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REFLECTION
Written by Josep Conesa
Employment and insolvency lawyer
The recent agreement reached between employers' associations and trade unions has secured an important wage moderation pact, an agreement on the structure of collective bargaining, and a "statement of intent" regarding the content of collective bargaining agreements.
While it does not resolve the underlying labour market challenges, it represents a further step along the road towards addressing current problems.
As professionals and specialists in this field, we believe it is essential for the Government to legislate, and to do so with imagination, by creating new rules that reflect the realities of the present moment.
Collective bargaining is constrained by a Workers' Statute that does not provide all the solutions required today. The negotiating parties can only go so far, because they are bound by the margins and limits set by the Statute that governs them. Those margins need to be changed, revised, and supplemented with new provisions, even if subject to time-limited application.
New procedural mechanisms should also be introduced into the Law on Social Jurisdiction to underpin the reforms that the Workers' Statute itself needs.
Finally, beyond this necessary "legislative imagination" in building a labour framework fit for current conditions, there is an equally pressing need for greater speed in the employment tribunals, and despite the considerable efforts of many judges, this is simply not being achieved. Addressing this problem is just as important as all the others. The growing delays we are witnessing in the courts benefit no one: not the employee whose monetary claim may be listed for hearing a year away, and not the employer who needs swift structural changes with minimal uncertainty, and who may instead opt to shed jobs through "free dismissal" at 45 days' pay per year of service, which can be costly but is fast and carries very little legal risk.
OUTLINE OF THE AGREEMENT:
Employer associations and trade unions have reached the following outline agreement:
1) Criteria on pay:
A) Wage increase 2012:
- Wage increase of 0.5%.
- If the CPI for December 2012 exceeds 2%, that excess will be added to the 0.5% (if the Eurozone CPI is lower, the European figure will be used instead).
B) Wage increase 2013:
Same conditions as in 2012, but with a 0.6% increase.
C) Wage increase 2014:
- Will remain at 0.6% if real GDP growth is below 1%.
- Will be 1% if real GDP growth is between 1% and 2%.
- Will be up to 1.5% if real GDP growth exceeds 2%.
D) Wage increases after 2014:
- All of the above will be increased by 50%.
- If variable pay clauses linked to productivity have not been introduced, the increase will be 100%.
E) Productivity-linked pay clauses:
collective bargaining agreements must incorporate variable pay clauses linked to the company's profits, sales, productivity, and similar indicators.
If this has not been done before 2014, the increases set out in the preceding clauses will be raised by 100%.
F) Opt-out clauses from collective bargaining agreements:
Parties that sign sectoral collective bargaining agreements may include opt-out clauses allowing them to disapply the collective bargaining agreement in relation to:
- Working hours.
- Distribution of working time.
- Remuneration system.
- Work organisation and performance system.
- Job functions.
These clauses will not prevent the parties from also pursuing procedures for substantial modification of pay conditions, or salary opt-out procedures, both of which are provided for under the Workers' Statute.
2) Structure of collective bargaining: National and regional agreements set the "ground rules"; however, the intention is to promote decentralisation by encouraging bargaining at company level, as follows:
- Through company-level collective bargaining agreements or other company-level pacts or agreements.
- At the initiative of the parties (the company together with the works council, employee representatives, or, where applicable, the trade union sections that together hold a majority of seats on the works council).
3) Flexibility: In order to achieve greater internal flexibility, sectoral agreements must regulate the following aspects of working time and functional mobility:
- Criteria.
- Grounds.
- Procedures.
- Time periods.
- Reference periods for functional mobility.
- Irregular distribution of working hours at company level.
- Streamlined adaptation procedures.
- Amendment of agreed terms with the participation of trade union or employee representatives, and involvement of joint committees in the event of disagreement.
The remainder of the agreement consists entirely of proposals as to what collective bargaining agreements should cover.
A brief summary is as follows:
- Regarding WORKING TIME, collective bargaining agreements should, in addition to numerous other statements of intent not reproduced here, allow for approximately 10% irregular distribution of the standard annual working hours at company level, and provide for a bank of approximately 5 days or 40 hours of flexibility in the distribution set out in the annual working calendar.
- For temporary situations, collective bargaining agreements should establish criteria for modifying working time arrangements.
- Regarding FUNCTIONAL MOBILITY, collective bargaining agreements should promote professional classification systems based on occupational groups and functional divisions, and establish streamlined mechanisms for functional mobility.
- For temporary situations, with regard to functional mobility, collective bargaining agreements should provide for the possibility of temporary mobility between different occupational groups where there are economic, technical, organisational, or production-related grounds.
- Regarding flexibility in PAY MATTERS, variable pay supplements should exist linked to the company's situation and performance.
In the remainder of the agreement, the parties state that the following should be pursued: in employment and recruitment, promoting permanent contracts over fixed-term contracts, strengthening permanent seasonal contracts, and rejuvenating workforces; regarding subcontracting and outsourcing, promoting the establishment of coordination mechanisms; in training and professional classification, defining criteria and priorities for training; regarding remote working, making it voluntary and reversible for both parties; regarding restructuring, strengthening measures for temporary suspension and reduction of working hours; regarding monitoring bodies, maintaining them; and regarding the right to information and trade union dialogue, keeping employee representatives informed.
SUMMARY:
There is broad consensus that collective bargaining agreement negotiations need to be decentralised, bringing them closer to the reality of small and medium-sized enterprises. However, both employers' associations and trade unions seek to "set the rules" through national-level agreements. There is also agreement that wages should be linked to productivity and company performance, with a degree of wage restraint agreed upon, partly conditional on the inclusion of variable pay clauses to that effect.
From the points outlined in this summary, it is clear that further labour reform legislation from the government is needed. One can only hope that it demonstrates the "legislative imagination" referred to above, and takes action in the areas identified to address the existing challenges in the world of work.
