The crisis, golden opportunity for employers

Pressed hard by the recession and national debts, European governments are rewriting the labour law, whether watering down job protection or cutting wages. And employers are smiling.

Published on 23 March 2012 at 14:31

In Greece, Spain, Italy and Portugal, the crisis is raging. All of southern Europe has been laid low. All of southern Europe? Not exactly. Some people in these countries are seeing long-cherished wishes come true. One is Juan Rosell, head of the Spanish employers’ organization CEOE, who has been calling for a relaxation of job protection for years. Now the government has heeded his call. “It won’t be the last labour market reform,” prophesies Rosell, scenting victory. The crisis is his opportunity.

Businesses in Europe have the upper hand. Under pressure from recession and national debt, governments are rolling back workers’ rights across the board and pushing down labour costs. The aim is to make locations for investors cheaper and therefore more attractive. “Europe is on its way to becoming an entrepreneur’s paradise – on the backs of the workers,” complains Apostolos Kapsalis of the Research Institute of the Greek Trade Union Federation, GSEE.

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German-style reform?

Italian PM Mario Monti aims to complete his reform to the labour code, particularly Article 18, which governs unfair dismissal, by March 23. Italian employers have been calling for a modification for years, blaming it for the low competitivity of Italian industry. So far, no government has managed to take on the issue because of the fierce resistance put up by the unions.

The crux of the reform, writes La Repubblica, is getting rid of the obligation to reinstate an employee dismissed for economic reasons that are ruled inadequate by an employment tribunal. After the reform a judge will not be permitted to rule whether the grounds are valid, but only, if the dismissal proves unjustified, to require the company to compensate the dismissed employee. The reform, in turn, brings in measures to sustain temporary jobs and introduces a new form of unemployment compensation. While the reform has yet to get through Parliament, Italy’s largest union, the CGIL, has already threatened a general strike.

“Is the Monti government making its first big mistake?” asks Gian Enrico Rusconi in La Stampa. The Prime Minister has declared, in effect, that he has been inspired by the German model. However, he has forgotten that the latter is essentially based on consultation with social partners – an aspect Monti has so far ignored when referring to the need to bring Italy into line with other European countries. Rusconi explains –

It is time for Monti to come up with a better argument on the European dimension of his government’s action, without referring just to the market, to the stock markets and other indicators that he is very well aware are of only relative value. […] I suppose that even “technocrats” know just what an extraordinary and irreplaceable resource social consensus is for the effectiveness of the employment system.

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