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Collective Bargaining

Negotiations take place at national, industry and company level in Spain, with a national agreement generally providing a framework for lower-level bargaining. The overall level of coverage of collective bargaining is high at around 80% of employees, and major legal changes introduced in 2012, have not changed this.

The framework

 

Negotiations between employers and unions take place at three levels: national, industry and company/organisation.[1]

 

National level negotiations, involving the government, unions and employers (sometimes all three, sometimes just employers and unions) have played a key role in determining pay, working conditions and key elements of labour market policy since the 1980s. They have produced agreements on specific issues, like training, social security, health and safety and gender equality, and, in most years since 2002, guidelines on pay increases for lower level negotiators.

 

Examples of national-level agreements on specific issues signed since 2017 include: an agreement on minimum wages in December 2017, which foresaw a substantial real increases over the next three years, although in fact the minimum wage did not grow as agreed; an agreement on training to improve digital skills in April 2018; another agreement on the minimum wage in January 2020; an agreement on employment protection during the COVID-19 pandemic in May 2020; an agreement on remote working (teletrabajo) in September 2020; and an agreement on conflict resolution in November 2020. These agreements are frequently followed by legislation implementing their provisions.

 

Guidelines on the level of pay increases have been agreed between the national unions and the employers covering every year since 2002, with the exception of 2009 and 2017. These agreements, signed by the CCOO the UGT and the main employers’ associations and generally running for three years, make recommendations to negotiators at industry and company level on pay bargaining for the coming year.

 

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 a catch-up payment if inflation turned out higher than forecast.

 

However, this model changed as a result of the financial crisis which hit Spain in 2009., The two three years-deals signed in 2012 and 2015 provided for more modest increases. These were initially below 1.0% and later just over that figure, although the recommended increase for 2017, which was intended to be fixed once government forecast for the year had been published, was never agreed between the two sides. The settlement reached in July 2018 for the three years from the start of 2018 to the end of 2020 marked a return to higher annual increases, with a planned 2% increase in basic pay accompanied by another 1% in variable pay, linked to productivity.

 

The recommendations agreed between unions and employers at national level do not have any binding force. However, figures on pay increases agreed by lower-level negotiators indicate that they are generally observed.

 

Below the national level, where the recommendations are implemented in specific settlements, the structure is complex and overlapping. Past attempts to create a more coherent structure, including an agreement on reform reached by employers and unions in 1997, have not been successful.

 

Figures produced by the ministry of labour show that in 2018, the latest year for which final figures are available, there were 5,589 collective agreements registered as affecting pay in that year, covering 11,423,657 employees. The vast majority of these agreements, 4,413 or 79.0 % were signed at company level but they only covered 857,724 employees, 7.5% of all those covered by collective bargaining. At the other end of the scale, there were 93 national industry deals (1.7% of all agreements), but they covered 3,813,306 employees, a third (33.4%) of the total. In the middle were provincial agreements accounting for an eighth of the agreements registered (12.5%) but a third (33.7%) of the employees. Most other workers were covered by agreements signed at regional level, which made up 5.0% of the agreements registered but almost a quarter (22.8%) of employees.[2] These proportions have remained broadly constant in recent years.

 

The general pattern 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. In addition, some industries, like construction, banking and chemicals have national agreements. Collective agreements are binding on all employers and employees in the areas that they cover, providing they have been agreed by unions and employers or employers’ associations with the right to sign them (see section on “Who negotiates and when?”).

 

The government has powers to extend collective agreements in areas where negotiations have not taken place, and these were strengthened in 2005. However, a study in 2011 concluded that the extension of agreements in this way played an “increasingly marginal role” in Spanish industrial relations, with no agreements at all being extended in 2010.[3] There is no evidence that this has changed.

 

Despite this, collective bargaining coverage is high. Comparing the 2018 figure of the number of employees actually covered by collective bargaining (11,423,657) with the number of employees registered for social security contributions and thus potentially covered by (14,288,800) produces a figure for collective bargaining coverage of 79.9%.[4] (These figures exclude civil servants, whose terms and conditions are negotiated under different arrangements, which were strengthened in 2015.)

 

This figure of 80% bargaining coverage is only slightly lower than those recorded in the period since 2010, when the system for registering collective agreements was changed.[5]

 

This suggests that the major legal changes to collective bargaining introduced in 2011 and greatly strengthened in 2012 (see below for details) have not had a dramatic impact on the proportion of workers whose terms and conditions are set through collective. Reports suggesting a dramatic fall in bargaining coverage, such as one indicating a drop from 81% in 2011 to 46% in 2015,[6] are misleading because they are based on provisional figures for later year,s and agreements are often registered up to 18 months after the year to which they apply. The final figure for collective bargaining coverage in 2015 was 80.3%.

 

This does not mean that the changes introduced in 2012, which the unions have continued to oppose, have not had an impact on collective bargaining. The legislation (Ley 3/2012), known as the” reforma laboral”, which built on other similar legal changes (RDL 7/2011) introduced in 2011, gives a much greater role to company bargaining, as well as allowing companies, in certain circumstances, to suspend key agreement terms.

 

As a result, company agreements now have complete and explicit precedence in key areas, even if the provincial-level agreement covering their industry is still in force.  Company agreements can 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 key agreed terms and conditions. The areas covered by this suspension include pay systems and the level of pay, working time, 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. In addition, the legislation introduced changes to the length of time agreements continued to be effective after they had formally expired (see below).

 

The overall impact of these changes is difficult to assess. As already noted, there has not been a substantial fall in the coverage of collective bargaining, and while the number of company-level collective agreements has increased by 29% – from 3,422 in 2011 to 4,413 in 2018 – the number of employees covered by these agreements has fallen by 8% – from 929,000 in 2011 to 857,700 in 2018. Over the same period, the number covered by agreements signed at a higher level – provincial, regional and national – has risen by 9% from 9.73 million to 10.57 million. At the very least, there has been no substantial switch from industry-level to company-level agreements.

 

The ministry of labour statistics on collective agreements also indicate that only limited use is being made of another aspect of the 2012 changes, the possibility of suspending some elements of agreed terms and conditions. In 2018, 857 companies/workplaces, employing 20,924 people, suspended some elements of the collective agreements covering their activities.[7] This is a tiny fraction of the 1.36 million companies and 11.42 million workers covered by collective agreements in 2018. The figures also show that in most cases it is small companies which suspend agreements – 84% of the companies using this mechanism in 2018 employed fewer than 50 employees. However, the 15 companies with more than 250 employees, which took advantage of the opportunity to suspend their agreements, employed 4,465 workers, 21% of the total.

 

A 2019 study by CCOO, one of the two most representative union confederations, looked at the measure over a longer period, from October 2010 to February 2019.[8] It confirmed that most of the 9,673 cases registered over the period were in small companies, with 60.3% in companies with 10 or fewer employees, but that large companies, with more than 250 employees, accounted for a large proportion – in this study 50% – of the employees whose agreements were suspended. The study also found that the largest number of suspensions were in 2013, the year after the introduction of the measure, when 2,572 covering 161,835 workers were registered. (This is almost half (46%) of all the employees whose agreements were suspended over the eight-an-a-half year period.) In almost every case (97%) companies suspended the terms of the industry agreements that covered them, and the industries most affected were retail, hospitality, the iron and steel industry and construction and public works.

 

Irrespective of the precise effect of the various measures introduced in 2012, the unions see reversing them as a top priority. The coalition government of the social democratic PSOE and the more left-wing Unidas Podemos, which took office in January 2020, has indicated it is willing to make changes to existing legislation, and, shortly after taking office, it repealed a clause in the legislation permitting the general dismissal of sick employees. However, it has also suggested that a full repeal may depend on agreement between the unions and the employers.

 

In addition to collective bargaining between unions and employers, there is also a national consultative body, the Economic and Social Council (CES) made up of equal numbers of representatives of the employers, the unions and other groups (representing agriculture, fishing, consumers, cooperatives plus experts). It is consulted on proposed legislation on socio-economic and employment issues and it can draw up its own proposals and reports. The 20 union representatives consist of nine each from the two most representative union confederations (CCOO and UGT) and one each from Basque confederation ELA and the Galician confederation CIG.[9]

 

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 negotiating bodies are the employer and the works council, although union sections at company level can sign agreements, if they hold a majority of seats om the works council. At higher level – provincial, regional and national – the only trade unions who can sign the agreement on behalf of all the employees in the industry concerned are union bodies which are affiliated to the "most representative unions" at national or regional level (if it is a regional or provincial agreement) or other unions which can demonstrate a specific level of support in the area covered by the negotiations. This level is set at 10% of the members of the works councils in the geographical and industrial area covered by the agreement

 

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 threshold 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. In addition, the public service union CSIF has most representative union status in public administration. Figures from the ministry of labour show the extent to which negotiations are dominated by CCOO and the UGT. In 2018 CCOO signed agreements covering 98.4% of all employees affected by collective bargaining; for the UGT the figure was 98.5%; and for all other unions it was 27.0%.[10]

 

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 several years, with the period set out in the agreement. Three years is typical, but some last longer. For example, the department store agreement signed in 2017 lasts for four years.

 

Changes in the length of time the terms set out in agreements continue to be in force after the agreements themselves officially expire was one of the key elements of labour legislation (Ley 3/2012) introduced in 2012 (see above). The legislation limited the period to one year, after which point the higher-level agreement would apply. However, the impact of the change has been less than expected. This is in part because of agreements between the employers and unions, including the national agreement in 2017, which have found ways to overcome problems presented by the law, and in part because of court judgements which have limited the extent to which existing terms and conditions can be set aside. In addition, most agreements signed after 2012 have made use of the possibility provided by the legislation of including clauses guaranteeing that they will continue to apply after they formally expire.

 

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 covering the whole economy deal with non-pay issues such as training, equality and remote working, and since 2002 have, in a series of three-year deals, set broad guidelines on pay increases.

 

Lower-level agreements normally cover pay and working time, although clauses which in the past provided additional payments if inflation exceeded an agreed level, have become less common. (Only 18% of agreements in force in 2018 included such clauses.[11])

 

They can also cover a range of other issues, and the ministry of labour publishes statistics on the extent to which these topics are included in agreements. These show that:

  • 91% of workers were covered by agreements including arrangements for social payments, such as in case of sickness or accidents at work;
  • 87% of agreements included details of job classification;
  • 79% covered arrangements for time-off for union representatives;
  • 51% covered training; and
  • 48% included clauses covering pension arrangements.

 

Companies with 50 or more employees are required to draw up and implement a gender equality plan, which much be negotiated with the employee representatives, and the ministry of labour figures show that 45% of employees are covered by collective agreements promoting equality between women and men. Other topics found in agreements include: switching from temporary to permanent employment (30% of workers are covered by agreements including such clauses); limits on the use of temporary workers (26% of workers covered); and  health and safety training (19%).     

 

Spain has a national minimum wage which is normally uprated in January. This is set annually by the government after consultation with most representative trade unions and employers associations, and the legislation (Estatuto de los trabajadores Art 27) states that the government should take the consumer price index, increases in national productivity, labour’s share in national income and the general economic situation into account. In practice, some increases have in the past been implemented following national agreements between unions and employers. However, this has not always occurred.

[1] For a detailed examination of collective bargaining in Spain see Spain: challenges to legitimacy and representation in a context of fragmentation and neoliberal reform by Carlos J. Fernández Rodríguez, Rafael Ibáñez Rojo and Miguel Martínez Lucio in Collective bargaining in Europe: towards an endgame, edited by Torsten Müller, Kurt Vandaele and Jeremy Waddington, ETUI, 2019

[2] Estadística de Convenios Colectivos de Trabajo: 2018 Datos Definitivos CCT-II.2 (percentages calculated) http://www.empleo.gob.es/estadisticas/cct/welcome.htm (Accessed 04.11.2020)

[3] Balance de las experiencias de extensión de convenios colectivos en España, by Tomás Sala Franco and Javier Thibault Aranda, 2011

[4] Ministerio Trabajo y Economía Social. Datos anuales. Estadística de Convenios Colectivos de Trabajo. Boletín de Estadísticas Laborales

[5] Figures calculated on the basis of the number of employees covered by collective bargaining and the number registered for social security contribution (Régimen General) show coverage at 82.0% in 2010, 83.2% in 2011, 81.0% in 2012, 85.8% in 2013, 84.8% in 2014, 80.3% in 2015, 81.1% in 2016 and 79.0% in 2017.

[6] La cobertura de los convenios colectivos bajó del 81% al 46% con la reforma laboral, Libre Mercado 30.06.2018, https://www.libremercado.com/2018-06-30/la-cobertura-de-los-convenios-colectivos-bajo-del-81-al-46-con-la-reforma-laboral-1276621123/ (Accessed

[7] Estadística de Convenios Colectivos de Trabajo: 2018 Datos Definitivos CCT-III. http://www.empleo.gob.es/estadisticas/cct/welcome.htm (Accessed 04.11.2020)

[8] Los acuerdos de inaplicación de convenios colectivos en cifras, CCOO, December 2019 https://www.ccoo.es/e9d82eef33d18d09f654f24df8888fdb000001.pdf (Accessed 04.11.2020)

[9] CES website http://www.ces.es/funciones (Accessed 04.11.2020)

[10] Estadística de Convenios Colectivos de Trabajo: 2018 Datos Definitivos CCT-I-4 http://www.empleo.gob.es/estadisticas/cct/welcome.htm (Accessed 04.11.2020)

[11] Estadística de Convenios Colectivos de Trabajo: 2018 Datos Definitivos CCT-I-3.1 http://www.empleo.gob.es/estadisticas/cct/welcome.htm (Accessed 04.11.2020)

L. Fulton (2021) National Industrial Relations, an update (2019-2021). Labour Research Department and ETUI (online publication). Online publication available at http://www.worker-participation.eu/National-Industrial-Relations.