The Spanish National Court rules on the application of the wage guarantee clause of the collective bargaining agreement for the chemical industry should be applied
Published on 29th Jul 2024
The agreements establish wage increases in excess of 10% linked to wage guarantee clauses
The general collective bargaining agreement for the chemical industry and the state agreement for the sector of wholesalers and importers of industrial chemical products and drugstore, perfumery and related products establish the obligation to apply a salary increase of 10.3% and 10.7% respectively.
Wage guarantee clause in the collective bargaining agreements
Both collective bargaining agreements include a wage guarantee clause that links the employees' salaries to the Consumer Price Index increases during the term of the agreement. Thus, from 1 January 2024, salaries must be increased by the same percentage as the sum of the annual variation of the CPI for the years 2021, 2022 and 2023.
The sum of the percentages for these years exceeds by more than double the sum of the conventional increases for the years 2021 to 2023, which reaches 10.3% in the chemical industry agreement and 10.7% for the agreement for the sector of wholesalers and importers of industrial chemical products and drugstore, perfumery and related products.
What wage items would be affected by the salary guarantee clause?
Article 38 of the chemical industry agreement and article 53 of the agreement for the sector of wholesalers and importers of industrial chemical products and drugstore, perfumery and related products establish that the salary revision derived from the salary guarantee clause is applied to the gross salary of each company. This wage bill includes, in addition to the base salary, other items such as the collective bargaining agreement bonus and personal allowance.
What happens to new hires made during the term of the collective bargaining agreements?
The agreements do not specify what happens in these cases, which is why this issue has been debated before the Social Courts.
The National Court, in judgment No. 69/2024, dated June 17, 2024, has ruled on the application of this clause with respect to the chemical industry agreement, and has obliged companies in the chemical sector to apply a 10.3% wage increase to all employees hired by the company on December 31, 2023, without any distinction based on their date of entry into the company.
The ruling rejected the employer's interpretation suggesting a double salary scale, which lacks objective justification and contradicts the prohibition of compensation and absorption contemplated in the same article.
Osborne Clarke comment
The non-application of wage increases agreed in collective bargaining agreements entails significant risks, so it is essential to evaluate the specific circumstances of each case in order to ensure compliance with current regulations.
