Report on labor reforms: New Employment Law

8 minutos

A New Employment Law Act has been recently published, Act 3/2023 dated 28 February, aimed primarily at reducing structural unemployment, especially youth unemployment, emphasising the necessary training of workers in accordance with the needs of the market, now undergoing a profound change.

Traditionally, Spain has a high unemployment rate (13.26% according to National Statistics Institute (INE) data for the first quarter of 2023) in relation to the rest of the countries around us, meaning that employment regulations are always looking for ways to reduce this percentage. Specifically, Act 3/2023 sets a target of a 50% reduction. However, any initiative to modify the public employment services inevitably runs up against the high number of unemployed who have to be atten-ded to by a small number of professionals, which makes it difficult to achieve its goals.

A further goal of the Preamble of the Employment Act is the reduction of the gender gap. The figures show that the unemployment rate is higher for women (15.13%) than for men (11.57%), and although they have been treated as a particularly protected group in all previous legislation, little progress has been made.

Youth unemployment is alarmingly high at around 30% for those under 25. It is not surprising that another of the regulation’s goals is to provide this group with spe-cific attention. In any case, it should be noted that the drastic reduction of birth rates, already a few decades ago, will probably solve the problem by itself, focusing on the over-50s working age group in a few years’ time.

Against this background, the new Employment Act focu-ses on increasing employability, improving mediation as a cross-cutting goal, determining a service catalogue, and measuring and assessing active employment policies.

The employment policy

The employment policy is divided into three chapters. The first one contains general provisions aimed at specifying the purpose of the Law (as seen in the summary), defining employment policy and other basic concepts, its objectives, and guiding principles.

Chapter II is dedicated to defining the National Employment System (comprised of the Spanish Employment Agency and the public employment services of the Autonomous Communities), its functions, and its Governance bodies, which are:

  1. a) The Sectorial Conference on Employment and Labor Affairs
  2. b) The General Council of the National Employment System

Chapter III seeks convergence among the employment policies of different administrations with competencies in the field to achieve common objectives. It uses instruments for planning and coordinating employment policy such as the Spanish Active Employment Support Strategy, which will have a four-year validity, the Annual Plan, and the Integrated Public Information System of Employment Services.

Active Employment Policies

The extensive third title consists of 5 chapters:

Chapter I

Chapter I gathers general provisions. It defines active employment policies as the set of services and programs for guidance, intermediation, employment, on-the-job training, and advice for self-employment and entrepreneurship aimed at promoting job creation and improving the possibilities of accessing decent employment, either as employees or self-employed, for individuals seeking employment services. The focus is on maintaining and enhancing their employability and promoting entrepreneurial spirit and social economy.

Chapter II

Chapter II is dedicated to employability, defined as the set of transferable skills and qualifications that strengthen individuals’ ability to seize opportunities for education and training with a view to finding and retaining decent work, advancing professionally, and adapting to the evolution of technology and labor market conditions. This law identifies improved oral and written communication skills, as well as practical use of digital and technological tools, as basic competencies for employability.

Chapter III

Chapter III addresses intermediation. Three categories of actions fall under it: prospecting and attracting job offers, connecting job offers with individuals seeking placement or relocation, and selecting individuals deemed suitable for a job.

For the National Employment System, job market intermediation will be carried out exclusively through:

  1. a) Public employment services
  2. b) Placement agencies, whether actual placement agencies or agencies specialized in relocation or personnel selection
  3. c) Other services determined by regulations for or with workers abroad

Placement agencies can also be private and for-profit. With the responsible declaration they submit, the placement agency’s actions will be valid throughout the territory of the State and without a time limit.

Chapter IV

Chapter IV focuses on coordinating active policies and protection against unemployment. Those who apply for or receive unemployment benefits or subsidies or benefits due to the cessation of activity must become job service seekers, being holders of guaranteed services and activity agreements outlined in this law. Likewise, those who receive other income aimed at economic protection against unemployment will be users of public employment services.

Chapter V

Chapter V defines priority target groups for employment policy. Among the many included groups are young individuals with low qualifications, those over 45 years old, and people with disabilities.

For further information, download the “Employment Law Report: New Employment Law”.


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