Negotiations on collective bargaining agreement get under way

In December 2006, the social partners began discussions aimed at renewing the Collective Bargaining Agreement for 2007. Supporters of the agreement believe that it maintains social stability and ensures moderation in wage growth. Conversely, its detractors believe that it is an artificial pact, which has little bearing on reality and which puts productivity growth and company profit before workers’ salaries. This year, among their aims, the trade unions hope to introduce a sectoral minimum wage. However, employers fear that high wage increases could act as a barrier to vulnerable groups seeking to enter the labour market.

The discussions aimed at renewing the Agreement for Collective Bargaining (Acuerdo para la Negociación Colectiva, ANC) commenced in December 2006 with a meeting between the social partners. The ANC is an annual agreement that serves as a reference for negotiation of all collective agreements (ES0503204F, ES0602101N). Representing the employer side were the Spanish Confederation of Employers’ Organisations (Confederación Española de Organizaciones Empresariales, CEOE) and the Spanish Confederation of Small and Medium-sized Enterprises (Confederación Española de la Pequeña y Mediana Empresa, CEPYME). Equally, the Trade Union Confederation of Workers’ Commissions (Confederación Sindical de Comisiones Obreras, CC.OO) and the General Workers’ Confederation (Unión General de Trabajadores, UGT) attended the meeting on behalf of workers.

Main objectives of the ANC

The first ANC concluded in 2002 aimed to implement a reform of the mechanisms of social dialogue which had been announced by the government (ES0201207F). Since then, the pact has become – according to the parties involved – an efficient tool for maintaining an environment of social stability. Its supporters argue that the social unrest stemming from collective agreements has been reduced to a minimum and that moderation in wage growth has become the main instrument for anti-inflationary policies.

Moreover, those in favour of the ANC claim that the purchasing power of salaries is guaranteed due to retroactive wage revision clauses. Experts from the Organisation for Economic Cooperation and Development (OECD), Banco de España and employers have accepted these clauses as the sole method for the negotiation of salaries based on the inflation rate, estimated at 2% by the European Central Bank (ECB). This salary revision has benefited about 80% of workers. The trade unions expect that an increased number of companies and workers will benefit from these clauses in the 2007 ANC.

The government and trade unions forecast steady economic growth in 2007, sustained by a greater surge in the manufacturing sector compared with the construction industry. Indeed, the latter sector is likely to experience redundancies, mainly among the immigrant labour force. This labour force transfer will encourage labour cost reductions. In addition to the expected 3.3% increase in salaries, the government anticipates a slight rise in productivity as well as a certain deceleration in employment growth.

Trade union demands

The trade unions’ objectives for the ANC are similar to those of previous years in estimating about 5,300 ensuing agreements and a collective bargaining round that will affect around nine million workers. They seek a range of measures, namely to:

• improve the structure and organisation of collective bargaining, extending the coverage and guaranteeing the application of what has been agreed;

• guarantee equal treatment and opportunity rights, for instance by avoiding the application of classification systems that discriminate against specific groups;

• extend the practice of enquiry, information, bargaining, coordination and representation rights;

• improve working conditions;

• strengthen stable employment through mechanisms already planned, such as giving bonuses to encourage permanent employment contracts, as promoted by the latest labour reform (ES0605019I);

• eliminate low wages and improve purchasing power by introducing a sectoral minimum wage;

• improve qualification systems, which will result in fair remuneration;

• reduce the accident rate among workers by providing better information and increasing resources and reports on labour risks.

Controversial points

The proposed increase in low wages and the creation of a sectoral minimum wage will be the most controversial aspects between the government, the employers and the trade unions. UGT in the Catalonia region in the northeast of Spain suggests that no collective agreement should allow salaries below €1,000 per month, while CC.OO calls for a 5.5% increase in the lowest wages.

The Interprofessional Minimum Wage (Salario Minimo Interprofesional, SMI) increase – set at 5.5% by the government, which will amount to €567.90 – is another reason for the dispute between Banco de España and employers, on the one hand, and the trade unions, on the other. The employers argue that a substantial wage increase will act as a barrier for unskilled and inexperienced young people who wish to enter the labour market, while the unions believe that minimum salaries should be close to the average pension, which stands at €632 per month.

Furthermore, detractors of the ANC have emerged from within the trade unions themselves. The so-called ‘critical section’ in CC.OO has condemned the pact for seeking a low competitive entrepreneurial model based on low labour costs, even though companies’ profits are constantly growing – according to other sources, at a 40% rate during the first quarter of 2006.

Others add that the forecasts used as a reference for wage increases have been less than realistic in the last few years, so the purchasing power of real salaries has in fact decreased. Moreover, wage revision clauses have exceptions in many agreements, and the benefit is only partial in some cases or not applied at all. Indeed, for some time now, trade unions such as the General Labour Confederation (Confederación General del Trabajo, CGT) have criticised the consolidation of a permanent social pact that is artificial, that does not reflect current conflicts, and that subordinates all salary increases to productivity growth.

Mari Luz Castellanos Ortega, CIREM Foundation