New Unemployment Protection Reform Agreed upon by Spanish Government and Unions: Will it Benefit Job Seekers and the Economy?

A new draft law to reform unemployment protection in Spain has been agreed upon by the government and unions UGT and CCOO. This law will affect both benefits and subsidies collected when the benefit is exhausted or if one is not entitled to it. The reform aims to protect a wider range of individuals and increase the level of support provided, including simplifying access to subsidies and making benefits compatible with employment, encouraging job seekers to re-enter the workforce.

The reform has undergone revisions following an initial rejection by Congress in January. The changes focus on maintaining a Social Security premium of 125% for subsidies to individuals over 52 years of age. The government is working towards ensuring the norm is approved in Congress in a timely manner to access European funds, but parliamentary processing deadlines suggest meeting this date may be challenging. Failing to meet this deadline could jeopardize Spain’s access to the fourth payment of European funds.

However, there are concerns about the impact of this reform amidst the extension of the General State Budgets, especially regarding its economic implications. Employers’ associations have expressed their dissatisfaction with the lack of negotiation and presentation of an economic report accompanying the reform, as well as concerns about its potential impact on employment levels.

The government has remained hopeful that they can secure a tripartite agreement with CEOE and Cepyme, despite their initial opposition to the reform. They believe that this agreement would lead to greater stability in employment protection laws and provide more security for workers.