Rock en Espana

Strict European labour laws designed to protect employees has produced an unexpected offer to the employees of one Spanish Bank. Even in bizarre financial times this is an opportunity to seriously consider.

Spanish bank BBVA is offering to pay long-term employees almost a third of their salary to go away for up to five years. This is one of a number of options offered to its near 30,000 workforce in an attempt to contain costs. BBVA is also offering the opportunity of a shorter working week on reduced pay or extra unpaid time off for staff. For those who take a break, the bank is undertaking to preserve the post for the employee's return.

Laying off permanent staff in Spain is expensive -- employees are entitled to up to 45 days salary for every year they have worked for a company -- and many of BBVA's employees have been there long enough to qualify for up to three years pay if they were made redundant. The BBVA approach not only saves the bank money but keeps people out of Spain's increasingly long queues of jobless.

Unemployment reached 4 million in the first quarter, with the unemployment rate hitting 18.1 percent in April and a rate of well above 20 percent is widely predicted.

What the offer also shows is that even those Spanish banks which have so far escaped the worst of the economic downturn such as BBVA and larger rival Santander are vulnerable and need to cut costs to rebuild their balance sheets.

Gareth

Reported by Reuters