Contesting the collective labor agreements of outsourcing companies

Two major labor unions have been contesting at the Labor Chamber of the National Appellate Court, since last July 2015, the collective labor agreements of over forty outsourcing services companies.

The common theme in the majority of the challenges submitted, is the existence of formal defects in the negotiation process of the collective labor agreement and, in particular, the lack of standing of the workers’ statutory representatives to negotiate. The legal ground they use in support of their complaints is case law by the Supreme Court according to which the representative capacity of the workers’ statutory representatives chosen by one or some of the workplaces of the company is limited to the specific area for which they were chosen.

This case law has been bolstered by the judgement by the Labor Chamber of the Supreme Court, of June 10, 2015, according to which the principle of correspondence should also extend to workplaces incorporated after the execution of the collective labor agreement.

The productive and organizational characteristics of outsourcing companies makes them particularly sensitive to the above case law, since there can be as many workplaces as services they provide to their clients. Moreover, it is clear that the structure of workplaces/services of an outsourcing company is extremely volatile, and services that have participated in the negotiation of the agreement may be lost while others that have not done so, may in turn be gained.

As a result of the above-mentioned Supreme Court case law, the vast majority of complaints contesting collective labor agreements of companies in the outsourcing industry are being upheld.

A possible solution to the lack of standing of the workers’ statutory representatives in these cases is to negotiate the collective labor agreement directly with the union organizations or through their branches at the company, pursuant to article 87.1 of the Workers’ Statute. However, this would require acceptance by all the parties involved in  the negotiation, and their interests do not always coincide, so perhaps the time has come to give some thought to the opportunities involved in negotiating and approving an industry collective labor agreement for multiservice outsourcing companies.

Óscar Alcuña

Garrigues Labor and Employment Law Department