Effects of the labour reform in the field of collective bargaining

Royal Decree-Law 32/2021 of 28 December (the "Labour Reform") has modified part of the innovations included in the 2012 reform in the area of collective bargaining, introducing changes in two fundamental aspects:

Changes to the priority of application of the company agreement

Firstly, Article 84.2 of the Workers' Statute (the "WS") is amended, which contains the list of matters in respect of which the Company Agreement has priority over the Sectoral Collective Bargaining Agreement. Specifically, the amendments are as follows:

1. The "amount of basic salary and salary supplements, including those linked to the company's situation and results" is removed from the list.
2. The term "co-responsibility" is introduced, within the scope of the priority application of company agreements in "measures to promote co-responsibility and reconciliation between work, family and personal life".

Consequently, the scope of the change made is reduced, in practice, to the impossibility for the Company Agreement, during the validity of the Sectoral Agreement, to establish salaries lower than those established in the latter.

On the other hand, the priority of application of the Company Agreement is maintained in the rest of the matters listed in Article 84.2 WS, which are the following:

1. Payment or compensation for overtime and specific pay for shift work.
2. The schedule and distribution of working time, shift work and annual holiday planning.
3. The adaptation of the occupational classification system for workers to the company level.
4. The adaptation of the aspects of the modalities of contracting that are attributed by this law to company agreements.
5. Measures to promote co-responsibility and the reconciliation of work, family and personal life.
6. Any others provided for in interprofessional agreements and sectoral collective bargaining agreements.

The above amendments shall not apply to Company Agreements signed and submitted for registration or published prior to 31 December 2021, until they expressly cease to be in force, or at the latest, until 31 December 2022. A period of 6 months is granted, from the time the amendments become applicable in each case, to adapt the text of the agreement to the aforementioned amendments.

In addition, it should be noted that there are matters for the development of which the WS refers exclusively to the Sectoral Agreement, leaving the Company Agreement aside. Among other issues, it is left to the Sectoral Agreements to determine the possibility of concluding permanent-discontinuous part-time contracts; to determine the duration, within the legal limits, of training contracts for obtaining professional practice appropriate to the level of studies (Article 11.3.c) of the WS) or the possible extension of the maximum duration of 6 months of the contract  due to unforeseeable production circumstances provided for by law (article 15.2 of the WS).

Amendments to the validity of collective agreements

The other major novelty introduced by the Labour Reform affects the regime for the validity of agreements, a regime which, unlike that referred to in the previous section, has come into force immediately, affecting all agreements, regardless of their date of signature and loss of validity.

The Labour Reform maintains:

1. The general and priority rule is to abide by what was agreed by the negotiators in the text of the agreement. In other words, if the negotiators agreed on what will happen when the agreement loses its initial validity, what they established must be respected.
2. The extension mechanism, which will be applied in the same terms as before: tacit annual extension, unless otherwise agreed, if the agreement is not denounced at the end of its agreed term.

The changes affect the negotiation situations of denounced agreements, in particular, it is established:

1. That, if one year has passed since the denunciation without a new one having been signed, the negotiating parties must try to overcome the deadlock by submitting to the mediation procedures regulated in the interprofessional agreements at state or autonomous community level;
2. It is also foreseen that the parties may submit to an arbitration procedure regulated in these interprofessional agreements, but only if there is an express agreement to this effect;
3. In any case, and this is the most important change, "when the bargaining process has elapsed without an agreement having been reached, the collective agreement will remain in force", i.e. it returns to unlimited ultra-activity, with the provisions of the agreement remaining in force with the sole exception of those relating to the maintenance of social peace.