Agreements on good employment practices in Spanish companies

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A number of agreements on "good employment practices" signed in Spanish companies indicate a new direction in the 1998/9 collective bargaining round. The main features of these agreements are job creation and secure employment in exchange for wage moderation and flexibility, in order to allow companies to adapt better to their markets.

The reform of labour legislation in 1994 was a turning point for collective bargaining in Spain. Central government reduced the degree of its intervention in industrial relations and delegated a wide range of issues relating to employment and working conditions to collective and even individual bargaining. These issues included the specification of tasks for which workers could be recruited on service contracts, the duration of work/study contracts, the payment or other compensation for overtime and the definition of occupational grades. The same reform granted new opportunities to negotiate company pacts, which had previously been neglected by the legislation. As a result of this, since 1995 there has been a certain increase in bargaining on employment in Spain at company (ES9809280F), workplace and sector level, focusing mainly on types of temporary recruitment and the minimum duration of contracts. This has been interpreted as a legitimisation of flexibility through collective bargaining.

However, it was not until after the "intersectoral agreement on employment security", signed in April 1997 by the CEOE-CEPYME employers' organisation and the CC.OO and UGT trade union confederations (ES9706211F), that agreements on employment have become more widespread and relevant. There has been an increase in specific agreements on employment and in its inclusion generally in collective bargaining. Employment issues are increasingly approached with greater depth and complexity. Bargaining in 1998/9 has seen a number of agreements on "good employment practices" (acuerdos de buenas prácticas).

Agreements on good employment practices

It should be stated at the outset that little information is available on this subject. This is because only some of the agreements on "good employment practices" are laid down in collective agreements, for which the legislation determines procedures of registration and publication. Others are expressed in pacts at company or even workplace level for which there are no formal procedures. In other words, agreements may be (and often are) reached in companies or workplaces and only those who have participated in the negotiations and the workers directly involved are aware of them. Even the trade unions and employers' associations tend to have very limited information about these pacts.

An important characteristic of this type of agreement is its informal nature. An agreement on employment may be concluded through a collective agreement at company or sector level, in which case they are covered by certain legal requirements and guarantees. But for pacts reached in companies or workplaces, the legal position is less well defined. An intermediate situation arises when, in order to avoid the possible legal risks of a company pact, the signatories decide to formalise it by presenting it as a fictitious dispute to a mediating organisation, such as the Labour Court of Catalonia (Tribunal Laboral de Cataluña). In these cases, the agreement receives the recognition of the mediating organisation.

An analysis - as yet unpublished - has been carried out of 30 pacts containing clauses on employment that were identified in the framework of the "task force programme" of the regional employment pact for the Vallès Occidental. These pacts, most of which were in the same region, had been qualified as constituting "good practice" due to the way in which they approach employment. The information is not exhaustive for the reasons stated above, but it may be seen as indicative of new directions in collective bargaining. The main aspects dealt with in these agreements indicate that job creation and secure employment are being offered in exchange for wage moderation and flexibility, thus allowing companies to adapt better to their various markets.

On the subject of employment, some pacts contained quantified commitments to job creation. However, more commonly the pacts included the conversion of temporary contracts into permanent ones, accompanied in many cases by limitations on temporary recruitment or on the use of temporary employment agencies. In this latter case, the pacts might specify the kind of tasks temporary workers could be hired for, or lay down the maximum percentage of the workforce that they could constitute. Job creation, secure employment and guarantees of stability are thus three basic recurring features of this type of agreement. In some cases, the objective of job creation is reinforced by the prohibition or limitation of overtime.

The main compensation for job creation or increased security is flexibility. This takes on various forms, the most common being the introduction of flexible working hours. This is dealt with by creating a system that establishes a schedule of annual working time, but with the possibility of irregular distribution throughout the year. This allows companies to lengthen the working day and/or introduce work on a certain number of Saturdays or public holidays during the year in certain cases. By way of compensation, a pool of hours is created, which each worker can use under the conditions established in each agreement.

It should also be mentioned that in a few cases specific mechanisms for reducing the workforce are agreed if the turnover or activity of the company decreases significantly. All these agreements establish guarantees for both sides on how redundancies are to be approached.

The pay structure is an important component of this group of pacts. Changes in the system of occupational grading or seniority affect the pay system. Also, the introduction of lower wages - in some cases considerably lower - for newly recruited staff is a mechanism aimed at reducing costs that affects the pay structure, and is accepted in exchange for job creation (or in some cases job conservation).

Very few pacts make specific commitments on training, though many make a declaration of principles recognising its strategic value for the company or the workers. Specific clauses to ensure equal opportunities appear in only two of the agreements analysed.

Finally, many of the agreements introduce mechanisms establishing joint procedures for participation in the monitoring of agreed aspects of employment.

Commentary

The introduction of the subject of employment - and particularly improving employment levels - is very enriching for collective bargaining. This is a result of the important agreements on employment reached by the social partners in April 1997, which marked a milestone in collective bargaining and in the treatment of employment. However, these "employment pacts" have not yet become widespread, and their impact is fairly limited.

Several aspects stand out from the pacts analysed. The first is that only one establishes shorter working hours (and this makes use of the subsidies provided by the Catalonia employment plan - ES9805154F). Therefore, for the moment, shorter working hours are not being offered in exchange for flexibility. On the contrary, flexibility is accepted in exchange for more secure employment and even job creation in some cases. A second aspect is the nature of these agreements, with only a few of them "defensive" in nature (that is, the result of the company's intention to reduce the workforce). In fact, employment security and even job creation are dominant characteristics in practically all of them. This must be seen within the present context of economic growth that is more favourable to this kind of measure. In other words, economic expansion favours agreements to improve employment. (Ramón de Alòs, UAB)

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