One million workers to lose collective agreement protection
Spain’s trade unions estimate that around one million workers may soon lose the protection of collective agreements. Legislation in 2012 removed a labour law provision that guaranteed the indefinite validity of a collective agreement, even after its official expiry date, if an employer refused to sign a new agreement. The maximum period for which an agreement can remain in force has now been fixed at 12 months after expiry. Many have not been renewed and are due to expire.
The ‘ultra-activity’ principle
The ‘ultra-activity’ principle of Spanish labour law guaranteed the continuation of a collective agreement, even after its expiry date. Its aim was to protect current working conditions even if an employer refused to sign a new agreement.
The principle had been criticised, particularly by the EC’s Council Recommendation of 12 July 2011 (2011/C 212/01) on Spain’s National Reform Programme 2011, which also delivered a Council opinion on Spain’s updated Stability Programme 2011–2014. The communication argued that the automatic extension of collective agreements prevented the wage flexibility needed to speed up economic adjustment and restore competitiveness.
Legislation enacted by the Spanish Parliament on 11 February 2012 accepted these arguments. The Royal Decree 3/2012 of 10 February 2012, later transformed into Law 3/2012 of 6 July, states that the ultra-activity principle has allowed working conditions to become static and rigid. Law 3/2012 of 6 July set the maximum period of validity for a collective agreement at one year after its official expiry date.
The legislation allows the social partners to choose to include an ‘ultra-activity clause’ in a collective agreement. Nonetheless, the law specifies that once a collective agreement has expired, workers will be covered by a higher collective agreement if it exists. It is therefore not completely clear, from a juridical perspective, what will happen to workers when their collective agreement expires.
The new law states that from 7 July 2013, all expired and unrenewed collective agreements made before 7 July 2012 will become invalid.
Social partners’ reaction
With the termination of the ultra-activity principle, it is likely that many collective agreements will soon cease to have legal force. Unions warned in May 2013 that after July 2013, around 1.8 million workers may no longer have the protection of collective agreements if existing agreements were not renewed.
On 23 May 2013, the social partners on both sides – the General Workers Confederation (UGT), the Trade Union Confederation of Workers’ Commissions (CCOO), the Spanish Confederation of Employers’ Organisations (CEOE) and the Spanish Confederation of Small and Medium-Sized Enterprises (CEPYME) – signed an agreement on the ultra activity of collective agreements (in Spanish, 156KB PDF) . It states that the social partners at national level will encourage affiliates covered by a collective agreement to observe the following guidelines, designed to encourage renewal of previous agreements. They will be urged to:
- renew and update all collective agreements to improve companies’ competitiveness and employees’ security, while respecting the autonomy of the bargaining parties;
- allow companies to adjust factors such as working time, wages, and professional classification to their specific circumstances, to avoid job losses;
- promote the renewal of innovative collective agreements, to guarantee greater efficacy;
- clarify and simplify the clauses of agreements, improving understanding between workers and employers and avoiding conflict over interpretation;
- speed up all negotiations that were on course to deliver renewed agreements before July 2013;
- agree to observe expired collective agreements while renewal negotiations are being concluded;
- call for extra juridical mechanisms, such as mediation or voluntary arbitration, where negotiations over collective agreements that expired after 7 July 2013 are deadlocked;
- commit themselves to do everything necessary to foster the renewal of collective agreements.
The UGT has published a report, The situation of collective bargaining up to June 2013 (in Spanish, 581 KB PDF), which estimates that 1,236 collective agreements affecting 1,365,024 employees are about to expire. It reports that 125 collective agreements were renewed in June 2013.
CCOO’s figures in a press release (in Spanish) about the negotiation process suggest that between 22 June and 7 July, 50 collective agreements affecting 400,000 employees were renewed.
The estimates of employer organisations CEOE and CEPYME are set out in a press release (in Spanish) on CEOE’s website and are lower than the union figures. According to the employers’ organisations, 968 collective agreements affecting 726,750 employees were close to expiry in July 2013.
Both sides have argued that the guidelines agreed in May have been a success and encouraged the renewal of collective agreements.
CEOE stressed in a press release (in Spanish) the importance of the agreement, reiterating the various guidelines. However, the sixth point, which states that expired collective agreements should remain in force while renewal negotiations are being concluded, is not mentioned.
The unions, however, in a UGT press release (in Spanish) have made it clear that they view this point as one of the most important outcomes of the agreement.
Unions raise doubts
It is worth noting that the unions have also raised doubts about the effectiveness of the agreement in some regions and sectors.
CCOO, in the most recent edition of its journal (in Spanish, 353 KB PDF), has strongly criticised employer organisations from the Basque Country region, describing them as irresponsible. They have refused to sign an agreement put forward by the unions and the regional government that was intended to promote renewal of provincial collective agreements that are about to expire.
CCOO has also criticised the regional government of the Autonomous Community of Madrid, which has annulled the collective agreement that covers public sector workers, the regional television channel ‘Tele Madrid’ and several public hospitals.
In response, unions have announced that they will take legal action where collective agreements containing an ultra-activity clause have expired and the employer rejects their renewal. Unions say the reform of labour law encourages this approach because it states that collective agreements will end unless the social partners have reached an agreement to the contrary.
The same conclusion has been reached by a number of experts, such as María Emilia Casas Baamonde, Professor of Labour Law and Social Security at the University of Madrid. Her paper, The loss of ultra activity in collective agreements (in Spanish, 153 KB PDF), was presented at a workshop on the impact of labour market reform on collective agreements, jointly organised by UGT and CCOO.
Unions have opposed the termination of the ultra-activity principle by the PP shortly after its election in 2012, arguing that employers will have increased power to impose working conditions on employees.
Perhaps unsurprisingly, employer organisations have welcomed the reforms. Evidence of this can be found in a joint report, Observations of the CEOE and CEPYME on the national programme of reforms 2012 (in Spanish, 312 KB PDF). It argues that the two-year limit on ultra activity after the official expiry date of a collective agreement initially proposed in the Royal Decree 3/2012 of 10 February 2012 was a ‘positive, albeit limited step to adapt collective agreements to the needs of production and employment’. The report argued that this limit should be reduced to just 12 months for agreements lasting three years or less.
Although the social partners have opposing views about the reform, both employer organisations and unions were able to reach agreement on guidelines to encourage the renewal of collective agreements due to expire. This shows that employer confederations are also interested in maintaining collective bargaining as a tool to regulate employment relationships.
However, it must be noted that not all regional and sectoral organisations are inclined to renew the agreements. In the Basque Country and in Barcelona’s transport sector, employer organisations have rejected renewal.
This presents a challenge, not only for unions, but also for employer organisations, if they want the agreement guidelines to be effective. It must be stressed that the guidelines urge the social partners to do everything necessary to foster the renewal of collective agreements. To what extent social partners, and particularly employer organisations, have been able to observe the guidelines will become apparent in the coming months.
Pablo Sanz de Miguel, NOTUS