Spain: II Agreement on Employment and Collective Bargaining 2012, 2013 and 2014

In the context of the profound reform that is being undertaken in the Spanish labour market, one of the most significant changes expected affects the regulation of collective bargaining.

An agreement was recently signed on 25 January 2012 by the most representative organisations at a state level in Spain – namely the employer associations CEOE and CEPYME and trade unions CCOO and UGT – establishing the main guidelines for collective bargaining and the actions that the signatories are committed to adopting over the next three years (until 31 December 2014).

This Agreement is a declaration of intent, a political pact between the most powerful negotiating agents operating at a national level, which will be used as guidance in the negotiation of Collective Bargaining Agreements (CBAs) at a state, regional, local or at a company level. The Agreement was published in the Official State Gazette on 6 February 2012, and revokes the I Agreement for Employment and Collective Bargaining for year 2012.

We set out below a brief note on the most relevant elements brought in by the new Agreement:

1. Structure of the collective negotiation procedure
2. Internal flexibility
3. Other areas affected by flexibility
4. Hiring and employment
5. Subcontracting and outsourcing
6. Training and professional classification

1.   Structure of the collective negotiation procedure

Collective bargaining is meant to (i) establish the rules to articulate existing collective bargaining agreements at different levels; (ii) boost negotiation at a company level; (iii) preserve collective bargaining agreements at a regional level.

2.   Internal flexibility

The Agreement discourages dismissals as an adjustment mechanism, increasing companies' internal organisational flexibility and making it easier to adjust employment conditions.

The CBA shall draw criteria, reasons, procedures, duration and adaptation periods to establish temporary ordinary and extraordinary flexibility measures in respect of the following:

3.   Other areas affected by flexibility

(i)   Salary update

The Agreement recommends restraining salaries – even for top executives and directors – to dissociate wages from inflation and link them to productivity instead.

In this regard, it has been agreed to update salaries according to the following criteria over the next three years (also to be taken into consideration in the event of multiannual review clauses):

¹For the purposes of this calculation, it has been suggested for GDP differences not to take into account oil price increases exceeding 10% per year.

(ii)   Non-application of other labour conditions agreed in the CBA

A possibility has been introduced not to apply, on a temporary basis, an agreed employment condition – such as working hours (either daily timetable or distribution of working hours), shift work, remuneration schemes, work performance system, jobs within the same professional group – when based on causes specified in the CBA, such as persistent fall in income or with the aim of keeping jobs.

The decision not to apply a condition temporarily must be adopted by agreement between the company and the workers' representatives or an appointed commission, in accordance with article 41.1 WS, and may only be applicable until CBA's expiration, or else three years; furthermore, if the conditions are not applied, a substitute regulation must be implemented.

(iii)   Teleworking

Telework will be encouraged, while being voluntary and reversible for both companies and employees. The CBA must ensure equal rights and will govern specific aspects such as privacy, confidentiality, health and safety, training, etc.

(iv)   Restructuring processes

Collective processes to suspend and temporarily reduce working hours will be encouraged with a view to confronting temporary economic difficulties.The Agreement also points at the need to improve the management of these collective processes, taking into account their social and territorial impact on the basis of the scale of the company. Providing due justification and timely information on the collective measures to be implemented may help to prevent distrust.

4.   Hiring and employment

The CBAs are expected to boost the hiring of workers under indefinite employment contracts, the conversion of fixed-term employment contracts into indefinite contracts and the maintenance of employment levels. The Agreement recommends companies to use temporary employment to cover temporary operational or production needs.

CBAs may establish caps on the number of temporary contracts when justified. Instead of using temporary contracts, the Agreement encourages part-time indefinite employment, training contracts or internships to enable young workers to access the labour market. Partial retirement and replacement contracts are used as an instrument to rejuvenate the workforce.

5.   Subcontracting and outsourcing

Collective negotiation shall play a significant role as a channel of communication between the principal employer, contractors and their workers' representatives and employees, especially in relation to coordinating health and safety measures.

Contractor's employees will also be allowed to access to the workers representatives of the principal company to express any issues related to the performance of work at the workplace, provided that no workers' representative exist in the contractor's organisation.

6.   Training and professional classification

The IV National Agreement on Training dated 27 December 2010 has been extended; while the V National Agreement on Training is expected to be approved within six months.

CBAs will define the criteria and priorities related to training, such as the improvement of quality, consistent induction routes focused on professional rank and promotion, priority groups (young, unqualified employees, etc.), rights and obligations, impact of induction on employees and companies, Social Security rebates/bonus for companies, etc.