Tuesday, March 15, 2016

"Fijo Discontinuo": Winter Tourism's Villain?

In 1984, the PSOE national government of Felipe Gónzalez enacted labour legislation under which there would be a new form of employment contract. There was logic to this reform. The contract was intended to give some greater stability to a workforce which was engaged in seasonal sectors of the economy. Tourism was one of these. The contract was and is the "fijo discontinuo", essentially one by which an employee is retained but also laid off for a number of months, during which time he or she can claim benefit.

The contract has been subject to revision over the years and also to numerous legal cases, but its essence remains largely as it was thirty-two years ago while its use continues to grow. In August last year, it was reported that there were almost 70,000 employees in the Balearics who were registered with social security for this type of contract. As there were some 475,000 people signed on at the end of September 2015, employees working with this contract constituted getting on for 15% of the working population in employment. The 70,000 of last August were around 8,000 more than in August 2014, a fact that led one of the main unions, the CCOO, to complain that there were too many "discontinuo" contracts.

The complaint was ironic. It had been the unions who had pressed the Gónzalez government into creating "discontinuo", as it did ensure some greater job security. But that was thirty-two years ago. The general narrative surrounding employment contracts nowadays, one familiar to the Balearic regional government, is for work that limits even more the potential for job insecurity. And allied to this is the narrative of tackling seasonality, most obviously in the tourism sector.

Getting to grips with seasonality is a subject that is old as mass tourism. In the 1960s the tourism season ground to a halt in September. Go forward some years and there were some inroads - the pockets of resorts in Mallorca where there was discernible winter tourism business. It was never great, despite what some might suggest, but it did exist. By the end of the 1980s, some 25% of Mallorca's tourism was between November and April, though this was based on half the annual total today: roughly five million tourists. That it had come about owed little to political initiative. It was largely the consequence of tour operator business, but when the Balearics had become an autonomous region in 1983 the politicians had started talking up plans for dealing with seasonality. There were plans for the likes of cycling and golf, just as there are today.

The truth of the matter is that regardless of what politicians have ever said, seasonality has remained an issue and always has been an issue. The politicians keep returning to it and insisting that they will indeed be tackling it - as the current Balearic government is - but behind this talk has long been, so it is argued, a kind of conspiracy which allows talk to be cheap and to be spoken because it makes politicians appear to be doing something when they themselves have aligned themselves with forces that are inherently opposed to low-season tourism. And none more so than the "fijo discontinuo".

The argument goes that hoteliers have no incentive to remain open because they can shed a whole load of staff who will be looked after by the state and then take them on again the following spring. The employees themselves are happy with this state of affairs: several months off and the government pays them. And from this disincentive has sprung a collective lack of will and creativity that might truly tackle seasonality. For hoteliers, they have virtually no risk. They make their profits in the summer season and close up shop at the first sign of November coming into view. Everything is stacked in their favour because of the nature of employment.

There are commentators, such as the journalist Javier Mato, who attribute the low-season malaise to "fijo discontinuo". Mato has asked why, if it is such a good system, no other country has adopted it. But if it is such a negative influence, then what are the alternatives? Mallorca has far too much tourism infrastructure - hotels, restaurants, etc. It's fine for summer, but for the rest of the year it is unsustainable. Full-time contracts for any more than a small minority are out of the question.

There are, though, certain movements. The system of social security 50% "bonus" for "discontinuo" employees has been extended to now include February as well as March and November, as has been the case for three years. Is it in fact this labour modification which is leading to more hotel opening in Mallorca in these low-season months? And if it is, then why not extend it further? "Discontinuo" may not be perfect but it can be made to work better.

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