The idea of labour reform is almost exclusively associated with flexibilization. However, in several countries – some of which have a weak trade union tradition – labour market changes have shifted towards strengthening regulation and trade unions. In recent years, Chile, Mexico, the United States, Spain and Colombia have carried out reforms aimed at increasing the minimum wage and collective bargaining, reducing the number of hours worked, avoiding subcontracting and incorporating new groups such as platform workers. Knowing these cases is key to thinking about labour reform in the country.
Alternatives to labour flexibilization
It is undeniable that, over the last fifty years, the transformations in the world of work have been towards deregulation. Until recently, even in countries with strong unions, there was a predominance of initiatives aimed at decentralizing collective bargaining, making employment temporary, weakening union action or failing to recognise labour relations as such -for example, by subcontracting or regulating as “autonomous” jobs ostensibly commanded by an employer-, lowering firing costs, among others.
The fact that this position has predominated in the debate does not imply that it is the only one. On the one hand, countries with a strong trade union tradition in continental and Nordic Europe (such as the Netherlands, Belgium, Austria, Germany, and the Scandinavian countries) continue to have largely regulated labour markets and trade unions as central players. There, deregulation was less pronounced, and thus re-regulation was less pronounced.
On the other hand, in several countries, some even with a weak trade union tradition, such as the United States, Chile and Colombia, the debate on reforms has shifted from deregulation to strengthening regulation and trade unions. Nor do these reforms represent a return to the status quo of the 20th-century Fordist welfare state. In many cases, they are new responses to new problems. Rights for platform workers, limits to corporate relocation or new procedures for sustaining employment in sectors in crisis escape the traditional forms of protection of the last century.
These new inclusive reforms are neither majority nor hegemonic, but they offer alternatives in a scenario that until then was almost exclusively neoliberal.
Progressive labour reforms
Spain, Mexico, Chile, the United States and Colombia are some of the countries with progressive labour reform initiatives. Analyzing what happened in these governments gives us clues as to the characteristics and results of these proposals in both emerging and developed countries.
Broadly speaking, although, with different scopes, the reforms carried out in these five countries promoted the generation of quality employment, strengthened labour protections and unions, and centralized collective bargaining. They provided instruments to guarantee labour stability and income during periods of crisis, without weakening collective bargaining or making labour contracting conditions more flexible.
These protective reforms limit, of course, the power of market entrepreneurship, redraw the regulatory capacity of the state and favour unions, but they are far from being “anti-market”. While in all cases the changes are pushed by progressive governments, none of them can be seriously labelled as anti-capitalist. When the new regulations were implemented, the economies continued to function normally and in the Spanish case – the most extensively applied – with substantial improvements in social and performance indicators. Rather, it is a matter of rebalancing the scales to build a more efficient and at the same time inclusive capitalism.
Labour reforms based on negotiation
Labour reform discussions are obviously, and first and foremost, political contests. In the five countries mentioned, business chambers and conservative parties opposed the reforms and were active lobbyists against them. However, when they joined the various forms of interaction between representatives of governments, employers and workers, they played a different role and in many cases, after negotiation, supported the reforms.
At this point, it is necessary to highlight a substantial difference. While the characteristics of neoliberal reforms are defined unilaterally, those of the inclusive type usually require social dialogue institutions to acquire greater legitimacy.
The five initiatives mentioned above made use of social dialogue as a means of legitimizing their proposals. However, Colombia and the United States present serious limitations as a result of a weakened institutional framework. In Colombia, after the collapse of the original reform bill, the modified text avoided debate in the Permanent Commission for the Agreement on Wage and Labor Policies. In the United States, the dialogue took place directly in the parliamentary hearings, during the treatment of the law, an instance that makes interaction between the parties impossible. These two processes are the ones that show the least progress for the initiatives promoted.
Summary of aspects and issues addressed by labour reforms in Spain, Colombia, the United States, Mexico and Chile
| LABOR REFORMS ANALYZED | ||||||
| Spain | Colombia | USA | Mexico | Chile | ||
| ISSUES ADDRESSED | ||||||
| Government initiative | ✓ | ✓ | ✓ | ✓ | ✓ | |
| Coalition government | ✓ | ✓ | ||||
| Social dialogue | ✓ | ✓ | ✓ | ✓ | ✓ | |
| Parliamentary approval | ✓ | ✓ | ✓ | |||
| TOPICS ADDRESSED | ||||||
| Collective bargaining, wages and income | ||||||
| Pension system | ✓ | ✓ | ||||
| Collective bargaining | ✓ | ✓ | ✓ | ✓ | ||
| Minimum wage | ✓ | ✓ | ✓ | ✓ | ✓ | |
| Stability of employment | ||||||
| Stability of employment | ✓ | ✓ | ||||
| Salvage procedures | ✓ | |||||
| Trade union strengthening | ||||||
| Trade union strengthening | ✓ | ✓ | ✓ | ✓ | ||
| Individual rights and new rights | ||||||
| Labor subcontracting | ✓ | ✓ | ✓ | ✓ | ||
| Training contracts | ✓ | ✓ | ||||
| Working hours and breaks | ✓ | ✓ | ✓ | |||
| Labor justice | ✓ | ✓ | ||||
| Platform work | ✓ | ✓ | ✓ | ✓ | ✓ | |
| Self-employment | ✓ | ✓ | ||||
| Gender equality | ✓ | ✓ | ||||
Collective bargaining, wages and income
Considers policies that:
- replace, restore or innovate in the institutions or mechanisms for increasing or updating wages in general and the minimum wage in particular;
- strengthen collective bargaining at the activity or sectoral level over that of the company;
- grant contractual stability to collective bargaining agreements using the ultra-activity rule that keeps the agreement in force until a new one is negotiated;
- modify the social security systems.
→ All the governments of the countries under study (Spain, Mexico, United States, Colombia and Chile) have recently implemented or promoted wage increases above the legal minimums. There are also cases such as that of Spain, where the ultra-activity rule was included in order to extend indefinitely the validity of the last agreement until another one is concluded (which gives greater contractual stability to the agreements). Mexico, for its part, initiated a process that seeks to democratize unions, accompanied by a reopening of collective bargaining at the activity and company levels. In the United States, the PRO Act seeks to limit the intervention of employers to prevent the signing of collective bargaining agreements. Finally, both Spain and Chile included modifications to their pension systems as part of the reform initiatives.
Employment stability
Considers regulations that seek to reverse the high
- seek to reverse the high temporary nature of employment – those contracts for a defined period;
- promote stability by limiting unjustified dismissals;
- establish mechanisms to protect against temporary or sectoral crises.
→ Concerning initiatives to guarantee employment stability, in Spain, permanent contracts were established as the rule and temporary contracts as the exception, while work and service contracts, which gave rise to situations of fraud, were eliminated. In Colombia, the proposal of the current progressive government of Gustavo Petro seeks to strengthen permanent contracts, limit dismissals and increase severance pay. New temporary mechanisms were also formulated to prevent and deal with cyclical or sectoral crises in companies and entire activities to avoid job losses. Spain institutionalized two crisis prevention mechanisms.
Trade union strengthening
Considers policies and regulations that seek to promote union presence in companies, promote union action or strengthen the position of unions in collective bargaining.
→ To achieve union strengthening, in Spain unions were included in the administration of the new preventive crisis procedures. Colombia seeks to protect the right to strike and proposes to limit abusive practices by employers. In Mexico, a reform was carried out to promote union membership and freedom of association. In the United States, policies were designed to promote the presence of unions in companies, protect the right to strike and limit abusive practices or the intervention of employers in the election of union representatives, among other aspects.
Individual rights and new rights
Consider regulations that seek to include especially vulnerable
- seek to include especially vulnerable groups of workers in labour and social protections,
- reduce working hours,
- Formalizing labour conditions of segments of work (and avoiding subcontracting), innovating new labour rights (such as working time sovereignty or parental leave).
- innovating new labour rights (such as working time sovereignty or parental leave).
→ Finally, for initiatives linked to strengthening individual rights or recognizing new labour rights in Spain, Mexico, Colombia and the United States, governments have adopted or proposed regulations to limit productive decentralization or protect subcontracted workers. In Mexico, Chile and Colombia, progress has been made in reducing the working day. In Spain, the United States, Colombia and Chile, special efforts are being made to regulate work on platforms. Among other issues, these include laborization or the adoption of labour and social protections for self-employment (the United States and Spain), apprenticeship contracts (Spain and Colombia) and for athletes, migrants and agricultural workers (Colombia).
