First sectoral agreement signed on the 35-hour week

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June 2000 saw the conclusion of Spain's first sectoral collective agreement providing for a 35-hour working week, applying to car-repair workshops in the Asturias region. In return for the working time reductions, seniority-based pay supplements will be abolished for new recruits and limited for existing workers.

On 14 June 2000, the metalworking federation of the General Workers' Confederation (Unión General de Trabajadores, UGT) and two Asturian sectoral employers' associations - the Asturias Association of Automobile Employers (Asociación Asturiana de Empresarios del Automvil, ASAUTO) and the Association of Automobile Employers of the Principality of Asturias (Asociación de Empresarios del Automóvil del Principado de Asturias, ASPA) - signed a new regional collective agreement for car-repair workshops in Asturias. This is Spain's first sectoral agreement to introduce a 35-hour working week. The metalworking federation of the Trade Union Confederation of Workers' Commissions (Comisiones Obreras, CC.OO), which has a minority representation in the sector, did not sign the agreement.

Initial positions

The process of negotiating the new Asturias car-repair agreement was long and complex. During the period of validity of the previous agreement, a "permanent concertation commission" was created by the trade unions and the employers' associations to deal with three basic topics: employment, working hours and seniority. The objective of this commission was to deal with the key aspects to be negotiated in the forthcoming agreement.

UGT and CC.OO were determined to deal with the problem of employment stability and shorter working hours at the bargaining table. The Asturias car-repair sector involves around 800 companies and 4,000 workers. It is a highly atomised sector characterised mainly by small workshops with three or four employees and high levels of temporary employment. The trade unions intended to introduce measures in favour of job creation and employment stability through a substantial reduction in working hours and clauses to convert temporary contracts into permanent ones.

The sectoral employers' associations demanded a substantial reduction in the costs arising from employee seniority, which they considered to be far higher than in other sectors. According to the agreement prevailing at that time, each five years of service involved a 5% increase in the basic wage. The employers' organisations considered that this supplement was far higher than in other sectors due to the different wage structure, although the percentage in itself was similar to that of other agreements. In the car-repair workshop sector there are practically no wage bonuses - the basic wage is comparatively high, and consequently so is the seniority supplement.

Main provisions

The June 2000 agreement required a long period of bargaining that was not trouble-free. The final agreement involved the introduction of the 35-hour week over four years in exchange for the elimination of the seniority supplement for new recruits and its limitation for present workers. The main points of the agreement are the following:

• working hours. The agreement covers a period of four years (2000-year). The3). Over this period, the working week will be reduced progressively from the current 38.5 hours to 35 hours in 2003 (equivalent to 1,582 hours per year). The reduction in working time cannot be broken down by minutes or hours - time off to compensate for surplus working hours over this level must be taken in complete working days;

• seniority. The seniority supplement is eliminated for newly recruited workers and is limited for current workers, who will only be able to qualify for one more five-year period of seniority than they currently have. As before, the supplement for each five-year period will be 5% of the basic wage. Also, to compensate for the future loss of purchasing power due to the limitation of the number of five-year periods counted, during the period of validity of the current agreement an increase of 1.5% of the value of the seniority supplement will be distributed annually on a sliding scale (the fewer five-year periods, the greater the increase). As of 2003, the payments that correspond to each existing five-year period will increase by the same percentage as that agreed for general pay increases in each collective agreement;

• wage increases. Pay will rise by 3.5% in 2000. For the rest of the years covered by the agreement, the pay increase will be the increase in the real retail prices index (RPI) plus 0.5%. These increases are subject to wage revision clauses to guarantee an increase in purchasing power if real inflation is greater than expected; and

• employment. No general clause on converting temporary jobs into permanent jobs was agreed. The agreement establishes only that workers on temporary contracts have priority for permanent jobs. To meet the demand for personnel in the sector, there will be a "labour pool" of temporary employees and unemployed workers trained at the centres run by UGT and ASPA.

Differing assessments

The agreement has been assessed positively by the organisations that signed it, which consider that it establishes a satisfactory balance between the interests of each party.

The ASAUTO and ASPA employers' associations are satisfied to have obtained one of their long-term demands in the sector: the limitation of the seniority supplement. These organisations have been severely criticised for accepting the 35-hour week by the Asturian Federation of Employers (Federación Asturiana de Empresarios), which fears that the car-repair agreement will put pressure on bargaining in other sectors. However, the car-repair employers' associations consider that the 35-hour week is a reasonable compensation for changes being introduced in the sector and need not influence bargaining in other sectors.

The UGT metalworking federation, which has 70% support among workers in the sector, considers that the agreement on seniority is fair, since it allows current workers to gain a new five-year period and establishes partial compensation for the future loss of purchasing power. In its opinion, the agreement on the 35-hour week is symbolic and may serve as a reference for bargaining in other sectors: it points out in particular that shorter working hours will be compensated through complete working days, which means better working conditions and a greater impact on employment.

The CC.OO metalworking federation, however, with 30% support in the sector, finally rejected the agreement after actively participating in the negotiations. There are several reasons for this: CC.OO considers that the agreement on seniority is too favourable to the companies and will involve a great loss of purchasing power for workers; it criticises the absence of commitments on employment stability; and finally it believes that the period over which the 35-hour week will be introduced is too long.

Commentary

The limitation or freezing of the seniority supplement is a demand by employers that has gained force in recent years. Several sectoral collective agreements have gone in this direction: most of them respect acquired rights and establish some compensation, for example setting aside a percentage of the paybill for regrading and promotions. The basic aim is to replace an automatic wage-increase mechanism (based on the number of years of service) with systems based on professional recognition and promotion.

The agreement for Asturian car-repair workshops adopts a different "formula of exchange" that represents a novelty in collective bargaining: shorter working hours in exchange for limiting the seniority supplement. This agreement has broken the "taboo" of the 35-hour week, showing that is possible to deal with shorter working hours in collective bargaining without ideological prejudice. It will be interesting to see to what extent the workers support this measure and to analyse its impact on job creation.

In any event, it is evident that the success of this formula will depend on the shorter working hours being effective and being applied according to the agreement, which is not easy to guarantee in a very atomised sector with high levels of temporary employment: the absence of commitments in favour of employment stability is a negative feature of the agreement (María Caprile, CIREM Foundation).