Intersectoral bargaining framework agreed for 2005

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In March 2005, the Spanish social partners reached an intersectoral agreement providing guidelines for lower-level collective bargaining in 2005 , as they had done in the three previous years. The agreement contains two main new features: it includes the possibility of being extended to cover 2006; and it lays down measures to control unjustified absence from work. The agreement reflects the concern of the social partners about improving competitiveness and the quality of employment, and provides for continuing pay moderation.

The main employers' organisations - the Spanish Confederation of Employers’ Associations, (Confederación Española de Organizaciones Empresariales, CEOE) and Spanish Confederation of Small and Medium-Sized Enterprises (Confederación Española de la Pequeña y Mediana Empresa, CEPYME) - and the main trade union confederations - the Trade Union Confederation of Workers’ Commissions (Comisiones Obreras, CC.OO) and the General Workers’ Confederation (Unión General de Trabajadores, UGT) - signed national intersectoral agreements laying down guidelines for lower-level collective bargaining (sectoral, regional and company level), covering 2002 (ES0201207F), 2003 (ES0302204F) and 2004

The renewal of the intersectoral agreement ('Acuerdo Interconfederal para la Negociación Colectiva', AINC) for 2005 (ES0412105F) had been blocked since December 2004 due to CEOE's disagreement with a draft accord between government and social partners to increase the national minimum wage by 4.5% in 2005, and to apply a wage guarantee clause whereby, if inflation exceeds the increase in the minimum wage, the latter will be adjusted upwards. (ES0502203N). The employers' confederation claimed that this clause would push up pay in general. However, on 4 March 2005, CC.OO, UGT, CEOE and CEPYME signed a renewal of the AINC for 2005, including the possibility of extending it to 2006 if the main variables related to economic growth and job creation are maintained. The agreement covers 10 million workers, 1 million companies and 5,000 collective agreements.

The key points of the AINC 2005 are as follows:

  • wage moderation, taking as a reference the forecast inflation rate, which is 2%, with a wage guarantee clause to provide for any difference between this and the real inflation rate. The formula for pay developments, which is that used since 2002, consists in taking into consideration the forecast inflation rate plus the increase in productivity. According to the social partners, this formula has kept annual pay rises at between 2% and 3%, thus avoiding an inflationary spiral - see the table below. In 2004, 77% of the workers covered by collective agreements were protected by wage guarantee clauses;
  • job creation and higher 'employment quality', which is seen as being threatened by the high temporary employment rate. Collective bargaining is thought to have been enhanced by the inclusion of employment as a point key on the agenda, and in recent years clauses on employment quality have become common in agreements;
  • a focus on equal opportunities, with EU Directives having been fundamental for the inclusion of this subject on the agenda of the social partners;
  • an increase in the low level of productivity, one of the problems facing the Spanish economy. The signatories feel that the issues of work organisation and technological innovation must be tackled in order to face international competition;
  • improved occupational risk prevention. The workplace accident rate is high, a fact regarded as closely related to temporary employment, though in 2004 the number of accidents fell slightly (ES0502207F);
  • as new features, the inclusion of measures to control unjustified absence from work, and the aims of fostering the social responsibility of employers and facilitating the access to the labour market of women affected by gender-based violence (ES0501105F).

The social partners that are parties to the agreement share certain common points of view on the situation of the Spanish economy, such as: the current framework of uncertainty; the negative contribution of the export sector to growth; the problems of low competitiveness; the need to increase the added value of production and avoid pay cuts; and the worrying level of debt of families.

Increases in prices (retail prices index, RPI) and agreed pay 1996-2004 (%)
. Target increase in RPI Real RPI increase on 31 December Pay increase, including wage revision clauses
1996 3.5 3.2 3.8
1997 2.5 2.0 2.9
1998 2.1 1.4 2.6
1999 1.8 2.9 2.7
2000 2.0 4.0 3.7
2001 2.0 2.7 3.7
2002 2.0 4.0 3.7
2003 2.0 3.0 3.8
2004 2.0 3.0* 3.6*

Source: Report on the socio-economic situation of Spain ('Memoria sobre la situación socioeconómica de España'), Economic and Social Council (Consejo Económico y Social, CES), 2004. The figures for 2004 are provisional and are taken from the Ministry of Labour.

Employers' position

CEOE and CEPYME considers that the structure of collective bargaining must be modified, and this subject will be dealt with in the 'commission for the social dialogue' (Mesa para el Diálogo Social) set up by the government and social partners (ES0408101F). CEOE is particularly concerned about the development of the competitiveness of the Spanish economy, which depends in part the framework of industrial relations. Among other measures, it has asked the government to reduce company taxation and employers' social security contributions in order to: reduce indirect costs and improve job creation; make the labour market more flexible; reduce the time required to set up a company (108 days in Spain, compared with only four in Denmark, it is claimed); and increase investment in research and development.

The document entitled 'Competitiveness, stable employment and social cohesion. Declaration on social dialogue 2004' ('Competitividad, Empleo Estable y Cohesión Social. Declaración para el Diálogo Social 2004') signed by the incoming Socialist Party (Partido Socialista Obrero Español, PSOE) government and the social partners in July 2004 (ES0408101F) committed the signatories to seeking solutions to improve simultaneously competitiveness and the quality of employment (which has a high rate of precariousness) (ES0502105F) .

Trade unions' position

CC.OO and UGT have agreed a joint document entitled 'joint objectives and criteria for collective bargaining and the renewal of the AINC 2005', which has three main aspects. First, they state that there is a need to establish a framework of stable and sustainable economic growth as a basis for increasing productivity and employment quality. The November 2004 report on the EU's Lisbon strategy, issued by a high-level group chaired by the former Dutch Prime Minister Wim Kok (EU0412205F), warns of the problems of the low employment quality in Spain, which makes it difficult to meet the objectives for 2010 laid down in the Lisbon strategy.

Second, the trade unions have a positive view of the experience of collective bargaining coordinated through the AINCs since 2002. They value the AINC as a formula for establishing criteria and orienting the negotiation of collective agreements. The most outstanding aspects of this formula lie in: the reinforcement of the collective autonomy of the parties; the gradual increase in employment stability (though it is still regarded as insufficient); the maintenance of the purchasing power of wages thanks to wage guarantee clauses; and the extension and improvement of equal opportunities for men and women (ES0410204F). In general, the content of collective bargaining has been enhanced with new subjects, such as occupational risk prevention, equal treatment and teleworking.

Third, the priority objectives of the trade unions for the AINC 2005 are to introduce a new model of production that favours regional balance and social cohesion, to reinforce collective bargaining and to extend its coverage through the articulation of bargaining at sectoral and lower levels. The aim is to overcome the current fragmentation in the structure of collective bargaining. Other objectives are: achieving a greater trade union role in the recruitment of workers and in the control of subcontracting; increasing the purchasing power of workers; and extending the content of agreements through the regulation of rights that prevent the individualisation of industrial relations and reinforce the participation of the trade unions in information and bargaining on work organisation.


The parties to the July 2004 declaration on the social dialogue (see above) warned that the future of the Spanish economy could not continue to be based on intensive work and low labour costs. Today, improving competitiveness requires an effort of technological and organisational innovation that must be made by the companies, and an effort to improve investment in research and development (R&D). Spanish investment in R&D is among the lowest in the EU, at 1.11% of GDP compared with an average 1.99% for the EU 15 in 2003.

The other challenge is the improvement of employment quality - a subject that was dealt with in the 1997 interconfederal agreement for employment stability (Pacto Interconfederal para la Estabilidad en el Empleo) (ES9706211F) and led to a process of transformation of temporary jobs into open-ended ones through subsidies for the new contracts. However, the temporary employment rate is still very high (ES0409104F). One of the reasons is that it is a convenient solution for small and medium-sized enterprises, but this attitude has also been transferred to the public administration, as shown by the increase in temporary employment in this sector (ES0502206F). (Antonio Martín Artiles, QUIT-UAB)

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