A running company creates jobs

Joaquim Gay de Montellà's picture
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...an out-of-business company doesn’t create any

Catalonia’s labour relations framework needed to become closer to European standards: we understand that the recently approved reform takes us in the right direction. For Catalonia, the context for optimal business activity is a strong, leading, and solvent Europe, and the past few years have shown us that better coordination and greater unity of action is needed. Because we share a market and a currency, we consider it obvious that the distance between the different fiscal and labour treatments in place in the different member states and regions must be shortened. The Spanish Government’s labour reform, already in force, points in that direction: it levels us with European standards. It has to allow for a shift in the harmful dynamics of labour relations in Catalonia and, at the same time, strengthen a united Europe, which is the key for the future of all Europeans.

In the last 30 years, Catalonia and Spain have systematically had twice the unemployment rate than the European average, both during periods of prosperity and during hard times. Unemployment rates beyond 21% are unsustainable in Catalonia and in any other place. At the same time, we have observed that in 2011 more than 1,500 bankruptcies were registered. If we thoroughly think about these figures, we have to acknowledge that some things in our model do not work and that we must change. And I think that this labour reform has to help us have more resistant companies to face contextual changes and, therefore, more resistant jobs.

In Catalonia, over the last number of months, social agents have demonstrated our will to agree and adapt to new realities. The Inter-professional Agreement of Catalonia, reached at the end of 2011 between Foment, UGT and CCOO is particularly important. It is brave and advanced because it clearly prioritises internal flexibility within companies as a tool to better and adapt to the economic context.

Because, believe me, the Catalan business-owner has the will to hire and keep workers, because it would mean the company works, that it is viable, that it has been able to adapt to setbacks, and leave them stronger. We want to positively assess this progress within this aspect of the reform, even it is modest, because we are confident that it will be positive for our labour relations model, because it goes in the right direction to foster hiring and reducing temporary contracts.

Everything that enables a company to avoid shutting business down favours maintaining and increasing jobs. Because a company that ends business becomes a considerable loss of resources, guarantees and expectations for social dynamics. A very expensive contract termination is a barrier that might be insurmountable regarding the company’s survival and for the generation of both current and future employment.

For a business-owner, contract termination –laying off- is the last of the options he or she considers to save the company. This last option cannot be the one that, very often, ends with salvation because it is an excessively expensive alternative. Let’s keep it clear: a company that is saved can, in the future, generate jobs again. A company that ends business will not generate employment ever again.


Joaquim Gay de Montellà

President of Foment del Treball (Catalan Employers Confederation)

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