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Unions in possession of labour reform proposal

Source: El Pais - Sat 15th Jan 2011

Spain's government is hoping to placate the unions in a draft decree which aims to clarify the circumstances in which employers can lay off workers with reduced severance entitlements.

The draft, which has already been passed to the Unions, is an attempt by the government to win the Unions over and help strengthen Spain's economic sitaution. The PM is hoping to gain support on a number of issues from the unions by January 25, when the government will present its proposal for pension reform to Congress.

Controversial labour reforms approved by Congress in September now allow companies to dismiss workers with just 20 days pay in compensation for each year worked, compared with a maximum of 45 days if they are "facing an adverse economic situation in such cases as actual or forecast losses."

The CCOO and UGT unions claimed the law was vague and held a general strike on September 29 to protest against the labour reform package.

The latest proposal states that employers cannot sack employees by alleging losses that are "merely one-off." Business will be required to submit a "technical report" in order to justify their financial position and the need to release numbers of staff.

When a business decides to apply for a deferral to pay employees less severance pay for economic reasons, it must produce a report detailing profits over previous years, and evidence that projected losses are not just 'a blip'. The government also acknowledges that: "The question arises that forecasts refer to future, and as such, uncertain events, which excludes the availability of reliable and solid figures from an accounting point of view."

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