Market unity and collective bargaining

Spain - 
Federico Durán López, of counsel at Garrigues Labor and Employment Law Department.

The latest collective bargaining reform aims to give greater prominence to regional and even provincial agreements. However, it does not affect the priority of application of previous agreements over time or the rules relating to company agreements.

One of the tasks of sectoral collective bargaining is to ensure conditions of business competition that prevent the pursuit of competitive advantage based on labor costs. Sectoral collective bargaining, therefore, must refer to the market in which economic activities are carried out and be complemented by company-level bargaining; the structure of collective bargaining should be based on national sectoral agreements and company-level agreements. The prominence of provincial agreements is a legacy of the past and, in most cases, lacks economic logic. The reform introduced by Royal Decree-Law (RDL) 2/2024, however, moves in the opposite direction: it goes against the unity of the market, revalues provincial agreements and calls into question the organizing role of national sectoral agreements. In any case, laws contain objective mandates, beyond the intentions of their promoters, and must be interpreted accordingly. The lack of social dialogue, the absence of intervention by consultative bodies or the suppression (by the clearly abusive use of the decree law in this case) of parliamentary discussion, make the technical invoice of the law very deficient and allow for a corrective interpretation not only of its letter but also of its (political) intention.

The first thing to bear in mind is that the amendment introduced in no way affects the mandate of article 84.1 of the Workers' Statute (WS), which enshrines the priority of application of prior agreements in time (the rule of prior in tempore), and the impossibility of their being affected by subsequent agreements, which remains fully in force. With the nuances that may derive from possible agreements on the structure of collective bargaining (article 83.2 of the ET, to which article 84.1 refers; not 83.3), following the reform of RDL 2/2024, there is still no hierarchy between agreements in Spain. The applicable agreement is the previous one in time, whether it is a company or sectoral agreement with one or other territorial scope, and it cannot be affected by other agreements while it is in force.

The only exception to the rule in Article 84.1 is paragraph 2 ("except as provided for in the following paragraph"), which exempts the application of the general rule by allowing a sectoral agreement to be affected by a company agreement during its term in the matters indicated in the provision itself. Therefore, the sectoral agreements which, under the new rules of Article 84.3 and 84.4, may be concluded are not excluded from the application of the provisions of Article 84.2, and may be affected, during their term, by company agreements in relation to the matters indicated.

Article 84.3 and 84.4 do not derogate from Article 84.1, nor do they exclude the application of Article 84.2.

The regulation in Article 84.3 and 84.4 is related to the provisions of Article 83: "notwithstanding the provisions of the preceding Article". It is stated as a gateway to the new regulation, which is added to Article 83, but without modifying or altering it. Article 83 does not prevent the new regulation being introduced, but it neither alters nor repeals it. The wording is completely different in Article 84.2 and in the new Article 84.3, which means that they are not rules containing equivalent regulations. 84.2 is an exception to 84.1 and 84.3 is an addition to the provisions of Article 83, in the context of which it must be interpreted.

Company agreements are not affected by the new regulation; they continue to be governed by the rules contained in Article 84.1 and the doctrine on succession of agreements and changes in bargaining units must remain in force. Article 84.3 itself refers to the priority of application of collective agreements and interprofessional agreements of the autonomous community over sectoral agreements or state-level agreements. A company agreement in force and with priority of application may not be affected by regional agreements or interprofessional or sectoral agreements concluded by virtue of the provisions of Article 84.3 in relation to Article 83.2 of the TE, nor by provincial agreements with the priority of application of paragraph 4 of Article 84.

Article 84.3 allows collective agreements and interprofessional agreements to be negotiated at the autonomous community level, which will have priority over sectoral agreements or agreements at the state level. These are two different concepts, sectoral agreements and interprofessional agreements, which are covered by two different sections of Article 83.2 of the WS and must therefore be considered separately.

Firstly, (sectoral) collective agreements at the autonomous community level can be negotiated, which will have priority over those at the state level, provided that their regulation is more favorable for employees (assessed as a whole, without the "gleaning" technique). Therefore, these are agreements that improve on the state agreements:

  • They must be at the level of an autonomous community (a single autonomous community).
  • They must be agreements regulating working conditions and not the structure of collective bargaining, in relation to which the more favorable nature of one or other regulation cannot be assessed.
  • Under no circumstances may company agreements with priority of application be affected.
  • In no case may negotiations be held, even for the purpose of improvement, on the conditions expressly excluded by Article 84.5.

Interprofessional agreements (article 84.3 in relation to article 83.2 second paragraph) may also be negotiated at regional level, which, if they are on the structure of collective bargaining, may be applicable, as they were before, at the level of the corresponding Autonomous Community. But if there is a state interprofessional agreement on the structure of collective bargaining, the priority of application of the regional agreement is not clear. Article 84.3 does not explicitly establish it, and the rule that the regional agreement must be more favorable for the employees shows that it is thinking of agreements regulating working conditions, not the structure of collective bargaining. Therefore, it can be argued that state interprofessional agreements on the structure of collective bargaining are not affected and that regional interprofessional agreements do not have priority of application over them.

What sense, then, would there be in mentioning interprofessional agreements in the new Article 84.3? Probably the only meaning is given by its connection with paragraph 4: the regional interprofessional agreements on the structure of collective bargaining may establish the priority of application of provincial agreements (of the corresponding autonomous community) over state sectoral agreements (or supra-provincial agreements), provided that their regulation is more favorable to employees. And this, even if there is no provision in this respect in any interprofessional state agreement that may exist. The structure of collective bargaining established by a state interprofessional agreement cannot, therefore, be altered by a regional interprofessional agreement, with the exception that the latter may enshrine the priority of application of provincial agreements, in the terms of Article 84.4.

In principle, agreements on specific matters (Article 83.3) could be considered to be excluded from the new rules of priority of application of Article 84.3.

83.2 ET. The agreements on specific matters in Article 83.3 are distinguished by the legislator from the interprofessional agreements: "These agreements, (on specific matters) as well as the interprofessional agreements referred to in paragraph 2 (...)". Thus, we are in the presence of two different figures: interprofessional agreements (Article 83.2) and agreements on specific matters (Article 83.3). The new Article 84.3 refers to interprofessional agreements and not to agreements on specific matters. And paragraph 4 refers to agreements within the trade concluded "in accordance with Article 83(2)". Therefore, Article 83.3 has not been affected by the new regulation, and with regard to agreements on specific matters, which may be state or autonomous, the rule of the priority of application of autonomous agreements does not apply.

Finally, provincial agreements "with autonomous community coverage", when provided for in interprofessional agreements of the corresponding autonomous community, will have priority in application over state sectoral agreements, if they are more favorable to employees. The reference to "state agreements" is incorrect and probably unnecessary, but in any case, it must refer to state agreements setting working conditions other than the agreements on specific matters in Article 83.3 of the TE, for the reasons we have already indicated.

This priority of application of provincial agreements does not extend to company agreements, for the reasons already stated, and for the very restriction of the general wording of Article 84.3 to sectoral agreements, in the light of which the subsequent references to agreements must be interpreted. Moreover, the express reference in Article 84.4 to Article 83.2 of the TE, places us within the scope of this provision and leaves aside agreements on specific matters in Article 83.3 which, as we have already indicated, are not affected by the priority of application of regional agreements and agreements introduced by the new regulation of Article 84.3 and 84.4.