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Unions mull concessions offered on labor reform

In bid to gain consensus, government clarifies cheap-firing clauses in last year's law

In an effort to win over labor unions, the government has drawn up a draft decree aimed at clarifying the economic grounds by which companies can lay off workers with reduced severance entitlements.

The draft, which has been handed over to the unions, is one of the government's bargaining chips in a bid to win an ambitious political and social pact to help strengthen Spain's solvency and improve its image abroad, which has been battered by the global markets. Prime Minister José Luis Rodríguez Zapatero is hoping to attain support on a range of issues from the unions and employers' groups by January 25, the day the government will present its pension reform proposal to Congress.

Controversial labor reforms approved by Congress in September of last year allow companies to dismiss workers with compensation of only 20 days' pay for every year worked, compared with a maximum of 45 days if they are "facing an adverse economic situation in such cases as actual or forecast losses."

However, the CCOO and UGT unions argued that the law was vague and called a general strike on September 29 to protest the labor reform package.

The draft decree, to which EL PAÍS has had access, and has been sent to the unions, states that companies cannot have recourse to cheaper sacking by alleging losses that are "merely one-off." Firms will be obliged to submit a "technical report" justifying the base for forecasting losses.

From the time a company decides to apply for a deferral to pay employees with less severance based on economic grounds, it must come up with a report showing profits and losses from years past, and evidence that projected losses won't be merely temporary. In an appendix to the draft, the government acknowledges that: "The question arises that forecasts refer to future, and as such, uncertain events, which excludes the availability of reliable and solid figures from an accounting point of view."