The problem of collective bargaining at company level
The 2012 labor reform (instrumented successively around Royal Decree-Law 3/2012, of February 3, 2012, and Law 3/2012, of July 6, 2012) modified various aspects of the existing regulations on collective bargaining, with a view to making the collective labor agreement a tool that truly favors a company’s competitiveness and enables it to adapt to market demands.
This objective was to be attained with measures aimed in two different directions:
- The first granted a more important role to the company’s own collective labor agreement within the system of sources of an employment relationship, thus continuing along the path already taken in 2011.
- The second gave greater authority to the agreement between employer and employee, with a view to bringing industry-wide labor provisions into line with the real situation existing at companies, by way of (inter alia) a very new regulation on opting out of or not applying the collective labor agreement.
These measures shifted the focus of collective bargaining to the company itself and, as a result, collective labor agreements began to appear at companies at which collective bargaining had not existed until that time, or had been limited merely to annual agreements on salary increase.
Nonetheless, the extension of collective bargaining to new areas or bargaining units where it had previously been nonexistent has given rise to numerous legal disputes caused, on many occasions, by the fact that the collective labor agreement is not in line with the other legal provisions of the system. Please note the following two examples:
- The scope of the collective labor agreement is not consistent with the standing of the bargaining parties.
There have been various cases in which the labor courts and tribunals have ruled on the validity (or rather, invalidity) of collective labor agreements whose scope was to be extended to the company as a whole, deeming them to be invalid because they had been negotiated by representatives of only one workplace (even if it were the largest) or with ad hoc employee committees.
As already mentioned, the rulings issued in this connection rendered radically void any collective labor agreement that fell under this category of defect.
Especially significant is the fact that such rulings dismiss the possibility of such agreements being reclassified as collective labor agreements for the workplace to which the representatives who executed them belong, or as agreements or clauses not based on the Workers’ Statute (e.g., judgment of the National Appellate Court of November 25, 2015, proceeding 281/2015).
- The compensation systems established are inferior to those stipulated (and already in force) in the industry-wide collective labor agreement.
The labor courts and tribunals have also dismissed the validity and enforceability of agreements reached at company level, where they entail a reduction in the salaries already payable pursuant to another collective labor agreement in force and applicable to the same bargaining unit.
In this way, by virtue of the principle of the non-retroactive nature of legal provisions that restrict rights or are less favorable, any provisions retroactively imposing lower salaries than those provided for in the industry-wide collective labor agreement in force, have been declared unlawful (e.g., judgment of the National Appellate Court of April 22, 2014, AS 2014\1287).
Rulings such as those described above are usually followed by an indeterminate number of complaints filed by the affected workers, claiming satisfaction of the economic consequences inherent in all declarations of total or partial voidness of a collective labor agreement (i.e., differences in salary, longer working hours, etc.).
In this context, a thorough legal analysis of the aspects put forth in the collective bargaining is shown to be the only effective way to prevent the collective labor agreement from ceasing to be an element used to favor a company’s competitiveness and becoming an obstacle to such competitiveness, adding a significant dose of legal uncertainty and complexity to employment relationships at company level.
Garrigues Labor and Employment Law Department