THE SPANISH LABOUR PROBLEMS. |
Self imposed or culturally induced ?
The message that investment in Spanish industry sends throughout the world, is clear and unmistakeable – “do not invest in industry and be wary of unfair labour laws”. This is the main item in the preliminary studies which most professional entrepreneurs leading the team into the market expresses most misgivings about. Is it fair comment in the overall when markets are hard to find and Spain practically imports everything to its own detriment ?
The answer is a complex one, but one factor stands out sharply defined . - its labour courts are tinged with an aggressive and dangerous profile towards the unsuspecting investor in labour. It is inflexible and slanted towards the employee which despite its “judicial base”, provides a clear case of unconstitutional unfairness. In short the employer is criminalized and has to prove his innocence. The employer can be taken before its harsh administrators for any prefabricated claim based entirely on lies and false witnesses, and dragged through demeaning appearances, way away from base, to face the wiley and seasoned labour lawyers who twist reality to achieve the much coveted foot in the employment door. Whereas in most cases, the courts will decide in favour of unfair dismissal whatever the evidence (which has to be meticulously obtained by the employer in a short time), the compensation of a few hundred euros, will carry the massive sting of continued salary and social security contributions right up to the receipt of the sentence by the employer. In most cases, small companies with little or no cashflow, close up and the limited company and or property of the unprotected Secretary, embargoed and auctioned to selected contacts in the very court rooms (without general public admission). Such abuse of power is well documented and visual recordings of court proceedings are available to the parties involved. The use of these however is restricted to legal advisors and general publication is denied.
Recent media interviews with representatives of the Ministry of Labour responsible for these dubious courts, have concentrated on the question of indemnity per annum of employment avoiding the mention of the courts and their ability to keep employment open long after the employee has gone to work elsewhere. Since the employee is not required to attend proceedings, there is no knowing how much legal or illegal earnings have been obtained during the period the original, castigated employer continues to pay full salary and social security contributions. The system is totally illegal in terms of any European constitutional interpretation of justice but bringing it before Europe would require many years of member state judicial channels, a great deal of money and possible state retaliation.
Attacks on small businesses
There is little doubt that the prolonged and unfair treatment of small and medium sized employers has resulted in an aversion therapy result that has put hundreds of thousands on the dole. Only a cursory examination of a few cases, reveals the destructive power of these anomalous and little known institutions. For those without knowledge of its workings, the results can be devastating both financially and psychological. What is amazing is the ease with which they can be evoked even by an employee of a few weeks duration who claims to have worked for a much longer period in order to skilfully obtain the long months of salary to the end of the case despite losing the claim. All that the employee has to do is refuse to sign the cessation of employment and wait for the courts to do its work, making it impossible (even with unsupported claims) to reach an agreement through the preliminary acts of reconciliation at which the free legal advisors of the employee already claim thousands. This is because they already know that the courts will keep the employment door open and their claim to a precentage of the monies obtained from the employer, is assured. On the other side, most lawyers refuse to represent employers in the understanding that the other party is always likely to win and that “the legislation in this respect is ambiguous”. If and when they do, they demand thousands in advance for fear that they will not get paid whatever the outcome. Most are also fighting shy of courtrooms and will pull out after fruitless, pre hearing negotiations.
The system which the employer is unable to fight fairly, has to be brought in line with transparent constitutional judicial systems utilised in most countries of the Western world. The element of judicial blackmail evidenced in the inability to appeal without first paying up salary levels to the point of sentence, is encompassed in the continuation of salary and social security payments right up to the end of the process. The obvious effect is to panic an employer to pay whatever is demanded for fear of continued employment demands and galloping costs. Additionally there is every indication that this gamble will not pay off. Throughout the procedure, the humiliation and curt treatment of the employers considered guilty unless provable otherwise, ensures that further thoughts of new employment is discouraged. Many employers now insist on making employees sign indemnity documents, little understanding that these tactics are invalidated by these courts.
An easily manipulated system.
Taking employers to the courts is a very lucrative business both for labour lawyers and employees and has resulted in clogging up the system with hundreds of thousands of claims in any one area. Technically it is easy to hire and impossible to fire without horrendous losses. Those worse affected are ones with assets in their names since the others virtually close up overnight with little chance of being forced to pay up. Dismissing for any deliberate offence (waiters spitting before clients, insurbordination or subversive tactics, theft etc.) will almost certainly result in the use of the courts and ultimately cost as it has done hotel and restaurant owners, unthinkable sums which force them to close. The system therefore, encourages delincuency by making it a profitable game and in turn undermines standards. The closing of a very large number of hotels in the country attributed to bad management is in fact one of collective employee subversion covering up bad workmanship and rudeness to the demanding clientele. Walkouts are common and thoroughly enjoyed when reduction of workforce is announced.
Another entirely different job destructive issue which is not being faced is the extraordinary cost of social security payments and hidden extras like two unworked monthly salaries, an incredible amount of national holidays, absenteeism and indemnities, that practically double the salary levels officially agreed by the militant unions. This has been ignored by the international press in the past but is bringing the country to its knees. The employer contribution is almost 40 % of the salary against the 10 percent of countries like Britian. All taxes in Spain, direct and indirect, are punitive (stamp duty 7.5% + fees and double if Government amends the price they think the property should have been bought for!) wealth tax, foreign property rental income tax on empty property, inheritance tax, car transfer tax etc. This further discourages potential labour investors who view such expenses with indignity. The tax demands on the small and medium sized employer has kept the economy alive so far as it has done in most developing countries, but in Spain, because the Unions view them as class enemies, they are the stool pigeons of their abusive tactics. New European health and safety laws are now prime penalty instruments whic have proven to be the death blows anticipated. Competitors can address their jealousy in this direction and cause inspectors to rain on them with even light fines circulating around the 5000 euro mark – one sure way of clearing the way of unsuspecting competitors (often foreign as European Instutions have pointed out). The neo communistic union movement appears to look at the entrepeneur with disdain and publicly decries giving them any support for fear of “ increasing their social strength” As a result the labour government has avoided negotiations with the self employed institutional representative preferring to lead the way with the narrow Oligarchy of the giant muiltinationals despite the fact that these earn and keep their real monies abroad and who are not basically interested in creating employment locally but keen to receive the state aid they then invest in their overseas unregulated markets. Socialism in Spain, rooted in worker rights, is the last bastion of wealth or work generation. It prefers mistakingly to bloat the civil service ranks in pursuit of such employment and subsequently, as has been seen, dragging the whole economy into the ground. This elite structure of pampered, inefficient personnel needs to be reduced to less than half and the enormous slice that its executive allocates to itself, ruthlessly whittled down before any gains can be made in the direction of solvency. The problem lies, as has been seen with the military takeover, that they are unfireable and subsequently arrogant.
Massive developments with big margins.
Spain, has little stomach for manufacturing industries preferring the easy pickings of the construction industry based sometimes on illegal licencing, which as a result has been induced into creating a bubble that has virtually destroyed all possibilities of further employment in this sector for years to come. Rectifying its environmental destruction is also likely to take a very long period of time. It is no surprise therefore that rural tourism now leads the way, although it will be an equally long time before it can offer the sort of income that the ailing economy needs, to spark off significant and badly needed growth.
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