Spain proposes change to employment laws

The Spanish government is proposing changes to labour laws to make the country more competitive.

Unions have given the reform plans a cautious welcome but they are already warning that any future negotiations could be overshadowed by a dispute over pensions.

Prime Minister Zapatero, presented business and union leaders with a series of measures to make it cheaper for companies to hire workers.

“We want to reform aspects of our labour institutions to promote employment stability,” he said.

Ministers are hoping unions and bosses can negotiate concrete reforms encouraging part-time work contracts and boosting youth employment but plans to raise the retirement age to 67 could prove to be a major stumbling block.

Ignacio Fernandez Toxo, CCOO union leader said: “We disagree with national government regarding the future of retirement pensions, but we will work positively on it.”

Spain’s labour market has been criticised by economists over rigid contracts which make it expensive to shed long-term employees. Young workers on temporary contracts are the first to go in a downturn.