Draft labour reforms proposed by the Spanish government would allow companies to offer only 20 days’ severance pay per year worked to departing employees, provided the firms can prove they have financial difficulties, Spanish newspapers claim.

State radio RNE said the reform would expand the use of a permanent contract at healthy companies that offers 33 days’ severance pay per year worked versus the typical 45 now, one of the highest in the developed world.

El Pais newspaper also said that the government planned to extend the use of a minimum 20 day severance payment when a company is in financial trouble.

The government, unions and business leaders have been trying to agree on a consensus reform programme for at least a year. Prime Minister Jose Luis Rodriguez Zapatero said that a final plan would be go to the cabinet with or without a deal with unions and employers.

In a separate interview with El Pais, Candido Mendez, the leader of Spain’s second largest union UGT, said the government’s announcement that it wants to calm financial markets was not helping labour reform talks.

“The business leaders don’t have much motivation for reaching an agreement,” Mendez said, and reiterated threats of a general strike if the final labour reform package weakens workers’ rights.