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Collective Bargaining

Negotiations take place at national, industry and company level in Spain and since 2002, with the exception of 2009, an annual national agreement has provided a framework for lower-level bargaining. The overall level of coverage is high at around 70% of the total workforce.

The framework

Negotiations between employers and unions take place at three levels: national, industry and company/organisation.

National level agreements cover both major non-pay issues and, since 2002, with the exception of 2009, guidelines on pay increases for lower level bargainers.

The major non-pay agreements are sometimes tripartite, involving the government, unions and employers, and sometimes just between the employers and the unions at national level. They have covered a range of topics including attempts to increase the number of workers on permanent contracts and reduce the number of temporary workers – a major problem in Spain, improvements in training, changes in social security arrangements, equality of treatment and opportunities for men and women, and health and safety. The European framework agreement on violence at work was also implemented in this way.

A recent major tripartite agreement was that signed by the government, the employers and the two main union confederations CCOO and UGT in February 2011. Its key component was an agreement on pensions, but it also included active labour market measures to reduce unemployment, industrial and energy policy, a promise by the government to reopen talks with the unions on the public sector, and reforming the collective bargaining system.

A recent bipartite agreement on non-pay issues, involving just the employers and the unions (CCOO and UGT), was the agreement on the autonomous resolution of industrial conflicts, signed in February 2012.

Bipartite guidelines on pay increases have been agreed for every year since 2002 with the exception of 2009, when, with inflation falling and the economic climate deteriorating, the two sides were unable to reach agreement. These agreements have been signed by the CCOO the UGT and the main employers’ associations, make recommendations to negotiators at industry and company level on pay bargaining for the coming year. These recommendations do not have any binding force. However, figures on pay increases agreed by lower level negotiators indicate that they are generally observed.

Until 2012, the agreed formula was that negotiators should seek an agreement combining a pay increase at the level of forecast inflation with an amount to take account of higher productivity, plus, in later years, a clause guaranteeing a catch-up payment if inflation turned out higher than forecast. The most recent agreement along these lines was signed in February 2010, following a failure to agree the previous year, when a new three-year agreement was reached.

However, before this deal had expired, in January 2012, another three-year agreement was signed. In an attempt to respond to Spain’s worsening economic position, particularly the dramatic rise in unemployment, this recommended pay increases below the level of inflation (0.5% in 2012, 0.6% in 2013 and between 0.6% and 1.5% in 2014, depending on growth).

Below the national level, where the recommendations are implemented in specific settlements, the structure is complex and overlapping.

Figures produced by the ministry of labour indicate this complexity.1 In 2010, the latest year for which final figures are available, there were 5,067 collective agreements registered covering 10,794,334 employees. Three-quarters (75.0%) of the agreements were company agreements but they only covered less than one in ten (8.6%) of employees covered by collective bargaining. At the other end of the scale national industry deals made up only 1.7% of all agreements, but they covered 26.8% of employees. (Industries, like construction, banking and chemicals have national agreements.) In the middle were the provincial agreements accounting for a fifth (19.2%) of the agreements signed but just over half (53.7%) of the employees. The remaining 10.9% of workers were covered by agreements signed at other levels, in particular regional level. These proportions have remained more or less constant in recent years.2

The general pattern until now – there have been recent legislative changes (see below) – has been that large and medium sized companies have their own agreements, sometimes at plant level, while smaller employers have been covered by provincial agreements for their industry. The government also has powers to extend collective agreements in areas where negotiations have not taken place. However, although these powers were strengthened in 2005, they are now very rarely used. No agreements were extended in 2010, for example.3

Past attempts to create a more coherent structure, including an agreement on reform reached by employers and unions in 1997, have not been successful. However, as a result of the financial and economic crisis, a new pattern may be emerging. In 2011, the socialist-led government introduced legal changes (RDL 7/2011) giving a greater role to company bargaining and the current centre-right government has gone further in the same direction with additional legislation in 2012 (Ley 3/2012) – developments which the unions have opposed.

As a result, the current position is that, company agreements now have complete precedence in key areas, even if the provincial-level agreement covering their industry is still in force. Company agreements are able to set terms on wages, hours, grading and other issues, such as work-life balance, irrespective of those in industry-level agreements. In addition, where a company faces particular financial difficulties, it is able to suspend many of the agreed terms and conditions. The areas covered by this suspension include working time, pay systems and the level of pay, shift systems and increased functional mobility. The employee representatives (essentially the unions) should be consulted on these proposals but, if they do not agree the issue goes to arbitration for a decision.

One potential result of this change is that the coverage of collective bargaining may fall. Until recently it has been relatively high. On the basis of the 2010 figures from the ministry of labour quoted above (5,067 collective agreements covering 10,794,334 employees) and with 15.35 million employees, collective bargaining coverage was 70% in 2010. However, the 2010 figures are slightly down on the previous two years – in 2008 a total of 5,987 agreements covering a record number of 11,968,100 employees were signed.

Since then provisional figures indicate a further fall. By the end of March 2013 only 4,414 agreements covering 10,035,500 employees had been signed for 2011 and only 3,016 agreements covering 6,693.600 had been signed for 2012, although the 2012 figure is certain to rise as delayed agreements are registered.4

It remains to be seen whether this trend will be confirmed and whether it will continue into the future. However, the legal precedence that has been given to company level bargaining has the potential to change the negotiating structure.

Who negotiates and when?

Collective agreements are legally binding on all employees in the area they cover, provided the negotiating parties are entitled to sign the agreement (although the employer is now able to suspend some of these terms in times of economic difficulty – see above). At the company and plant level the appropriate bodies are the employer and the works council. But at higher levels the only trade unions who can sign the agreement on behalf of all the employees are the "most representative unions" at national or regional level or unions which can show that they have a specific level of support in the area covered by the negotiations.

The status of "most representative union" depends on support in the works council elections. At national level a confederation must get 10% of the votes, while in the autonomous regions the barrier is 15%. Nationally only the CCOO and UGT are "most representative unions". ELA/STV and LAB also have this status in the Basque Country and CIG in Galicia. Figures from the ministry of labour show the extent to which negotiations are dominated by CCOO and the UGT. In 2010 CCOO signed agreements covering 97.9% of all employees affected by collective bargaining, for the UGT the figure was 97.6% and for all other unions it was 24.5%.5

The law lays down specific rules as to how negotiations are to be conducted and the composition of both sides. It also states that negotiations must be carried on in "good faith". One problem in some industries is that the trade unions have no employer grouping with whom to negotiate.

Agreements normally last two years or more. The official statistics on collective agreements in 2010 show that of the total 5,067 agreements registered in that year, only 1,460 were signed for the first time in 2010 (the remaining 3,607 had been signed earlier and were revised in 2010). Of those signed for the first time in 2010, the vast majority, 1,199 (82.1%), were multi-year agreements and only 261 (17.9%) lasted for a year.

The length of time the terms set out in agreements continue to be in force after the agreements themselves officially expire has been affected by the recent changes to the law. This is now limited to one year, after which point the higher level agreement applies.

Agreements almost invariably start from 1 January. But typically negotiations do not begin until later in the year when the inflation figures are available and often drag on for months.

The subject of negotiations

The national agreements deal with non-pay issues such as employment contracts, training and equality, and from 2002 have set broad guidelines on pay increases in every year but 2009. Lower level agreements normally cover pay and working time often with a clause providing additional payments if inflation exceeds an agreed level. They can also cover other issues such as training, job classification, sickness, maternity arrangements and health and safety and since 2005 there has been a sharp increase in the number of agreements covering employment – in particular arrangements aimed at increased the proportion of permanent employees.

Spain has a national minimum wage which is normally up-rated by the government on an annual basis in January. In the past it was increased in line with the government’s forecast for inflation over the coming year, but from 2004 to 2009 the socialist government increased it more rapidly, with the aim of reaching €800 per month by 2012. However, in both 2010 and 2011 the increases were much lower (1.5% in 2010 and 1.0% in 2011) and in 2012, following a change of government it was frozen. In 2013 it was increased by 0.6%.

L. Fulton (2013) Worker representation in Europe. Labour Research Department and ETUI. Produced with the assistance of the SEEurope Network, online publication available at http://www.worker-participation.eu/National-Industrial-Relations.