Employment Protection and Collective Bargaining Reforms after Austerity

This chapter compares how Portugal and Spain reregulated employment protection and collective bargaining after austerity, explaining why two similar systems produced divergent settlements. It situates reform within longer trajectories of liberalisation, then traces two emblematic episodes: Portugal's 2019 labourcode package and Spain's 2021 reform. The analysis integrates processtracing with attention to governing coalitions, policymaking arenas, and the role of the European Union. It shows that, in Portugal, a centrist alignment relying on social concertation tightened rules for nonstandard contracts while largely preserving the deregulatory core affecting openended employment and the architecture of collective bargaining. By contrast, Spain's cohesive left coalition used social dialogue and narrow parliamentary majorities to restore the continued validity of expired agreements, reestablish sectoral primacy, and sharply curb temporary hiring. The chapter argues that these outcomes turn principally on the composition of the governing bloc and the choice of arena, with European Union pressures alternating between constraint and support. The chapter provides a comparative explanation of when inclusive reregulation is feasible and why, in Portugal, solidaristic ambitions were diluted while Spain advanced a broader re-regulation of labour market institutions.