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Congress to review wage reform bill

Thu 23rd Jun 2011

Parliament voted on Wednesday in favour of reforming the country's wage reform bill, intended to make the Spanish economy more competitive and which basically allows employers to negotiate salary levels with their own employees. The proposal has attracted widespread criticism from Business groups and Union leaders alike.

Lawmakers will now fine-tune the reforms, just one of a series of measures that Spain has made to address a struggling economy and high cost of debt, which could force the country to seek a similar bailout as seen in other Eurozone member states.

The changes now make it easier for companies to negotiate salaries with just their own union members, where before they were agreed across entire industrial sectors or geographical areas, which businesses said made it hard for them to adjust when they were witnessing a fall in productivity or profitability. Arbitration is to be included as a final step in the process when neither side can find an agreement.

Spain has the highest unemployment rate in the EU, largely due to inflexible wage contracts and employment laws that the Socialist government has tried to reform since the euro zone debt crisis. Salaries have also increased more dramatically in Spain than in other European countries, making the job market less competitive.

Earlier this week the Bank of Spain's Governor, Miguel Angel Fernandez Ordonez, called on Congress to extend the collective bargaining reforms.

Although intended to make the employment market more flexible and lead to an improvement in employment levels and the overall economy, the M15 protest group remain unhappy.

The group, also calling themselves 'Los Indignados', have based much of their campaign on demanding that the government addresses the country's unemployment levels, set up camp outside Congress overnight in protest over what it sees as an infringement against the rights of the workers.

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