July 29, 2021

Fedea proposes a single permanent contract accompanied by the Austrian backpack to end the temporality


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Fedea poses
two ways to end duality in the Spanish labor market
consisting of the establishment of a model of a single indefinite contract, “possibly” accompanied by the so-called Austrian backpack, or a simplified model of three types of contracts – undefined, temporary and training-, in line with component 23 of the Recovery Plan.

The first option is preferable for the Foundation for Applied Economics Studies, although it understands that “it is difficult to implement politically”, while the second, which can generate similar results, “is more politically viable and more in accordance with the current legal framework. ».

This is what Fedea affirms in a work published this Monday and carried out by professors José Ignacio Conde-Ruiz and Jesús Lahera Forteza, in which they warn that duality is one of the biggest problems in the Spanish labor market.

“There is no justification for us to consistently have one of the highest temporary employment rates in industrialized countries. Excessive temporality is not only a real injustice for the people who suffer it, but also discourages worker training and tends to make companies focus on low-value activities added ”, point out the authors.

The study recalls that the objective of the single contract is to reduce the use of temporary contracts “to its minimum expression” and replace the “wall” that implies the difference between the cost of permanent and temporary contracts with a “ramp” through a single contract whose severance pay grows gradually with seniority.

This option assumes the direct elimination of temporary hiringl, who would happen to be allowed solely for interim or training. According to Fedea, the new contractual framework should be designed in such a way that the aggregate cost borne by companies for dismissal neither increases nor decreases.

Likewise, the authors argue that the new model should also apply only to new hires to respect acquired rights; It would have to fit into the regulation of causal dismissal under the separation between provenance / inadmissibility / nullity, and could be complemented with a small Austrian bottom or backpack, which “would generate efficiency and productivity gains.”

Three contracts

The other option proposed by Fedea, the three-contract model (permanent, temporary and training) would allow, in his opinion, a greater use of temporary hiring, but restricting it only to really temporary needs.

“This could be done, for example, by abolishing current contracts for work and service, maintaining temporary contracts for organizational or productive reasons, that is, those linked to the substitution of other workers or the appearance of work needs of a specific nature. temporary ”, explain the authors of the report.

At the same time, they consider that it would be necessary to “strongly” penalize the fraudulent use of temporary contracts and make the termination of permanent contracts more flexible.

Thus, they understand that greater legal certainty should be granted to the objective causes of dismissal and their costs should be modulated to encourage the generalization of the permanent contract.

These measures should be accompanied by others aimed at increasing the internal labor flexibility of permanent staff, according to Fedea, which, in this sense, sees the possibility of making existing temporary regulation files (ERTE) more flexible and introducing specific ERTEs. , as provided for in component 23 of the Recovery Plan.

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