MADRID (AP) — Spain's new conservative government approved sweeping labor market reforms on Friday as part of a drive to retool a sick economy and solve Europe's worst unemployment nightmare.
The decree gives companies hiring incentives such as cheaper severance packages and offers tax breaks for taking on young people. It does away with severance arrangements in which some workers got up to 45 days of pay per year worked, and lowered this to 33 days in most cases for new contracts, although the change is not retroactive.
Companies facing hard times will also be able to bow out of collective bargaining agreements reached with unions, and have greater flexibility to adjust working conditions such as schedules, workplace tasks and wages depending on how the economy and the company are doing.
A clause allowing companies to keep workers on temporary contracts with little benefits for up to three years will be changed to lower the span to 24 months. Nearly a third of the workforce in Spain is on temporary contracts, a huge percentage that makes the jobless rate tremendous volatile.
Small companies with 50 workers or fewer will get tax breaks of euro3,000 ($3,986) for hiring people under 30 who are seeking their first job. Spain's unemployment rate is nearly 23 percent, for people under 25 it approaches a staggering 48 percent.
http://www.nytimes.com/aponline/2012/02/10/business/AP-EU-Spain-Financial-Crisis.html?_r=1&ref=aponline
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