The economic situation has resulted in austerity in all sectors, but many unscrupulous business owners are taking this as an excuse to break the law. Figures from the Work Inspection department of Malaga show that up until Christmas 2011, more than 2,100 companies were committing irregularities when contracting their workers and this is 28 per cent of the 7,671 companies which were visited by inspectors. In total, a thousand employees were found to be working without a contract. The head of the Work Inspection department, Mercedes Muñoz, says there are so few job opportunities because of high unemployment, that many people accept a job without a contract just to earn some money. In some cases, the business owner connives with the worker so he or she also claims unemployment benefit. "In either case, for the employer there is a double advantage because not only do they save money by not having to pay the worker's Social Security but they are probably paying less than the amount stipulated in the official working agreement" explains Mercedes Muñoz.

After the construction sector, where this hidden economy is most common, the most badly affected sector is that of services. The authorities have been fighting this battle for years because just in Malaga province it costs the State 336 million euros in Social Security payments which should be paid.

In contrast with the years before the crisis, in 2011 only 103 people who were working without a contract were foreigners, which is 10 per cent. "Before, there were a great many immigrants working in the construction sector with no contract because they weren't even living legally in this country so the bosses couldn't register them with Social Security. Now, though, the fraud mainly affects Spanish nationals" explains Mercedes Muñoz, who also says that 70 per cent of the checks carried out by her department are routine while about 30 per cent are as a result of complaints by unions or employees.

Temporary to permanent

Another of the Work Inspection department's battlefields is that of temporary or part time contracts for employees who hold a permanent post in the company. Last year, 2,049 of these workers had to be given permanent contracts. "We have received very few reports of this type because workers are afraid of losing their job, even though they have been working on a temporary contract for years or they have a contract for four hours a day but are really working eight", says Mercedes Muñoz.

The head of the Work Inspection department also warns against fictitious companies which register employees with Social Security but generate no services whatsoever, existing solely to obtain the right to benefits such as unemployment.

Even though the crisis has caused many companies to close, this has not lessened the burden on the Work Inspection department. This is because it also handles the Labour Force Adjustment Plans, (ERE) which have increased considerably.

The Inspection team, which comprises 25 inspectors and 28 sub-inspectors, supervised 325 such adjustment plans in Malaga province last year and 198 of these resulted in the suspension of contracts with the agreement of workers' representatives; 80 with the suspension of contracts without agreement; 22 with redundancies with agreement and 25 redundancies without agreement. Mercedes Muñoz says they have also discovered that many companies have presented an ERE to reduce the number of working days with the argument that their production has dropped, but they actually continue working the same number of days, and action has been taken against them for that reason.