Overview of 2019 and goals for 2020 in labor and employment

The 2019 regulatory year actually began in December 2018 with the approval of highly relevant  laws such as Spanish Organic Law 3/2018, of December 5, on Personal Data Protection and Guarantee of Digital Rights, which expressly recognizes rights such as employee privacy in the use of digital devices, the right to digital disconnection and limits on video surveillance and geo-localization of employees; Spanish Royal Decree 1462/2018, of December 21, which approved the highest increase ever of the inter-professional minimum wage (22.3%); and Spanish Royal Decree-Law 28/2018, of December 28, on revaluation of public pensions and other urgent social, labor and employment measures that, among other measures, re-instituted mandatory retirement; made social security contributions mandatory for unpaid internships; suspended the system of reduced social security contributions for decreased workplace accidents; made it mandatory for independent contractors to have insurance for professional contingencies, cessation of activity and ongoing training; increased the contribution rate for workplace accidents and professional illness in certain activities and the contribution rate for short-term contracts.

We kicked off the year by assimilating all these legal changes. But the excitement did not end there. The new year had several regulatory changes in store in numerous areas of labor relations. These changes were quite intense, mostly concentrated in the first quarter because of the two elections in Spain and the caretaker government.

In 2019, we saw regulations introduced in  several areas, including (i) protection of corporate secrets from ex-employees (Spanish Law 1/2019, of February 20, on Corporate Secrets); (ii) equal opportunity and treatment of men and women at work and in occupations (Spanish Royal Decree-Law 6/2019, of March 1), with major changes to strengthen working parents’ position viz. their companies (e.g., more detailed regulation and expanded possibilities for modified schedules) and geared toward requiring greater objectivity in companies’ decisions on employee dismissals and salaries, requiring salary transparency, and expanding the subjective scope of gender equality plans, among other measures; and (iii) the important obligation for all companies to keep a daily record of regular hours worked (Spanish Royal Decree-Law 8/2019, of March 8) to facilitate documentary proof of overtime.

Much of Spanish lawmakers’ workload coming from the European Union in 2019 involved bringing regulations up to date in areas such as whistleblower protection (Directive 2019/1937, of October 23, 2019); balancing parents and caregivers’ work and personal life (Directive 2019/1158, of June 29); and the transparency and predictability of working conditions (Directive 2019/1152, of June 20, 2019).

The year 2020 promises to continue this line of regulatory changes, updating the regulatory framework for labor relations, but also (and especially) starting to gradually roll back certain aspects of the 2012 reform, which were far-ranging at the time and approved without the consensus of the social stakeholders.

This is our first reading of the PSOE/Podemos coalition government (Progressive Coalition: a New Deal for Spain) that was just made public, and that clearly points to regulatory changes of the 2012 labor reforms and the tendency toward flexibility. Basically, the new government is working toward regulatory changes in various areas of labor relations:

• Termination: doing away with absenteeism due to sick leave as fair grounds for objective termination and to undertake a review of the economic, technical, organizational, and production grounds for dismissal.
• Internal flexibility: limiting the ability to make changes to working conditions and disregard collective bargaining agreements.
• Decentralization of production: reducing the activities that companies can outsource.
• Collective bargaining: a return to the extended enforceability of collective bargaining agreements and an end to subordination to company agreements.
• Work-life balance and workplace violence: a proposed pact to rationalize work schedules, enhance the right to disconnect digitally from work and prevent workplace harassment.
• Employment contracts: legislative changes regarding contracts for internships and work placements; limits on justifications for fixed-term contracts; incentives for permanent seasonal contracts; and prevention of fraudulent part-time contracts.
• Occupational risk prevention: updating the list of occupational diseases; reporting workplace accidents; assessing psychosocial risk and risks associated with new technologies; and promoting gender-based policies.
• Labor Inspectorate’s resources and objectives in the fight against labor fraud: strengthening the authorities’ use of new technologies and big data and targeting  actions against successive temporary contracts, fraudulent use of part-time contracts, and bogus self-employed workers, co-operative workers and interns.
• Companies’ labor costs: they will be affected by new, gradual minimum wage hikes and lower social security contribution credits.

In short, and although the recently published New Deal is a concept program and the extent of the announced reforms remains to be seen, it seems appropriate to note that new regulatory limits will burst onto the scene in 2020, restricting companies’ current internal and external flexibility margins.

We will monitor these changes to continue reporting on this blog.

Happy New Year!