Del Fraile: “More companies are becoming aware of the importance of ensuring equality between women and men in the workplace.”
Gómez-Acebo & Pombo’s employment partner Ignacio del Fraile discusses the effects of the new hiring regulations in Spain and the effects of the country’s new equality obligations.
Leaders League: What are the challenges of advising international clients doing business in Spain?
Del Fraile: Advising foreign clients is a very enriching experience and in GA_P’s Labor Department we are very used to doing it, as the majority of our clients are international companies or foreign law firms. Apart from dealing with the cultural differences that may exist, the biggest challenge is being able to clearly explain how our complex labor system works. From my experience, Spanish legislation can be seen as very protectionist in comparison with other jurisdictions (primarily the Nordic and English-speaking ones) and it is common to find international clients that struggle when coping with labor issues in Spain. One of our main goals is to provide comfort to these clients by adapting to their needs, looking for creative solutions and above all, empathizing with them. We always try to make these clients’ journeys easier, ensuring that they do not feel overwhelmed with formal or bureaucratic labor issues.
In addition, most of the lawyers in our Employment Area have had international experience (secondments, international masters/courses, global conferences) and it really helps when dealing with foreign clients. For instance, I worked at the New York office of Littler Mendelson and it really helped me to understand employment-at-will and the US mentality, and it definitely gives me an advantage when dealing with North American clients.
How are companies adapting to the new hiring regulations limiting temporary contracts?
We hear from our clients that it has not been easy at all. Employers have been making real efforts for more than two years to overcome the various crises that have seriously affected their businesses (e.g., the Covid pandemic, the general rise in energy prices, etc.) and in addition to that, they are being required to adapt to the numerous legislative changes implemented during this time. The limitation of temporary contracts is one of the most relevant and will have the greatest and most direct impact on the Spanish labor scene. For instance, the abolition of the temporary contract for a specific job or service and the reduction of the maximum duration of the contracts (from three years to just six months) has inevitably forced many companies to readapt their business model and resort to alternative contract structures, such as temporary contracts based on production-related circumstances or fixed-discontinuous contracts.
The legislature’s intention may have been mainly to encourage companies to hire workers on a permanent basis and reduce the existing precarious indefinite employment rates in Spain, which are considerably higher than the average registered in the EU. However, the decision to eliminate one of the most widely used contract structures and reduce the maximum duration of temporary contracts has come at a time when some companies are struggling not to go bankrupt and hiring costs are being scrutinized. It seems that we will have to wait a few months to see whether this reform has the expected result.
What effects do you see the new Equality Law having on both Spanish and international companies operating in Spain?
As is happening with many other social issues, more and more companies are becoming aware of the importance of ensuring absolute equality between women and men in the workplace. Most of our clients - both local and foreign - are catching up on this matter and taking it very seriously, carrying out the corresponding internal negotiations with workers and their legal representatives and implementing the necessary measures to achieve that goal. From what we can see, the most significant advances are taking place in the industrial sector and in managerial positions.
Accordingly, not only are companies with more than 50 employees required to negotiate a plan that includes the necessary measures to guarantee equal professional opportunities between women and men, but all companies are also required to carry out a salary register in order to detect possible differences between the wages paid to employees of different sexes. This means that all companies must analyze the existing situation and try to reduce any possible imbalance, at the risk of receiving significant economic fines if they do not comply with the law.
What benefits do you see from your membership with the Employment Law Alliance?
GA_P is really glad to belong to the Employment Law Alliance (ELA). The ELA is the largest and most prestigious network of labor and employment lawyers. With more than 3,000 attorneys in over 120 countries, we provide HR executives, general counsels and business leaders with comprehensive labor and employment and immigration services.
Ever since we became part of this prestigious group, we have had the confidence that any labor issue that our clients may have in foreign countries can be referred to a top-tier law firm that guarantees high quality service. And our colleagues from foreign law firms know that they can count on GA_P’s entire labor team to support their clients in whatever legal needs they may have in Spain. Thanks to the alliance, we have had the opportunity to advise on many interesting matters and extended our client network considerably. It is definitely a win-win partnership.
How do you see the Spanish labor market adapting to the new regulations regarding remote working?
One of the good things that came from the pandemic is that companies have realized the importance of offering flexibility to employees and that well-organized remote working is not as bad as it is made out to be. Even the detractors of remote working have admitted that some flexibility can be very beneficial not only for the work environment and for the workers’ performance, but it may also imply relevant economic savings for the companies. There are currently a large number of companies that have implemented remote working policies and employees have received these measures in a very positive way. The pandemic has also served to show that although flexibility is important, direct contact with colleagues is as well. Therefore, most companies are committed to a hybrid system that allows the team to maintain close contact and at the same time enjoy some days of remote working per week.
Countless articles have been written about how the pandemic has changed the way work is organized and how flexibility in companies has increased in spite of remote working. In my view, this change has been especially noticeable in Spain, where face-to-face work was deeply ingrained in companies’ cultures before the pandemic and remote work was not in general a trusted system. Today, many businesses - including law firms - have found that employees perform even better if they can enjoy some flexibility.
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