Labor reforms were supposed to increase efficiencies in the labor market, but some loose ends still remain. They need to be tied up quickly in order to substantially improve the labor reform's ability to create jobs.
One loose end, which the IMF has called attention to, is the unfairness between full-time and temporary contracts. Full-time workers receive excessive protection in the form of generous severance, full healthcare and high job security, whereas temporary workers receive few to none of these benefits.
Such harsh contracts cause business owners, in times of crisis, to make adjustments by cutting jobs instead of cutting salaries and work hours.
That and the fact that many workers are still on payroll from boom years (layoffs are almost non-existent in Spain, where termination costs are some of the highest in Europe) are defects that labor reforms need to fix quickly. To fly fast you have to shed what weighs you down.
