From previous posts it appears that permanent job insecurity has been a resounding success. The question is what has been achieved at the same time, reduce labor market duality?
2. For starters, I think
is more appropriate to speak of "segmentation" of the labor market of "duality" . Segmentation is the division of labor market in a series of "segments" relatively independent where working conditions and job opportunities are very different. In the labor market more than two segments and the segments that can distinguish are not completely closed.
3. Secondly, I think is a mistake to confuse
market segmentation with the dichotomy between permanent contract / temporary contract . This distinction is particularly important in Spain, but this is just one of the ways in which legally has articulated segmentation, which is a social and economic reality "before" legal.
4. One of the most important elements through which it manifests segmentation in the English labor market is
the seniority . This trait is the result of a series of policy decisions in which I can not stop now. The importance of age has been legally finalized in two institutions: the
abuse of temporary contracts and absolute dependence on the length of severance payments. 5. Broadly speaking, the use and abuse of temporary contracts derived from three types of situations: a)
needs "really" temporary company, b) the execution of contracts
in the context of decentralization production, c) c
temporary CONTRACT law fraud. Certainly, the English economy relies heavily on sectors with high rates of temporary "real", but even so, the data suggest that the bulk of temporary contracts referred to cases b) and c). The assumption b) is supported by case law, which has led to the legalization of abuse. If any contract is automatically seen as a "temporary necessity" is that companies may have almost full squad "permanent" temporary contracts without problems, given that today production is organized on a decentralized and businesses often work for other companies, not directly to the consumer.
6. To truly temporality should have expressly prohibited the automatic link of work or service contract with the execution of a contract [case b)], while recognizing as a reason to dismiss the significant loss of contracts with other companies (which actually would be within the normal business reasons .)
7. Second, the timing should be tackled fraudulent [assumption c)]. Surely, the majority of temporary contracts signed in Spain are fraudulent. What if the contract is terminated and the worker claims? For applying the consequences of unfair dismissal. But often the worker not to claim compensation for dismissal compensation depend on the age and are very low. So, in my opinion,
the most effective way to combat fraudulent temporary, addition to clarifying the cause,
is putting a floor on compensation for unfair dismissal. However, the Government has done is to promote compensation for 33 days and give to employers 8 days of compensation for unfair dismissal through a public fund. Reducing
compensation for unfair dismissal is encouraged fraudulent temporary. I have the suspicion that the economists who have advised the Government have assumed that the cost of extinction a temporary contract fraud is 8 days' wages per year when it is actually 45 days of salary per year, so the problem is that there is a floor that guarantees the dignity of the poor old worker.
8. What did the government then?
As noted by Professor
Sanguineti, has not addressed the root problem, but obliquely : increasing the cost of extinction (in accordance with law) of temporary contracts and limiting
chain of contracts or duration "excessive" status. Apart from these measures are very mild, compared to enormous lowering of dismissal, again
make no distinction between law-abiding businessman and the fails, it does not have the reason or not having it. The legal logic is once again blurred by the simple calculation of costs.
9. Extinction (legal) temporary contracts will (supposedly)
8 to 12 days salary per year of service .
say supposedly because the projected increase is gradual, over a period of about 5 years (live decree-law "urgent" measures!). At present, there are going to notice anything. If in 5 years has not been repealed
the final difference is not significant for low-seniority workers (4 days' salary per year!).
However,
be "punished" by the employer as "compliant", which has a temporary need to cover, which the contracting fraudulently.
10. Below this increase proposal clearly flutters "single contract." On one hand it provides the most fair dismissal (20 days per year), on the other hand, gives Fogasa 8 days. 20-8 = 12. If we refer to a contract agreed in 5 years, where, therefore, compensation for temporary contracts is 12 days, the cost of extinction would be the same in both cases (because, in addition, the notice of dismissal, which is usually paid in cash has been equated to 15 days notice of termination of temporary contracts of more than 1 year).
I believe that this measure
other that will encourage somewhat long-in- holding permanent contracts at the expense of precarious. But it's a world of appearances, not reality, because what matters to workers is not the type of contract, but real stability.
We forget that the cost of extinction of what is really depends on the length of service. Small Workers old, temporary or permanent, are equally vulnerable.
In fact, what may well happen is that many entrepreneurs Executed
temporary contracts, but then decide to opt for fair dismissal instead of waiting on schedule or full term. Thus, the term agreed in the contract loses its sense of providing some assurance about its duration. Never mind that it has been agreed a temporary or indefinite. Again the same contract.
11. There is a possible additional side effects. It is possible that an employer who fraudulently contracted, by sheer inertia pay the worker 12 days per year. Is slightly reduced the difference from what I could get the worker claiming (33 or 45 days counting the 8 of Fogasa. This reduction in the difference between the amount collected and that could be obtained by going to trial may discourage demand approach, although the effect is not very large.
12. The second line of the legislature was to limit the duration of temporary contracts. First, it has been "enhanced" rule introduced in 2006 which limited the duration of sequence of temporary contracts, this rule does not work well because it was very easy to escape from it and now this problem has been fixed. Although in most cases, these assumptions chaining of several temporary contracts to cover 24 months are fraudulent, if that is not so, the employer will be "punished" by the system. It seems far more appropriate strategy I have outlined above, namely to strengthen the causality of temporary contracts. Beyond this, the measure is not particularly objectionable, but insufficient. First, because of low seniority workers remain unprotected. Second, because there is no linkage if there is one job or service contract, fraudulent or related to a contract that is renewed continuously.
13. To avoid the latter setting a new absolute limit 3 years extendable to 4 collective agreement.
In the vast majority of cases, when a temporary contract reaches 3 or 4 years is clearly fraudulent (or is it the alleged abuse but allowed the contracts). Is not it a bit absurd to suppose that 3 years is a temporary need for the company? Why wait until that date to make it permanent?
14. The problem, again, is that
is left unprotected workers with low seniority because the level of protection is again based on this trait
. If it is true that the temporary contract is fraudulent, when a worker takes 3 or 4 years with the company is maybe when you start to trade profitably sue the unfair dismissal. From another point of view, it could happen that an employer who had employed fraudulent (with an incorrect perception of the proper compensation) decide to dispose of their workers before they became permanent, involuntary rotation encouraging.
15. In some cases it may be that a contract for over 4 years corresponded to a real need. Such is the case of works and services autonomously and proper nouns, limited run very long time but, as perhaps could happen with a construction or a research project. In these cases, again, is "punishing" the employer to comply with the law. Although it should be noted that the lowering of firing decreases the effect of punishment and that seems to have established an ambiguous form of escape through the first additional provision.
16. Of course, one of the most abusive employers who have temporary contracts without cause, the public administration will continue "going Olympian" of the legal provisions for conversion into permanent contracts, as has been explicitly to say (not in these words: course), the text of the reform. Indefinite, but not fixed. Given the high rates temporary recruitment in the administration, should have tackled this problem.
17. One final note, the transient effects of the reform what they do is produce a multiplicity of types of contract "with different levels of employment protection. and therefore, different groups of workers with different positions of power against the employer: 45 days / year, 33 days / year, 37 days / year, 25 days / year, 8 days / year, 9 days / year, 10 days / year, 11 days / year, 12 days / year. Perhaps this chaos of levels of protection ends with the "duality", but regarding the "segmentation" I'm not so sure it's so appropriate to divide the workers in a multitude of castes. Of course, the oldest are still the most benefit. In any case, under these indemnities
s ontinue
while the old (and salary) as the trigger-in-practice of "justice" or "injustice" of business decisions.