Labour policy in the face of the COVID-19 socio-economic crisis in Spain: institutional change and social pacts

Abstract

PurposeThis study aims to analyse the institutional changes in the Spanish labour market in the light of the measures introduced to support workers during the COVID-19 crisis. Applying the theoretical framework the authors’ hypothesis is that the labour policy response to the crisis provoked by COVID-19 in Spain has ranged from strategy of preservation of the social democratic coalition to the anti-bourgeois bloc coalition with a greater presence of social pacts and the support of the social partners.Design/methodology/approachCombining the institutional theory of liberalisation trajectories, the four ideal-typical reform strategies and the social pacts literature, the authors analyse the change in the labour market policy orientation during the COVID-19 economic crisis in Spain.FindingsIn comparison to the Great Recession labour policy response, short-time work schemes and new benefits have characterised the 2020 labour policy strategy. Then, the labour policy response has oscillated between, on the one hand, a strategy of preservation of the social democratic coalition, which is characterised by measures to protect workers on the margins of the labour market without affecting the discretionary power of employers. On the other hand, a strategy of the anti-bourgeois bloc coalition, reflected in the employment safeguard clause that attempts to limit both external numerical flexibility and the increase in unemployment. Finally, the authors have analysed whether the labour policies after the COVID-19 crisis constitute a new round of social pacts in Spain and how this took place. They conclude that the main measures approved in the area of employment protection have been supported by social pacts and the social partners (trade unions and employers), as reflected in the signing of the Social Agreement in Defence of Employment (ASDE).Originality/valueTo the best of the authors’ knowledge, this is a significant contribution as it is the first article to point out that the labour policy represents a change in the trajectory of liberalisation, limiting the discretionary power of employers and re-regulating the labour market. The main measure of (re)regulation has been to safeguard employment and to avoid objective or unfair dismissals, which is the traditional form of adjustment. In other words, internal numerical flexibility has been promoted over external flexibility, thus significantly modifying the orientation of labour policy. Finally, the authors have found that social pacts have allowed for greater institutional coherence between legal changes and the behaviour of employers and workers.