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.
Showing posts with label Fijo discontinuo. Show all posts
Showing posts with label Fijo discontinuo. Show all posts
Tuesday, March 15, 2016
Saturday, January 02, 2016
Seasonality And Jobs: The real problems for Mallorca's tourism
Things will be much as they were in 2016. The themes that dominated 2015 will be those most in focus this year. At island level, these will be all-inclusives, flights, holiday rentals, overcrowding, labour laws and employment, seasonality, the tourist tax, urban and rural planning and regulation. More widely, there will be the uncertainties of instability in other destinations and of terrorism. Mallorca will continue to benefit, but the uncertainties are such that atrocities closer to home can never be ruled out.
The year should see a raft of legislative measures with implications for each of the island-level issues. Despite its own uncertainty, the tax is the one for which there is some clarity. But the chaotic process that has so far surrounded it is not a good omen for when it finally comes into effect. The government, so determined to have it in place for the start of the season and to justify its annual budget, is ignoring the administrative difficulties it will create for different sectors of the tourism industry. It should have looked at the lesson of Catalonia and scheduled introduction for November, as was the case in Catalonia in 2012.
While issues such as the tax are of general and wide interest - and the same can be said of all-inclusives, flights and rentals - 2016 may well become a year in which the less headline-grabbing issues surrounding employment take centre stage. The regional government has already signalled its intentions to get tough on employment and tax fraud, with thinly veiled hints that big players are going to be put under scrutiny.
The German television report at the end of August which exposed alleged labour abuses by hotels and other businesses in the hospitality sector caused minimal ripples among the British on the island. But it most certainly was taken note of elsewhere. Biel Barceló, the tourism minister, said that such negative publicity can be damaging for tourism but he acknowledged that it cannot be ignored. As a member of a government that is committed to rooting out poor or illegal labour practices, he is party to an effort in which his ministry will be collaborating with the employment ministry, the tax agency and social security. Ideologically for this current government, the exposure of a big fish would represent a triumph. There are plenty of businesses which should feel that they are on notice and should be careful this year.
Labour abuses apart, there is the whole issue of the structure of employment. We have heard a great deal about the lack of job security in the Mallorca tourism industry but comparatively little about a key aspect of employment which provides this security - the system of "fijo discontinuo".
Some twenty-five years in existence, this was introduced largely in response to union demands to tackle exactly the same issue of job insecurity. However, over the years it has come to be seen - and is - of benefit to different parties: employees with such contracts and hoteliers. As such, it has been identified by many as a key reason, if not the key reason, for hotels closing in the off-season. So long as hoteliers have secured ample returns in the summer season, they have no incentive to open, while those on "fijo discontinuo" can collect benefit in the knowledge of their job awaiting them the following season.
Politically, it is not a subject that gets a great deal of airing, but this isn't to say that political parties don't take a view on it. Podemos, for example, is opposed to it because it benefits the great ogre - in its eyes - the hoteliers. Meanwhile, under national government budget proposals, there is supposedly to be an extension of incentives to hotels to keep staff on "fijo discontinuo" contracts working for at least ten months of the year, as opposed to the seven which is typical. The incentive would be on social security contributions: in effect, a 50% discount, and what has been calculated as an average saving of 675 euros per employee. In the Balearics, as an example, there are some 14,000 workers in the industry who have such contracts.
But seasonality, which is at the heart of so many of the structural and market malaises that affect Mallorca, its general economy and its tourism industry, has been an issue which has exercised minds ever since there was a mass tourism industry. Despite allusions to some one-time golden age, which never existed (look back at the tourist numbers if you don't believe me) and that has certainly not existed this century, seasonality will never be adequately tackled. The weather is of course a factor, but as important is the complete failure of various parties to address the issue seriously or with any sense of harmony. We'll hear talk of winter tourism taking off this year, but it will remain illusory. If only Mallorca were Tenerife.
The year should see a raft of legislative measures with implications for each of the island-level issues. Despite its own uncertainty, the tax is the one for which there is some clarity. But the chaotic process that has so far surrounded it is not a good omen for when it finally comes into effect. The government, so determined to have it in place for the start of the season and to justify its annual budget, is ignoring the administrative difficulties it will create for different sectors of the tourism industry. It should have looked at the lesson of Catalonia and scheduled introduction for November, as was the case in Catalonia in 2012.
While issues such as the tax are of general and wide interest - and the same can be said of all-inclusives, flights and rentals - 2016 may well become a year in which the less headline-grabbing issues surrounding employment take centre stage. The regional government has already signalled its intentions to get tough on employment and tax fraud, with thinly veiled hints that big players are going to be put under scrutiny.
The German television report at the end of August which exposed alleged labour abuses by hotels and other businesses in the hospitality sector caused minimal ripples among the British on the island. But it most certainly was taken note of elsewhere. Biel Barceló, the tourism minister, said that such negative publicity can be damaging for tourism but he acknowledged that it cannot be ignored. As a member of a government that is committed to rooting out poor or illegal labour practices, he is party to an effort in which his ministry will be collaborating with the employment ministry, the tax agency and social security. Ideologically for this current government, the exposure of a big fish would represent a triumph. There are plenty of businesses which should feel that they are on notice and should be careful this year.
Labour abuses apart, there is the whole issue of the structure of employment. We have heard a great deal about the lack of job security in the Mallorca tourism industry but comparatively little about a key aspect of employment which provides this security - the system of "fijo discontinuo".
Some twenty-five years in existence, this was introduced largely in response to union demands to tackle exactly the same issue of job insecurity. However, over the years it has come to be seen - and is - of benefit to different parties: employees with such contracts and hoteliers. As such, it has been identified by many as a key reason, if not the key reason, for hotels closing in the off-season. So long as hoteliers have secured ample returns in the summer season, they have no incentive to open, while those on "fijo discontinuo" can collect benefit in the knowledge of their job awaiting them the following season.
Politically, it is not a subject that gets a great deal of airing, but this isn't to say that political parties don't take a view on it. Podemos, for example, is opposed to it because it benefits the great ogre - in its eyes - the hoteliers. Meanwhile, under national government budget proposals, there is supposedly to be an extension of incentives to hotels to keep staff on "fijo discontinuo" contracts working for at least ten months of the year, as opposed to the seven which is typical. The incentive would be on social security contributions: in effect, a 50% discount, and what has been calculated as an average saving of 675 euros per employee. In the Balearics, as an example, there are some 14,000 workers in the industry who have such contracts.
But seasonality, which is at the heart of so many of the structural and market malaises that affect Mallorca, its general economy and its tourism industry, has been an issue which has exercised minds ever since there was a mass tourism industry. Despite allusions to some one-time golden age, which never existed (look back at the tourist numbers if you don't believe me) and that has certainly not existed this century, seasonality will never be adequately tackled. The weather is of course a factor, but as important is the complete failure of various parties to address the issue seriously or with any sense of harmony. We'll hear talk of winter tourism taking off this year, but it will remain illusory. If only Mallorca were Tenerife.
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