After deal with unions, Spain inches closer to shorter work week

By David Latona

MADRID (Reuters) - Spain's minority government and the two largest trade unions agreed on Friday to implement a shorter work week with the same pay, although the change still needs to be approved by a fragmented parliament while it faces opposition from employers.

Labour Minister Yolanda Diaz and the leaders of unions UGT and CCOO stressed the "historic" nature of the measure reducing the maximum number of work hours per week to 37.5 from the current 40, with unchanged salaries, before the end of 2025.

"Today, we're settling a debt with the working people of Spain ... with the new generations who understand that personal time is not a luxury, but a fundamental right," said Diaz, who is also deputy prime minister and leads the leftist Sumar party.

The planned change would affect some 12 million workers, especially those with precarious jobs, as well as reduce carbon emissions, she said.

The new weekly limit will be calculated on an annual average, with any additional hours worked considered overtime. The enforcement of working time recording obligations will be toughened and fines raised to 10,000 euros ($10,382) per worker for non-compliant companies.

One of the cornerstones of the ruling coalition deal between the Socialists and Sumar, the working week reduction has been opposed by the main employers' association CEOE, which argues it should not be imposed by law but through collective bargaining with each company to adapt to specific productivity needs.

"The real deal is to actually think about the economy, not how to make headlines," CEOE head Antonio Garamendi said on Thursday, underlining businesses' worries about costs of the measure.

He also praised Economy Minister Carlos Cuerpo, a Socialist, who has signalled the measure's full implementation could be delayed until 2026 to give small businesses greater flexibility and secure parliamentary support for its passage.

It remains uncertain whether the change can clear the lower house, as the minority government depends on an array of smaller parties such as Catalonia's separatist party Junts, which may be hard to convince due to its business-friendly stance.

($1 = 0.9632 euros)

(Reporting by David Latona; Additional reporting by Corina Pons and Inti Landauro; Editing by Andrei Khalip and Alex Richardson)