Failure of Temporary Contracting in Spain as a Measure to Promote Employment

High dismissal has reduced hiring in job creation. This is why temporary contracting has been used as a technique to overcome these business reluc-tances. However, this objective has not been fulfilled. Indeed quite the opposite in fact as the labour market has generally become precarious. The ultimate outcome is a widened inequality gap and workers' poverty.


Promoting Temporary Hiring as a Measure to Promote Employment. Regulatory Stages and Their Outcomes
The flexibility process of Spanish occupational regulations has been basically motivated by an attempt to appeal to businesspeople more in order to promote and increase hiring, while lowering high unemployment rates, which Spain has always had more or less similar rates.In fact, these attempts have given way to amendments being continuously made to regulations, which have not always met the desired objective.Nevertheless, the traditional full-time hiring model of indefinite duration has been left to one side to favour temporary part-time hiring, which is currently the main feature of the present Spanish hiring system.In fact the temporary characterisation of a job refers to the specific duration of contractual obligations to which parties are submitted, whose applicability is subjected to the established term ending.Temporary work is related to the total duration of a labour relation, which is the opposite to one of indefinite duration.

Stage 1:
From the Spanish Transition to the Verge of the Liberalisation Starting (1980-1993) It is worth remembering that the Workers Statute (WS) started to establish the work stability principle by prioritising indefinite over temporary hiring, and by implementing temporary hiring in those specific assumed cases in which the reason for such hiring was justified: Article 15 of the WS.Therefore, as temporary contracting had to be justified, it was impossible to establish the number of temporary workers that a company had to have, and this had to depend on there being an effective reason for such hiring, and temporary contracting could only take place when the assumptions foreseen by law actually came into being.Nonetheless, the wording employed in some assumed cases (15.1b;WS) was quite extensive: market circumstances, accumulating tasks and too many orders which doubtlessly aimed to encourage hiring and to respond to the very high unemployment rates at that time.Moreover, Article 17.3 of the WS included the possibility of the government being able to regulate measures related to reserving, duration or preference in employment in order to facilitate the hiring of certain groups of workers.So it authorised temporary hiring with no specific justification as a measure to encourage employment.The unemployment rate in 1980 was 12.43%'.
Despite the efforts made to lower unemployment rates, 4 years later they reached 21.1%2, with 24.6% for women and 19.6% for men, and were significantly higher for young people at 44.57%3.This obliged the lawmaker to perfect hiring formulae in an attempt to create as many job posts as possible.These formulae included temporary hiring and part-time hiring (Ruano-Albertos,
Therefore, the reform made by Law 32/1984, of 2 August, on modifying certain articles in Law 8/1980, was justified as indicated in its Preamble by the need for the "...adaptation of the institutional frame regulating the labour market to some new circumstances of the Spanish economy after the economic crisis in the last 10 years".This constituted the pressing demand to create as many jobs as possible, and was a fundamental and priority objective of the government's programme.Consequently, temporary hiring was promoted as a measure to encourage employment, which was regulated more clearly with more legal security by introducing a new way of temporary hiring when a new working activity was launched for the first 3 years that it remained.Here the idea was to reduce the risks of new investments while feasibility perspectives for these working activities were unavailable in order to well establish them.Moreover, given the very high unemployment rates for young adults, encouragement was made to hire them using the contracts employed in placements and for training, and there was a new feature: the relief contract.In this way, contracts could: form part of placements and training by extending their maximum duration to 3 years, and by extending the subsequent period to 4 years after becoming qualified, during which the on-the-job training/employment contract was signed.Likewise, the maximum age limit was raised to 20 years for training contracts; this limit was not considered for disabled workers, and part of the working day was cut for workers so they could continue with their education.
Despite the drive behind such contracts, the response was not the intended one because unemployment rates in successive years were still very high, i. as long as legally possible, being continued for another year up to a 4-year period.Employers were encouraged to make these temporary contracts indefinite after 4 years and the companies that did so were subsidised.The seriousness of the economic situation and its incidence on the labour mar-  initial temporary hiring, which was 63 days.This meant that the philosophy followed to favour stabler job creation led to Law 35/2010, of 17 September, with urgent measures to reform the labour market, whose objective was to reduce the duality of the Spanish labour market by adopting measures that tended to restrict, on the one hand, the unjustified use of temporary hiring and, on the other hand (as set out in its Presentation of Reasons), to favour indefinite hiring.
Among the measures taken to restrict the unjustified use of temporary hiring, a temporary and maximum limit was set in contracts signed for certain manual work or services, by means of which such contracted work would be considered permanent.Likewise, in order to dissuade temporary hiring, compensation rose to 12 worked days when the most widely used temporary contracts ended, and adjustments were made to the regulation passed in 2006 to avoid successive series of temporary contracts being signed to make this regulation more efficient.
Nonetheless, this regulation was temporarily suspended in 2011" because the given situation at the time had undesirable effects caused by temporary contracts not being renewed, which would have a negative effect on employment continuing.
Unfortunately, the 2010 labour reform did no manage to reduce either employment or temporary hiring.The economic crisis of the time and its strong impact on some activities were determining factors of jobs being destroyed.Indeed in 2011, job losses were so severe that indefinite employment considerably dropped.The number of workers who lost indefinite employment came to 402,000 in 2012, which is a drop of 3.6% of the annual mean compared to the year before 9 , and temporary employment also lowered.The temporary hiring rate lowered to 23.6%, which was almost 3 points less than the year before 20 .Notwithstanding, the temporary hiring rate was still extremely high, especially for young adults 2 1 under the age of 25 years.Once again the duration of temporary contracts became shorter 22 .The sectors most negatively affected by this situation were the building sector, the manufacturing sector and the services sector, especially hotel trade.
With a view to favour job creation, promote indefinite hiring and drive internal flexibility, Law 3/2012, of 6 July, was passed.This law, for which no consensus was reached with social partners, led to a major amendment to the WS in, among others, matters referring to ways to hire, internal/external flexibility, labour intermediation, incentives to hire and professional training towards employment, and also in negotiation issues: regulations on determining the negotiation structure and consensus among agreements, as well as an agreement re- maining in force until a new one was signed.Regarding ways to hire, and to encourage indefinite hiring, a new indefinite contract was introduced for companies with fewer than 50 workers whose distinguishing characteristics lay in the time the workers' test period lasted, which was set at 1 year, along with a series of tax incentives for companies and reductions in the Social Security payments that businesses paid, plus other certain requirements and for given groups.
Modifications were also made to the legal part-time hiring regime, while the contract to promote indefinite hiring was done away with.Another important aspect of this reform had to do with lowering the amount paid to compensate wrongful dismissal.Nonetheless, and despite this series of flexibilising measures for the labour market, 2013 started with a very high unemployment rate (26.1%).
The and more specifically against abuse in short temporary hiring (Sala Franco & L6pez Terrada, 2017), led to Royal Decree Law 28/2018, of 28 December, to revalue public pensions and other urgent social, occupational and employment matters, namely a series of Social Security measures.The intention of these measures was to: on the one hand, place those workers with such contracts on the same level in social protection terms (Moreno Romero, 2019: p. 115) as those with longer lasting contacts; on the other hand, to increase tax payments in these contracts as a dissuasive measure for businesspeople.As the unemployment rate in Spain had gone below 15%, the initiatives made in the Spanish regulation framework on work contracts, and conditioned to these tax payments, were revoked.Even though the unemployment rate had dropped to 14.55%29, in 2018 the temporary hiring rate was 26.8%, it was 26.9% in the fourth quarter of 2018, and was around 71%30 for young adults under the age of 30.

Conclusion
We have seen that, despite successive strategies being adopted to activate employment, the presented data clearly reveal temporary hiring and a marked rotation in the labour market predominate, along with an obvious difficulty to create stabler jobs.Temporary hiring has not helped to lower unemployment rates, the assumed objective of a policy that made an exception with the general rule of favouring permanent job contracts.Outsourcing (Vicente-Palacio, 2016, 2018), which is usually resorted to by companies to integrate their productive activity (Falguera Bar6, 2015: p. 10), and using temporary work agencies to cover vacancies, has inevitably contributed to increasing temporary hiring, whose duration is mostly short.
Precarious working conditions and low salaries cannot continue to support the labour market.With this new framework, it is necessary to promote stable employment which, as we see it, cannot come up against more productivity, but quite the reverse in fact.We ought not to forget that Spanish regulations prioritise not only the stable employment principle, but also indefinite hiring over temporary hiring insofar as temporary hiring is only acceptable in certain assumed cases with a justified temporary hiring cause.In fact the Work Inspection Department 3 ' has intensified the fight against the fraudulent use of such contracts (Ballester-Pastor, 2019: p. 137); this is demonstrated by continuous actions that intend to avoid temporary hiring going against the law.According to 2017 data 32 , the result of such action was that approximately 92,925 temporary work contracts that went against the law were converted into indefinite ones, which is a good indication of its fraudulent use.
Consequently, accurate measures must be taken to avoid any abuse and fraud  when business people use such ways to hire workers when the justified causes for them do not coincide.Spain continues to register a higher percentage of temporary hiring, and the risk of workers with such contracts being poor is, according to the EU 3 3 , 3-fold higher than for workers with indefinite contracts.Spain cannot remain at the top of the list of EU countries with the highest poverty levels.
Therefore, in order to make the flexibility of labour regulations compatible with ensuring dignified working conditions, this objective must be fundamental for both the government and social partners.

'
Source: EPA.Historical series.attemptwas made to change the previous hiring policy, which had basically focused on temporary hiring as in the legal modifications made as of 1984.The result of the above-cited agreement was that Law 63/1997 was passed with urgent measures to improve the labour market and to encourage indefinite hiring, and challenges were marked by high unemployment rates for young adults and a considerable increase in temporary hiring.This meant that measures were taken to, on the one hand, favour labour insertion and theoretical-practical training for young adults and, on the other hand, specify and restrain assumed cases of contracting labour, particularly as regards manual work or services, as well as provisional hiring based on production circumstances.Temporary hiring for launching new activities ended.A change was also made in the hiring model to encourage employing those groups facing certain difficulties.Briefly, the measures taken to promote employment basically addressed stabler employment for the unemployed and to convert temporary contracts into indefinite ones.The pursued philosophy was the same: to lower unemployment rates while favouring a change in the existing direction to favour indefinite contracts.However, the taken measures still did not lead to the desired results.Regulations in favour of stable employment continued, despite insistence on the need for a flexible labour market.In Europe after the Treaty of Amsterdam came into force, European social agents signed an Agreement on 18 March 1999 about temporary work contracts 9 , as set out in an Annexe in Directive 1999/70/EE, of 28 June.What this agreement intended was to avoid possible discriminations in work conditions by establishing a framework to favour temporarily hired workers being treated the same.In parallel, the importance of such contracts was stressed to meet business requirements in certain sectors or occupations, despite considering that indefinite work contracts were those which contributed to both workers' quality of life and their improved performance.Notwithstanding, the essential problems of the Spanish labour market continued because the temporary hiring rate still exceeded 33%"o.The most widely used contracts were still temporary, and hiring people for manual work or services followed the same trend as that of previous years.What is more, the number of temporary contracts increased, especially short-term hiring; the reason for lay in increased part-time hiring, which was essentially temporary and not indefinite".Therefore, in order to redirect the situation towards stabler employment, the subsequent regulation once again considered encouraging stable employment.Law 12/2001, of 9 July, with urgent measures to reform the labour market in order to increase employment and improve its quality, contemplated Directive 1999/70/EC on temporary employment and, although a new temporary 'Framework Agreement about temporary employment, signed on 18 March 1999, which comes as an Annexe in Directive 1999/70/EE of 28 June.It sets out the minimum conditions for temporary work contracts."oSource: EPA.Historical series."Source: EPA.Historical series.
Law 10/2011, of 26 August, on urgent measures to promote employment for young adults, encourage stable employment and maintain the professional requalification programme of people whose unemployment benefit had ended."Source: INE, Working population survey.20 Source: INE, Working population survey.2162% of people under the age of 25 were temporarily hired.Source: Eurostat Database.22 In the mean number of days, this reduction was 3.6 for all temporary contracts.SEPE.DOI: 10.4236/blr.2020.112038632 Beijing Law Review S. Ruano-Albertos Working population survey.30 Report no. 17 Young people, June 2018.Ministry of Work, Migration and Social Security."Master Plan for dignified work.State Inspection Agency belonging to the Ministry of Work and Social Security.Subsecretary of Employment and Social Security.State Inspection Agency of Work and Social Security.April 2018.Work and Social Security.

in Spain in 1990 represented 29.8%, while it was 10.2% in the EU15. So it was that the high incidence of temporary hiring helped a large group of workers to form with unstable jobs, very little protection when their contracts ended, low salaries, and scarce or no training offered to them by busi- nesspeople. More temporary contracts were signed by the female population than by men. In 1993, 37.2 per 100 of
long-term unemployed (50.4%) and dismissed young adults (55.5%) were still victims of the highest unemployment rates 23 .Consequently, the later law, namely Law 11/2013, of 26 July, on measures to support entrepreneurs and to stimulate growth and job creation, was yet another attempt to lower the aforementioned rates, and encouraged hiring young adults by reducing the amount of Social Security payments that businesses paid for microenterprises that engaged in indefinite hiring.Furthermore, part-time hiring was encouraged if it was linked with unemployed young people's training.The use of part-time hiring even increased by improving certain aspects of part-time workers' social protection with Law 1/2014, of 28 February, Royal Decree Law 3/2014, of 28 February, 25 CES 2014 Report.26CES2015Report.27CES2016 Report.28CES 2017 Report.