National Court rules against freezing of civil servants' pay

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In January 2001, Spain's National Court ruled in favour of a trade union appeal against the freezing of civil servant's wages by the People's Party government in 1997. If this ruling is implemented, it could involve payments of at least ESP 500 billion. The trade unions have begun to mobilise civil servants to call for the immediate payment of the arrears.

In drawing up the 1997 state budget, the first People's Party (Partido Popular, PP) government led by Prime Minister José María Aznar decided not to implement the three-year wage agreement (1995-7) for civil servants concluded by the previous (Socialist) government and the trade unions (ES9702201N). This deal involved annual pay increases equivalent to the increase in the retail prices index (RPI). The government claimed at the time that this unilateral decision was taken in order to control public expenditure and the deficit in order to comply with the process of European economic convergence.

The Teaching Federation (Federación de Enseñanza) affiliated to the Trade Union Confederation of Workers' Commissions (Comisiones Obreras, CC.OO) appealed for a judicial review of this pay freeze to the National Court (Audiencia Nacional), arguing that under Spanish law it is obligatory to negotiate the pay of civil servants and that the government had also infringed International Labour Organisation (ILO) Conventions signed by Spain (ES9712236N).

In late January 2001, the National Court ruled in favour of the union's case and stated that the government must pay the agreed pay increases, which would amount to over ESP 500 billion. The Court also stated that the pay increase is applicable to both civil servants and non-civil service staff of the various state administrations.

Government and opposition responses

The government has refused to start negotiations with the trade unions on paying the arrears, and on 2 February it presented an appeal that has been accepted for referral to the Supreme Court (Tribunal Supremo). The government now has 30 days to submit the appeal to Supreme Court, and the CC.OO Teaching Federation has 30 days to make any arguments against the acceptance of this appeal.

The government argues that subordinating an item of the state budget to earlier collective agreements is equivalent to limiting the powers of parliament. It also claims that the state budget is a fundamental instrument of macroeconomic policy, which cannot be governed by the decisions of a previous government when contextual circumstances arise, such as the need for convergence with the rest of the European Union. The presidents of the two houses of parliament, the Congress and the Senate, have stated openly that the implementation of the National Court ruling would erode the power of the two chambers.

For their part, the left-wing political parties - the Socialist Party (Partido Socialista Obrero Español, PSOE) and the United Left (Izquierda Unida, IU) - have called on the government to accept the ruling and to call a meeting of the General Civil Service Commission (Mesa General de la Función Pública) in order to negotiate the form of payment and to find a fair solution that would avoid a confrontation with the powers of the state.

Trade unions call for immediate application of ruling

The majority trade unions representing civil servants - CC.OO, the General Workers' Confederation (Unión General de Trabajadores, UGT) and the Independent Trade Union Confederation of Civil Servants (Confederación Sindical Independiente de Funcionarios, CSI-CSIF) - have called for the immediate application of the ruling. The general secretaries of CC.OO and UGT have become heavily involved in the issue, taking advantage of the situation to call for genuine collective bargaining in all areas of the public administration. "If the government does not pay, there will be a long, hard dispute that may end in a general strike of civil servants," stated José María Fidalgo, general secretary of CC.OO. The unions have already organised major mobilisations, which have ended the relative peace in civil service industrial relations in the last few years. They are putting forward three demands: the immediate and full application of the ruling; bargaining on pay for 2001 (the government has imposed an increase of 2% for the year without bargaining, leading to a strike of civil servants on 14 December 2000 - ES0101228N); and a wage revision clause to increase pay when the real RPI is greater than the forecasts (as occurred in 2000 when the increase in prices was almost double the pay rise awarded to civil servants). The trade unions have failed to achieve this last demand under any government since democracy was restored in the 1970s.

The trade unions have been informing all levels of the public administration of the quantitative details of the court ruling, so all civil servants already know how much they are owed, according to their wage levels. The union leaders are preparing mobilisations - with the first demonstrations being held on 13 and 15 February - that they believe could gradually culminate in a general strike of public employees in May or June. Finally, they are beginning to forward to the government individual claims for payment of the arrears of employees. If the government fails to pay within a reasonable period of time, these claims will be passed to the National Court, which could lead to a major crisis in the legal system.

Legality and reality

The complexity of the issue has led to varying legal interpretations. Many experts agree with the National Court that - although the Spanish Constitution states that the government is empowered to draw up the budget and the houses of parliament are empowered to examine, amend and approve it - this must be done subject to the law. Law 7/1990 obliges the government to negotiate the pay of civil servants. Indeed, a three-year agreement (published in the official journal, the Boletín Oficial del Esta do, in September 1994) had been negotiated and signed, and agreements are meant to be fulfilled.

Those who disagree with the ruling argue that the houses of parliament cannot be forced to accept pacts by third parties in drawing up the budget, because otherwise they would not have autonomy to discuss and establish economic policy. They also point out that the agreements for 1996 and 1997 were not firm, but merely guidelines.

Others argue that the reality is that in 1997 the Minister for the Public Administration refused to enter into any type of bargaining, claiming that the government needed a zero increase in the wage bill in order to fall within the terms of EU economic convergence.

Commentary

The government's refusal to abide by the terms of the agreement signed by the civil servants' unions and the Socialist government is surprising, especially because the agreed pay rise was merely the forecast for the RPI, with no wage revision clause.

The government wishes to have full discretionary powers over the handling of public expenditure, which is arguably incomprehensible when legitimate interests such as pay are concerned. In fact none of the democratic governments have taken seriously the obligation and the need to negotiate pay and working conditions with their employees. At least in the central administration, bargaining with the representatives of the civil servants is rarely more than consultation (ES0010214N). This is the fundamental problem: whether or not the representatives of civil servants are entitled to negotiate their working conditions, as is laid down by Spanish law and the ILO Conventions that Spain has signed. Just as bargaining on wages and work organisation affects companies' policies, and this is in fact its raison d'être, agreements on the pay of public employees obviously affect the national budget and this is why bargaining has to be conducted beforehand, but this is no justification for not respecting agreements.

The trade unions are therefore right to react forcefully in response to the government's refusal to accept the court ruling. It is highly likely that there will be demonstrations and partial strikes, but the definitive judgment may be a long time in coming, so a general strike of civil servants may be too risky. (Fausto Miguélez, QUIT)

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