CEOE, the business association led by Antonio Garamendi, intends to challenge the ultimatum issued by the Ministry of Labor and plans to attend the social dialogue meeting scheduled for next Monday about reducing the workweek to 37.5 hours without presenting a written proposal. This stance comes after the ministry, headed by Yolanda Díaz, pressed them in the most recent meeting on this topic, accusing the federation of hindering tripartite negotiations with the unions.
Sources close to CEOE indicated to a regional newspaper that the organization will not bring a written proposal to the July 1 social dialogue meeting because they see it as unnecessary. They argue that their proposals have already been voiced verbally in successive meetings. These ideas include agreeing workweek reductions at the bipartite level in collective agreements, extending the annual limit on overtime hours, and advancing measures to reduce workplace absenteeism. The Ministry of Labor has already circulated a draft law on reducing the workweek, and business leaders fear the written document now requested could be used against them by the government.
As a result, the federation, chaired by Garamendi, refuses to adhere to the pace set by Vice President and Labor Minister Yolanda Díaz, who, after electoral setbacks for Sumar in Galicia, the Basque Country, Catalonia, and Europe, has chosen to accelerate talks in an effort to reach an agreement on the matter before September. Entrepreneurs have grown wary, especially since the PSOE and PP have rebuilt bridges with an agreement to renew the General Council of the Judiciary (CGPJ).
Within the business ranks, voices urging patience are gaining strength, arguing against prolonging negotiations with the Ministry of Labor and the unions over reducing the weekly work hours from 40 to 38.5, with the same pay, by 2024 and to 37.5 by the end of the current legislative term.
One senior CEOE official and head of ATA, Lorenzo Amor, already indicated on Thursday that there is no point in filing objections to the government’s proposal, calling the negotiations a form of theater, according to remarks reported by a regional broadcaster and picked up by news agencies. A different executive within CEOE echoed the criticism, pointing to Yolanda Díaz’s flagship family of reforms as problematic for business interests. The general secretary of Foment, David Tornos, accused the minister of planning to undermine dialogue with an interventionist bill that would create new problems and higher costs for companies, remarks made during an event at Foment on the occasion of Company Day.
According to data from Cepyme, the subsidiary of CEOE, reducing the current 40-hour workweek to 37.5 hours at the same pay would raise salary costs for businesses by about 40 billion euros. To keep the same total hours, firms would have to hire more workers or extend hours for existing staff.
One high-ranking industry executive asked, “What’s the point of sending in a proposal now?” He pointed to the complex arithmetic of Congress and the difficulty of obtaining votes to slow the workweek reduction bill. Among business leaders who have long supported agreements that preserve a sense of national consensus and economic stability, the latest agreement between the PSOE and the PP to renew the leadership of the CGPJ has been viewed with cautious optimism. It is hoped that this bridge could be rebuilt to mitigate Díaz’s influence inside the government and soften her reform ambitions, including the workweek reduction. Still, the PSOE insists that the reduction is a government-wide project and continues to back the Labor Minister, according to a regional reporter. In the socialist ranks, there is also a push to support Díaz to bolster the Sumar political space, which has suffered from a string of poor electoral results.
Next Monday, July 1, the State Secretary for Employment is slated to meet again with CEOE representatives and labor unions. “If we show up next Monday with no alternative proposal from the business group, we will need to take some decision,” he stated after the last meeting. Although he did not specify what might happen if the CEOE does not present a written document, the wording of the warning was interpreted by the federation as an ultimatum.
In the Ministry of Labor, the prevailing view is that the negotiation will not extend far beyond the near future, regardless of whether an agreement is reached. The coalition’s electoral commitments call for reducing the workweek to the equivalent of 38.5 hours this year, and then to 37.5 hours starting January 1, 2025. To accomplish this, a draft law must be sent to the Congress, and depending on parliamentary timing and votes, it may not be published in the Official State Gazette (BOE) until late in the year.
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