If last week the failure of the wage pact negotiations between unions and employers was consummated, today the CEOE has set its recommendations to companies. The essential point is to reject linking the increase in wages to inflation and instead proposes that they be related to other concepts such as productivity or employment. It is the recommendation approved this morning by the executive committee of the CEOE which, as La Vanguardia advanced yesterday, calls for salary moderation and to leave each company and each sector free to act according to their specific situation.
Specifically, the employer argues that inflation should not be used because it is a “volatile concept… which also feeds back the growth of prices.” In addition, it is added that if this relationship with the CPI ends up being established, it should be done by establishing limits or ceilings and warnings against salary updates with retroactive effects due to the impossibility of passing them on to the cost of the product.
Among the concepts to which the CEOE proposes to link wage increases are productivity, employment, GDP, competitiveness or company results.
This step ultimately involves the castling of the bosses at first, which has led to the failure of the negotiations. The wage review clauses that are, at the moment, the main demand of the unions are not accepted. It is the point that has shipwrecked the contacts and has prevented the renewal of the Agreement for Employment and Collective Bargaining (AENC), which supposes giving a frame of reference for the negotiation of the agreements. Now, the forecast is a more uncertain and more conflictive negotiation, given that the unions have already warned that the mobilizations would increase and that the agreements would be stressed.
The CEOE’s approach is that if there is no salary moderation there will be an increase in labor costs that can become a barrier to entry into the labor market for the unemployed, that there will be less room to introduce variable remuneration criteria and that it will encourage the inflationary spiral.
On the other hand, the employers do not forget to remind their members that, in an adverse situation such as the current one, they have the possibility of using the pick-up clause, that is, the option of not applying the working conditions agreed in the agreements when there are economic, technical or organizational reasons, after carrying out a consultation period.
In this way, and as feared, inflation has become an insurmountable obstacle to achieving this salary agreement, which would have provided a reference for the negotiation of the agreements and would have ensured a much calmer negotiation scenario. The employers do not rule out that, when inflation drops to more ordinary levels, negotiations can be resumed, but this is not expected to happen until next year.
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