islands (from 31.46% in 2021 to 21.29% in 2022) and in Murcia (from 29.59% to 19.73%). The autonomy in which it has decreased the least is Extremadura (from 31.54% to 26.82%), which makes it the territory with the highest figure.

discontinuous fixed

One of the effects of the reform that has aroused the most public debate is the rise in discontinuous fixed rates. It is not a new figure, it has existed in the Spanish labor framework since the 80s, but this modality is being used more than ever in seasonal activities. Zubiri believes that this type of contract is “much better in terms of salary, rights and possibilities of rehiring than the previous contracts for work or service.” Jansen is more critical of this formula: “The discourse focuses a lot on the fact that they imply a manipulation of the data and that does not happen, it is not real. However, I do believe that this reform opens the hand excessively to the discontinuous fixed formula. It is being used for contracts that could be continuous indefinite ”. Jansen believes that for the employer it is very cheap to send the worker to inactivity and that it is urgent to regulate this matter in the collective bargaining, as well as to correct the incentives of the companies to guarantee that the periods of inactivity do not extend beyond what is necessary. It should be noted that in these periods the worker is in a moment of guaranteed waiting, that is, he is convinced that he will return to his job. And if not, the termination conditions are the same as for any other permanent worker.

Both Zubiri and Jansen emphasize that either as a discontinuous fixed or as an indefinite one, as Fernando, the worker at the Barajas airport, explained, these formulas give the worker more certainty. The professor from the Autonomous University of Madrid provides several arguments: “When you are permanent, your judicial protection is greater. For example, a pregnant woman with a temporary contract, if they don’t renew it, nothing happens. If she is indefinite, the dismissal would be void. In addition, the temporary contract by default ends, while the indefinite one gives the peace of mind that it is normal for it to progress. And, finally, temporary contracts make it difficult to access mortgage loans, unlike permanent ones”.