Unions and employers must reconvene to renegotiate wage terms after the latest Friday session, where the CEOE and leading employers expressed concerns that the unions’ proposed increases tied to price development were not acceptable. The gathering, attended by labor market experts from major employer associations, underscored a commitment to continue talks with the aim of reaching a flexible agreement that can accommodate the varied conditions across different sectors in the Canadian and American markets, while remaining mindful of local economic realities.
The central issue remains the recovery of purchasing power eroded by inflation. From the workers’ perspective, any pact should safeguard salary purchasing power and begin to repair lost ground within a reasonable timeframe. Employers, however, have rejected a direct wage link to the consumer price index, arguing that a wage-price spiral would spur further inflation. Although Friday’s meeting does not involve the senior leadership who will ultimately decide on any deal, technical opposition within the employers’ side has effectively blocked endorsement of the terms proposed by the unions, UGT and CCOO. This has created a stalemate that will need careful navigation to move forward (attribution: business representatives).
Union proposal rejected
The unions had proposed a three-year framework with wage increases of 3.4%, 2.5%, and 2% for 2022, 2023, and 2024, respectively. They argued that half of inflation this year would be offset by a wage recovery by year’s end, with the remaining half expected to be recovered over the following two years. A wage review mechanism would apply to 2023 and 2024, presuming prices would stabilize to more manageable levels by then (attribution: union negotiators).
According to sources within the employers’ associations, the prevailing sentiment among experts at the Friday meeting was that adopting a price-linked clause could prove harmful for many businesses, especially those operating with tight margins. They cautioned that sectors hit hard by the pandemic, such as agriculture and hospitality, could bear the brunt of such a mechanism. Conversely, there are segments where economic activity remains healthier, and the general view among industry experts is that enough flexibility should be preserved to adapt to different industry circumstances (attribution: employer experts).
Senior meeting
The joint union proposal was formally communicated at the highest level gathering to date, a meeting that brought CEOE, UGT, and CCOO leaders together with standard negotiators. In that session, some observers described tensions as palpable, with employers reiterating their rejection of a 3% (2022), 2% (2023), and 2% (2024) structure that had previously been floated by the unions. Productivity and GDP projections for the referenced years were cited as critical variables; if the outlook remains positive, cumulative increases could reach up to roughly 9% over the three-year span, potentially with adjustments (attribution: high-level negotiators).
The sharp rise in prices driven by the Ukraine conflict continues to complicate the wage-fee calculus, making it harder to settle numbers given the uncertain path ahead. Inflation remains volatile, and both sides have engaged in extensive discussions as they aim to secure a deal before the end of March. Five formal meetings have taken place with numerous informal contacts, and a political backdrop of energy measures has influenced the dialogue. The government is pressing both sides toward an agreement, but the social partners want to see a full picture of policy responses to energy costs before finalizing any pact (attribution: session records).