Collective bargaining is the standard mechanism for regulating working conditions within companies, and its outcomes are ultimately formalised through the adoption of a collective bargaining agreement.
Written by Josep Conesa
Employment and insolvency lawyer
WHAT IS A collective bargaining agreement?
A collective bargaining agreement is an agreement entered into by employee and employer representatives to establish working conditions and productivity standards. It may also regulate industrial peace through mutually agreed obligations. The scope of application of the agreement is determined by the parties themselves.
Parties entitled to negotiate: Depending on the type of agreement being negotiated, the parties with standing to participate will differ.
· For company-level agreements or those covering a narrower scope, the following parties are entitled to negotiate:
- The works council or staff delegates.
- Trade union representatives, where the agreement covers all employees of the company.
- The employer or their legal representatives.
· For sector-wide collective agreements, the following parties are entitled to negotiate:
- The most representative trade unions at national or regional (Autonomous Community) level.
- Trade unions holding at least 10% of the seats on works councils or among staff delegates within the geographical or functional scope of the agreement.
- Employer associations representing at least 10% of the employers within the scope of the agreement, provided they also employ at least 10% of the workers covered by that scope.
How is a collective bargaining agreement initiated?
The party promoting negotiations — whether representing employees or employers — must notify the other party, setting out in detail in that communication the standing it holds, the scope of the proposed agreement, and the matters to be negotiated. A copy of this communication must be sent to the relevant Labour Authority, for registration purposes, based on the territorial scope of the agreement.
The party receiving the communication may only refuse to enter into negotiations on grounds established by law or by an applicable collective agreement. In all cases, any refusal must be given in writing with reasons stated.
Establishment and composition of the negotiating committee:
Within a maximum period of one month from receipt of the communication, the negotiating committee must be constituted. The receiving party must respond to the negotiating proposal, and both parties may then agree on a timetable or negotiation plan.
In the case of collective bargaining agreements at company level, the negotiating committee shall be made up of the employer or their representatives on one side, and employee representatives on the other.
In the case of collective bargaining agreements covering a scope broader than a single company, the negotiating committee shall be validly constituted without prejudice to the right of all legitimately entitled parties to participate in proportion to their representativeness.
The negotiating committee may appoint a chairperson, who may speak but not vote, freely designated by the committee itself. If the parties choose not to appoint a chairperson, they must record in the minutes of the constitutive session the procedures to be used for chairing the meetings.
Negotiation and adoption of agreements:
Both parties are required to negotiate in good faith. Any decisions by the committee shall in all cases require the affirmative vote of a majority within each of the two delegations. At any point during deliberations, the parties may agree to appoint a mediator of their choosing.
Should any form of coercion occur, or should anyone be compelled to reach a particular agreement, the ongoing negotiations shall be immediately suspended.
CONTENT OF THE collective bargaining agreement
Collective bargaining agreements may regulate a wide range of matters:
- Financial: including salaries, indirect remuneration, payment of per diems, commissions, transport allowances...
- Working conditions: covering daily, weekly and annual working hours, rest periods, job categories, contract duration, required performance levels...
- Trade union matters: company committees, staff delegates, negotiation fees,...
- Employment conditions: provisions that may be incorporated into the employment contract.
- The establishment of criteria for determining in-house prevention resources, including the number of workers designated to carry out prevention activities and the time allocated to them, taking into account the risks to which workers are exposed.
- The relations between workers and their representative organisations and the employer and employers' associations.
- Welfare: including voluntary improvements in Social Security coverage.
- Professional development measures.
- Working conditions and productivity.
- Obligations aimed at maintaining industrial peace: setting out conduct that may lead to disciplinary dismissal and the imposition of minor, serious, and very serious disciplinary sanctions.
As minimum content, collective bargaining agreements must set out the following matters:
- Identification of the parties entering into the agreement
- Personal, functional and temporal scope
- Conditions and procedures for the non-application of the pay arrangements established by the agreement, in respect of companies within its scope where that scope extends beyond the individual company.
- Form and conditions for terminating the agreement, together with the applicable notice period for such termination.
- Appointment of a joint committee composed of representatives of the negotiating parties to address matters assigned to it, and determination of the procedures for resolving disagreements within that Committee.
VALIDITY, EFFECT AND DURATION OF THE collective bargaining agreement
Collective bargaining agreements must be made in writing, failing which they shall be null and void. They must be submitted to the competent Labour Authority — solely for registration purposes — within a maximum of 15 days of signature, whereupon the Authority orders their registration and publication in the Spanish Official Gazette. The agreement enters into force on the date agreed by the parties.
Collective bargaining agreements are binding on all employers and employees falling within their scope of application throughout the period they remain in force. Agreements with a scope extending beyond the individual company may include a clause providing for the possible non-application of the agreement's pay arrangements in companies whose financial stability might be jeopardised by such application. Where no such clause is included, non-application may only occur by agreement between the employer and employee representatives, when the company's economic situation so requires. In the absence of agreement, the dispute shall be resolved by the agreement's Joint Committee.
The duration
of the collective bargaining agreement shall be that approved by the negotiating parties. Different periods of duration may be agreed for each subject matter or homogeneous group of subject matters within the same agreement. Agreements shall be automatically renewed on a year-by-year basis unless formally terminated by either party.
An agreement that supersedes a previous one replaces the latter in its entirety, except for any aspects that are expressly retained.
ADHESION AND EXTENSION OF THE AGREEMENT
The parties entitled to negotiate a collective bargaining agreement may, by mutual agreement, adhere to an existing collective bargaining agreement in its entirety, notifying the competent Labour Authority accordingly.
The Ministry of Labour may extend the provisions of an existing collective bargaining agreement to a number of companies where it is impossible to conclude a collective bargaining agreement within that scope due to the absence of parties with the standing to do so.
The decision to extend shall always be made at the request of a party and through a process that may not exceed 3 months. In the absence of an express decision, the request shall be deemed rejected. The following parties shall have standing to initiate the extension procedure:
- The most representative trade unions at national or regional (Autonomous Community) level.
- Trade unions holding at least 10% of the seats on company works councils.
- Employers' associations representing at least 10% of the employers within the scope of the agreement, provided they also employ at least 10% of the workers in that scope.
APPLICATION AND INTERPRETATION OF THE AGREEMENT
Regardless of the powers conferred by the parties on joint committees for the examination and resolution of disputes arising from the application and interpretation of collective agreements, such matters shall be resolved by the competent jurisdiction.
Nevertheless, procedures such as mediation and arbitration may be established for the resolution of collective disputes. Agreements reached through mediation and arbitration awards shall have legal force, provided that those who adopted the agreement had the standing to negotiate.
