Collective bargaining in Spain

Collective bargaining in Spain is characterised by a multilevel bargaining structure and high coverage rates. The latter is a result of the erga omnes extension of collective agreements to all workers within the functional scope of a collective agreement, irrespective of whether they are trade union members or not. Moreover, collective agreements enjoy legal enforcement, and their implementation can be monitored by labour authorities.

Spain has a high collective bargaining coverage rate. According to the European Company Survey, the rate is close to 90%. This is close to the rate determined from the Structure of Earnings Survey (92%), see table below. Most workers are covered by multi-employer collective agreements concluded at national, regional and provincial levels. According to Spanish statistics on collective bargaining, company-level agreements in 2021 covered around 6% of all employees covered by collective bargaining.

Collective wage bargaining coverage of employees

Notes: * Percentage of employees working in local units where more than 50% of the employees are covered by a collective pay agreement against the total number of employees who participated in the survey.

Sources: Eurofound, European Company Survey 2013/2019 (including private sector companies with establishments with more than 10 employees (Nomenclature of Economic Activities codes B–S), with multiple responses possible); Eurostat [earn_ses10_01], [earn_ses14_01], [earn_ses18_01] (including companies with more than 10 employees (Nomenclature of Economic Activities codes B–S, excluding O), with a single response for each local unit); OECD and AIAS (2021). ** national administrative data

There are no official national figures on collective bargaining coverage. Collective bargaining coverage is usually calculated by dividing the average number of people making social security contributions in a given year by the total number of people whose working conditions are regulated by a collective agreement. Using data for 2020, the most recent year for which definitive figures on collective agreements are available, and statistics on participation in the general regime of the social security scheme (that is, excluding the self-employed and those who are part of special social security regimes, such as domestic workers), we obtain a coverage rate of 75%. However, this estimation presents some methodological problems, mostly related to statistics on collective agreements.

The last source collects information on all collective agreements, so it is a full register. This basic source of information derives from what is known as a ‘statistics sheet’, which is completed by the bargaining commissions once the agreement is signed. This sheet is presented along with all the necessary documentation in order to register the agreement. The source is not updated every year. Moreover, figures on the collective agreements for one year are only considered definitive in the annual publication that provides the data from the collective agreements recorded until 31 May two years later. Thus, figures from 2017 will only be definitive once the figures of all the collective agreements have been recorded by 31 May 2019, the economic effects of which started in 2017.

The structure of collective bargaining has remained rather constant since the end of the 1990s. The collective bargaining structure in most sectors in Spain has a multilevel character, with collective agreements signed at national, sectoral, provincial and company levels. Since 2002 (with the exception of 2009), peak bipartite cross-sectoral agreements have only established guidelines on working time and pay that are not legally binding. However, all key players highlight the important role of these peak agreements as a mechanism to coordinate wage-setting and collective bargaining more generally. With regard to the number of agreements recorded by economic activity, there is a higher prevalence of company-level agreements than other types. The second most numerous are provincial sectoral agreements, followed by national and regional sectoral agreements. In contrast, most workers are covered by provincial sectoral agreements and national sectoral agreements.

In addition, it is worth noting that multi-tier bargaining models are quite common. Therefore, in some sectors the sectoral level establishes the structure of the wage system, and the lower levels establish wage levels.

Levels of collective bargaining, 2022

Note: * Peak bipartite agreements are nowadays recognised as playing an important role in wage-setting.

Source: Authors’ elaboration.

Articulation

The mechanism governing coordination between different levels of collective wage-setting was changed in 2011 and 2012 by two legislative reforms, implemented by the Spanish Socialist Workers’ Party and the People’s Party, respectively. Before 2011, wages agreed at sectoral level prevailed over wages agreed at company level. As such, lower bargaining levels could only improve wage standards agreed at higher levels.

In 2011, the socialist government reformed this mechanism as part of a broader reform of collective bargaining rules (Royal Decree 7/2011 of 10 June), through which it gave priority to company-level agreements over sectoral multi-employer agreements (whether national, regional or provincial) in matters such as basic pay and pay supplements. However, the law allowed social partners to establish – at cross-sectoral or sectoral (regional and national) level – another collective bargaining structure that could continue to prioritise the sectoral level.

In 2012, the People’s Party reformed this mechanism again as part of a deep reform of the Spanish labour market legislation (Law 3/2012). It gave priority to company-level agreements over sectoral multi-employer agreements (whether national, regional or provincial) in matters such as basic pay and pay supplements, even if the social partners decided to establish an alternative collective bargaining structure.

In 2022, a new labour market reform (Law 32/2021) amended the rules on the coordination of collective bargaining levels. Whenever multi-employer agreements are in force, company-level agreements cannot set lower salaries (basic pay rates and supplements) than those agreed at sectoral level. Companies with their own agreement in force prior to the entry into force of the law are requested to adapt their pay tables to those provided in higher-level agreements once the company agreement expires. The law also establishes that the collective agreement applicable to subcontractors should be the existing sector-specific agreement for the ‘main activity’ that is being subcontracted unless the subcontractor has its own collective agreement. However, the prioritisation of company-level bargaining over multi-employer bargaining is preserved in the regulation of other key aspects of working conditions, such as working time and professional classification. Different models of defining the components of wage-setting have been observed over the past decade regardless of the changes in its regulation. Indeed, there has been no discernible trend towards the decentralisation of collective bargaining, as the coverage rate of company-level bargaining has remained at a very low level. Most companies willing to escape from multi-employer bargaining did so using derogation mechanisms enabled by the 2012 labour market reform. Multi-tier models of the coordination of collective bargaining are still prevalent. In some sectors, such as the graphic arts, the sectoral level establishes the structure of the wage system, and the lower levels (regional and provincial sectoral level or company level) establish wage levels. In other sectors, such as the manufacture of gypsum or the chemical sector, the sectoral level exclusively regulates some aspects of wage levels (mostly minimum wages linked to professional categories), allowing the company level to regulate other wage elements (such as extra payments).

In Spain, a general pattern with regard to the month or quarter of the year when collective bargaining takes place is not observed.

Since the early 2000s, peak bipartite intersectoral agreements have provided a general framework for all the collective agreements and, although every sector and/or company has its own particularities and their collective agreements are adapted to those, interprofessional agreements provide common guidelines and a soft form of coordination for all sectors. These agreements establish guidelines on pay, among other aspects, that are not legally binding, but that the social partners commit themselves to following at different levels. The most recent national agreement signed was the V Agreement for Employment and Collective Bargaining 2023, 2024 and 2025 (V Acuerdo para el Empleo y la Negociación Colectiva 2023,2024 y 2025). It includes guidelines on salary issues, negotiating flexibility and conflict resolution.

The most recent bipartite intersectoral agreement signed at national level expired in 2020. Negotiations for its renewal proved difficult, first because of the COVID-19 outbreak and more recently due to conflicting positions on pay issues and on how to tackle increasing inflation levels through an income policy agreement at national level.

In Spain, once collective agreements are signed they are extended to all workers irrespective of whether or not they are affiliated to the unions that sign the agreement. The same applies to companies. This has not changed in recent years.

In Spain, collective agreements can be extended by legislation, according to Article 92(2) of the Workers’ Statute, implemented by Royal Decree 718/2005. Extensions prevent damages to workers and companies resulting from the impossibility of subscribing to collective agreements in the third title of the Workers’ Statute due to the absence of parties authorised to negotiate them. In this case, the responsibility for requesting the extension lies with the social partners, and the institution with the authority to resolve the issue is the Ministry of Labour, Migration and Social Security (in the case of a national-level collective agreement or a collective agreement affecting more than one autonomous community) or the autonomous community. The possibility of extending agreements is a measure set out by the legal framework to be used in certain cases, and cannot be implemented voluntarily by any party.

However, the 2012 labour reform introduced the opportunity for companies to opt out of higher-level collective agreements because of economic, technical or organisational circumstances. Therefore, companies, under some conditions, can decide on the efficacy of collective agreements using derogation mechanisms.

In Spain, the opening clauses allowing derogation from collective wage bargaining were regulated in 1994 (Law 11/1994). According to this regulation, multi-employer collective agreements had to establish the conditions and procedures allowing companies to derogate from collective bargaining.

In 2010, the socialist government allowed the modification of wages stipulated in multi-employer collective agreements by means of negotiations within the company. According to Law 10/2010, companies have to consult the employee representatives and negotiate the changes within a non-extendable period of 15 days. If they do not reach an agreement, they will have to apply for mediation procedures established in the multi-employer collective agreements.

Finally, the latest regulation enacted by the People’s Party government (Law 3/2012) makes it easier for companies to derogate from collective agreements. It allows companies to opt out of collective bargaining if the enterprise records a drop in its revenue or sales during six consecutive months. Moreover, the law enables employers to unilaterally modify wages on technical or organisational grounds.

The 2021 labour market reform did not amended the existing regulation on derogation mechanisms.

The continuation of collective agreements beyond expiry was one of the most important elements reformed by Law 3/2012. This law reformed the ‘ultra-activity’ principle of the agreements, which guaranteed the continuation of a collective agreement after its expiry date. Its aim was to protect employees’ working conditions even if an employer refused to sign a new agreement. However, Law 3/2012 stated that the ultra-activity principle has allowed working conditions to become static and rigid, and therefore reformed this principle by establishing that a collective agreement would cease to be in force one year after its completion. More specifically, it stated that from 7 July 2013 all expired and unrenewed collective agreements made before 7 July 2012 would become invalid.

Nevertheless, a recent Supreme Court (Supreme Court Judgment of 22 December 2014, rec. 264/2014) decision annulled the reform of the ultra-activity principle. The Supreme Court ratified the decision of the courts of the Balearic Islands on the ATESE case, in which the trade unions brought the company to court because of its decision to decrease wages once the collective agreement ceased to be in force (one year after its completion). The Supreme Court argued that working conditions agreed in a collective agreement have a contractual judicial status and therefore ruled that they must be applied even if the agreement has expired.

With this decision, the Supreme Court reoriented, in part, the legislation in force regarding the previous labour relations regulation, preventing the 2012 reform from undoing all the effects. However, this decision highlights two important issues. Firstly, it leaves open the possibility of modifying working conditions using the procedure in Article 41 of the Workers’ Statute, about substantial changes in working conditions (for economical, technical, organisational or productive reasons). Secondly, this decision is not applicable to workers that are new members of a union to which the agreement applies, because the expired collective agreement has never applied to them. Because of this, other conditions could be applied to these workers, although new judicial problems could arise (a double pay scale and its prohibition according to the jurisprudence) (Argüelles, 2019).

The labour market reform implemented through Law 32/2021 reinstated the ultra-activity principle by establishing the full extended validity of collective agreements. Once collective agreements have expired, and without agreement for their renewal, collective agreements continue to be applicable unless otherwise agreed by the signatory parties.

Broadly speaking, collective agreements have an ‘implicit’ labour peace obligation. ‘Explicit’ peace clauses are not compulsory in Spanish collective agreements, but they can be included. According to Article 82(2) of the Workers’ Statute, collective agreements can regulate labour peace through agreed obligations. If negotiators decide to make use of this possibility, then peace clauses appear. In general terms, collective agreements in Spain can include two main types of clauses: normative clauses and compulsory clauses. Normative clauses refer to the basic contents of the agreement (that is, salary regime, working time, professional classification, etc.), whereas compulsory clauses regulate particular obligations. Thus, peace clauses are compulsory clauses. Peace clauses imply (for the signatory parties) a temporary commitment to not making use of the right to strike while the agreement is valid.

Generally speaking, collective agreements in Spain are poor in terms of the issues included. This is because of the comprehensive regulation of working conditions in the Workers’ Statute, which reduces the space for collective bargaining. In most cases, the main issues discussed in collective bargaining are wages and working time. The Great Recession impeded the inclusion of working life issues in collective bargaining. As in previous crises, trade unions tended to accept wage moderation and a reduction in workers’ rights in exchange for employment maintenance. Even though a trend towards increasing the number of issues discussed (including clauses related to training, working time flexibility, telework) can be observed, the situation is still characterised by the limited number of working life aspects addressed.