Spain moves to slash working week to 37.5 hours without any loss of salary

Spain's minority leftist government on Tuesday approved a plan to reduce the working week to 37.5 hours in one of the world's fastest-growing developed economies.

But the measure faces an uphill battle in parliament and the misgivings of business leaders who fear it will stifle growth.

The Socialists committed to reduce the working week from 40 hours to 37.5 hours without any loss of salary by the end of 2025 as part of their 2023 coalition deal with the far-left party Sumar.

The reduction, agreed after more than a year of political wrangling, would affect around 12 million workers, notably in retailing, hospitality and agriculture. Public-sector employees and most large companies already have a 37.5-hour work week.

Labour Minister Yolanda Diaz said the plan would "modernise Spain" and boost productivity, an Achilles' heel of an economy that expanded 3.2 percent last year, leaving European peers trailing in its wake.

"It's about being efficient at work" and "gives hope" to workers, the Sumar figurehead told a press conference after a cabinet meeting.

The agreement follows a deal signed last year with Spain's two main unions but without the representatives of business leaders, who had quit the negotiating table after 11 months of talks.

They worry that Spain's labour market is already showing signs of fragility after unemployment crept up in January, and that the reform would harm certain sectors.

The government also faces the daunting task of finding partners to pass the measure in parliament, especially given the reticence of two key pro-business Catalan and Basque separatist parties.