Contrary to what many believed at the time, the working relationship between a minister of labor who carried the Communist Party card and the leader of Spain’s major business federation began with a genuine marathon of agreements and understandings. Yolanda Díaz had only ten days in the portfolio when she secured a deal with Antonio Garamendi and the general secretaries of CCOO and UGT to raise the minimum interprofessional salary from 900 to 950 euros.
It marked the start of a productive phase of social dialogue, whose peak culminated in a reform of labor relations that, four years later, faces serious strains and the likely path to the most significant rift since the coalition government took office: a law aimed at reducing the weekly working hours to 37.5.
Emergencia pandémica
Less than two months before the government ordered a population lockdown due to the coronavirus pandemic, Díaz, the CEOE, CCOO, and UGT delivered a bold move and closed the first in a series of tripartite agreements, kicking off one of the most fruitful periods of social dialogue. After that initial minimum wage achievement, the pandemic arrived, and that exceptional moment laid the groundwork for joint government, employer, and union action on the ERTE mechanism. This tool, already in place, was renewed and adapted to the Covid context and ended up covering more than three million workers during the darkest moments of the crisis.
That mechanism was renewed in subsequent social negotiations, always with tripartite consensus. State funding to protect worker and business incomes lubricated the deals, which extended to the first remote-work law, the Rider law, an initial pension reform, and, finally, the crown jewel of the last legislative term: the labor reform. Parliament approved that reform with the support of a single vote from a PP deputy who was voting from home due to gastroenteritis, an act that Díaz herself later suggested could have forced the vice presidency to resign if it failed to pass.
The high point of social dialogue in the last term was confirmed just before Christmas 2021. For a period, the employers’ side walked away from the agreement, but Garamendi’s forces eventually joined, applying a strategy to minimize damage. The dependence of the parliamentary coalition on left-wing groups like ERC or EH Bildu threatened to radicalize the reform if the employers did not back it. CEOE finally accepted, with the condition that no word be changed during the parliamentary process, a demand that nearly derailed the deal but ultimately, due to a procedural error, managed to survive.
The uneasy relationship between Garamendi and Casado
The tripartite accord did not come without cost for the CEOE president, who saw his long-standing good ties with the PP, then led by Pablo Casado, begin to fray. According to various well-informed sources, Casado’s close ally Teodoro García Egea explored the possibility of backing a rival candidacy to Garamendi in the November 2022 workers’ council elections. The main obstacle to that plan was Casado’s own exit from the leadership of the PP, dethroned about six months later by his own ranks.
Political pressures shaped the dynamic between the government and the CEOE, especially when the former opened the door to pardons for imprisoned Catalan separatists in an attempt to normalize ties with the Generalitat. “If this ends with normalizing relations, welcome,” Garamendi said during a visit to Barcelona for the Cercle d’Economia. The external and internal pressure he faced showed up the moment when, days later, the CEOE’s general assembly rose to applaud him and stand in solidarity. “I have to admit I’ve had a few tough days,” he confessed publicly.
La irrupción de Conpymes
The labor reform proved to be the last major tripartite pact of social dialogue, after which discussions shifted to smaller, less media-visible issues — such as the recent protocol against LGTBI harassment in the workplace — and to more costly topics for employers, like additional minimum wage increases and the pension reform’s later stages.
Along the way, tensions spiked. They centered on moments when the government approved measures related to social dialogue quietly and then sought backing from a parliamentary ally. Case in point: the strengthened role of labor inspectors in enforcing labor rules, agreed with EH Bildu. More recently, there has been a trend toward prioritizing regional or provincial agreements over national ones, an arrangement negotiated with the PNV. Moves like these were criticized by the CEOE for bypassing prior consultation.
The height of tension occurred at the end of May when the executive opened the door for Pimec, a Catalan rival to the CEOE, to participate in national-scale social dialogue. Its formal inclusion in the Economic and Social Committee was symbolic for now, but it threatens the long-standing dominance of the CEOE in representing business interests. Garamendi’s team accused the government of trying to “dismantle the social dialogue,” pushing the relationship toward a breaking point this term. In response, the Garamendi camp argued that a united front was necessary to protect the system.
Una complicada aritmética parlamentaria
The current government faces a challenging arithmetic in this legislature, a factor that does not help improve ties with business leaders. It was notable that Pedro Sánchez’s re-election as president was met with a chorus of boos from business attendees at the Quiero Corredor event in Madrid.
Looking ahead, the present configuration creates incentives for theCEO to influence allied groups like Junts or the PNV, historically sympathetic to their positions, and to block measures that could be seen as unfriendly to business interests.
That is the premise repeatedly advanced by Foment del Treball, a prominent Catalan federation within the CEOE orbit, which has been openly critical of the government’s approach to the working week reduction. Under Josep Sánchez Llibre, Foment argues against negotiating terms that would impose excessive intrusions into core employer prerogatives. Cepyme, under the CEOE umbrella as well, is preparing for events that underscore the political sensitivity around labor policy in this period.
Note: These reflections reflect ongoing reporting and analysis from industry observers and political insiders. [Citation: Industry analyses, labor policy coverage, and parliamentary records.]