The Spanish government approves a reduction in the working week to 37,5 hours a week due to business concerns about international competitiveness.

The Spanish Government has approved the draft law that establishes the reduction of the maximum working day from 40 to 37,5 hours per week without pay cutsThis measure, which is expected to come into force gradually from 1 January 2025, will affect more than 12 million workers from the private sector. The initiative, strongly promoted by the Ministry of Labor and Social Economy and the majority unions CC.OO. and UGT, is presented as a "historical step"towards a better work-life balance and greater employee well-being. However, it has found the frontal opposition from the CEOE and Cepyme employers' associations, as well as the concerns of small and medium-sized enterprises (SMEs), which fear a negative impact on their productivity and on the international competitiveness of the Spanish economy.

 

A social "milestone" with division in the dialogue

The Second Vice President and Minister of Labor, Yolanda Diaz, has been the main defender of the measure, calling its approval “the measure that most Spaniards desire"and a milestone after more than four decades without changes to the legal working day. In his remarks, Díaz emphasized:

 

 

"Today is a historic day for the 12 million workers who will benefit from reduced hours.". "Working less means living longer. The unprecedented task is to distribute business productivity across Spain as a whole.".

 

 

For his part, the Minister of Economy, Trade and Enterprise, Charles Body, has underlined the Executive's intention to process the law urgently to "shorten steps"and reach a parliamentary agreement that would allow its definitive entry into force before the end of the year. However, the body acknowledged the complexity of the process:

 

 

"We are aware of the complexity of reaching an agreement to approve the text, but we believe we can reach that final point where these rights are achieved and implemented while maintaining that level of ambition.".

 

 

The agreement has the explicit support of the unions, but the Spanish Confederation of Business Organizations (CEOE) withdrew from the negotiating table, warning of the inherent risks for companies, especially those SMEs, which constitute the 99,8% of the business fabric Spanish and who, they argue, have less room to adapt their structures.

 

The debate on international competitiveness

One of the central axes of the discussion lies in the impact that this reduction in hours will have on the productivity and competitiveness of Spanish companies on the global stage. The government and unions argue that the measure could, in fact, improve efficiency and quality of life, following the example of countries such as Germany and Norway, where shorter working hours have not diminished, and have even improved, productivity per hour worked.

However, this view is not unanimous. Experts and organizations such as the Economic and Social Council (ESC) have warned that the economic impact of the measure is "insufficiently substantiated and incomplete”. SMEs, in particular, express their fear of a increase in labor costs already a loss of flexibility, which could undermine their ability to compete with companies from other countries that operate under more lax regulatory frameworks or that have already internalized production processes adapted to different workdays.

 

The voice of businessmen: rejection and warnings

Progress or regression. The main employers' organizations, CEOE and Cepyme, have unanimously expressed their rejection of the proposal, arguing that “Modifying by law issues that are the subject of collective agreements, such as the reduction of working hours, constitutes an interference in the autonomy of collective bargaining.”. They warn that this rule “It weakens the collective bargaining framework and, in practice, forces many companies, especially SMEs and self-employed workers, to undergo a forced reorganization that will put their internal organizational capacity and survival to the limit.".

 

The president of the CEOE, Antonio Garamendi, has been clear in his position:

 

 

"We will defend our positions (the business positions) and inform the political parties of our legitimate opinions.".

 

 

The National Confederation of SMEs (CONPYMES) has described the measure as a “blight"for the business community, warning that the reduction could mean a increase in business costs of up to 6,25%This increase, added to other recent increases, “It endangers the survival of thousands of businesses, many of them family-run, that already operate on very tight margins.A spokesperson for the CEOE employers' association also indicated, according to media reports, that the reduction in working hours "It will affect SMEs the most, potentially jeopardizing their viability and ability to compete internationally.".

Despite the official position of the employers' establishment, a recent study suggests that opinion among businessmen is not monolithic: a 47% of companies would have a positive opinion Regarding the reduction, 31% would remain neutral and 22% would view it negatively. Support appears to be highest among multinationals (55%) and lowest among microenterprises (40%).

 

Anticipated Effects and Future Challenges: A Path Between Opportunities and Challenges

The implementation of the 37,5-hour work week is on the horizon, not without its consequences. significant challenges and potential consequences that will shape the Spanish productive fabric in the coming years. In the short term, one of the most direct impacts for companies will be the increase in labor costsThe obligation to maintain the same wage level while working fewer hours will likely impact profit margins, a pressure that will be felt particularly severely in those sectors with a lower intrinsic capacity to absorb cost increases or generate rapid improvements in hourly productivity.

At the same time, companies will face an unavoidable need for adaptation, both regulatory and organizational. They are expected to have a transitional period, which would extend until the end of 2025, to adapt their collective agreements and, more crucially, to reorganize your internal processes and workflowsThis restructuring will be essential to accommodate the new timetable without compromising operational capacity.

However, the debate also has a potential positive side. There is a well-founded expectation that a shorter working day, if accompanied by intelligent time management, improvements in work organization and a renewed push to motivate staff, could translate into a higher productivity per effective hourThis ideal scenario could also bring a welcome reduction of absenteeism, thus contributing to the overall well-being of employees and business efficiency.

However, the shadow of a possible loss of competitiveness looms as one of the main risks, especially in the international arena. Experts and businessmen warn that without the implementation of Robust complementary measures that promote innovation, continuous training and the search for operational efficiencies, there is a real danger that the reduction in hours will translate, in the medium term, into a lower total productionThis outcome could lead Spain to lose market share to international competitors operating under more flexible frameworks or that have already implemented similar production adjustments with more robust support strategies. The balance between these factors and the business community's ability to adapt will ultimately determine the true scope and success of this reform.