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Back in 2010, we were already noting that labour reforms had reduced the requirements and formalities involved in many aspects of collective bargaining, both within and outside the company. These reforms opened up possibilities that had previously been unthinkable, and companies struggling to survive the severe economic crisis of the time began adopting solutions that would have been inconceivable just five years earlier.
Today, in the context of the Covid crisis, it remains important to understand how the opt-out from a collective bargaining agreement works.
Opting out of a collective bargaining agreement:
One such solution is the non-application, or opt-out, of a collective bargaining agreement.
Before the labour reforms, a salary opt-out meant "deferring payment of something now, to be paid and brought up to date at a later stage", which more often than not simply postponed the problem, making it an unattractive option for employers.
Today, a salary opt-out allows a company to "cease applying what the current collective bargaining agreement requires, until a new collective bargaining agreement comes into force".
This represents a fundamental shift in how companies can approach a potential solution to a crisis. It does, however, require the company to demonstrate economic, organisational, productive, or technical grounds, and to carry out a period of negotiation or consultation with employee representatives, or with staff representatives elected specifically for this purpose.
COMPLIANCE WITH THE MINIMUM STANDARDS OF THE Workers' Statute:
The company must observe the minimum standards set out in the Workers' Statute, but may seek to opt out of the provisions of its applicable collective bargaining agreement in respect of:
- working hours;
- timetable arrangements;
- distribution of working time;
- shift work arrangements;
- pay structure and salary levels;
- work systems and performance measures;
- job functions (where these go beyond the scope of Article 39 of the Workers' Statute);
HAVING A CLEAR OBJECTIVE AND TIMEFRAME:
The law also requires the company to be equally clear and to define precisely which working conditions it wishes to establish and for how long.
PRESUMPTION OF VALIDITY WHERE AGREEMENT IS REACHED WITH EMPLOYEE REPRESENTATIVES:
Reaching an agreement with employee representatives means that, in the event of any employment claim, the stated grounds will be presumed valid.
ADVISORY COMMISSION WHERE NO AGREEMENT IS REACHED:
In the event of a disagreement regarding the non-application of the collective agreement, the matter shall be resolved compulsorily through the arbitration mechanisms provided for in the collective bargaining agreement, or by the National Advisory Commission on Collective Bargaining Agreements.
PRACTICAL SOLUTIONS IN COMPANY RESTRUCTURINGS:
Given the difficulty, and potential delays, involved in reaching agreements to establish a company-level collective agreement, and given the urgent need to turn around a deteriorating situation within the company, we are increasingly seeing companies opt for combined solutions pursued in parallel, even where they serve different purposes:
- collective modification of working conditions,
- temporary suspension or reduction of working hours procedures,
- negotiation of a company-level collective agreement,
- and non-application of the current collective bargaining agreement.
Today, both employers and employees are fully aware of the crisis; but if reaching agreement continues to prove difficult, agreeing on a time-limited arrangement is a sound approach. There is always light at the end of the tunnel, and we all hope to see it around the next corner.
If you need assistance with negotiations, do not hesitate to get in touch:
Original post 2010
