Spain: Social partners sign three-year framework agreement

Spain's main trade unions and employers' organisations signed a framework agreement in February 2010 providing guidelines for company- and sector-level collective bargaining over 2010-12. The deal provides for wage moderation and measures to maintain and create jobs, while reducing the high level of temporary employment.

On this page:
Central bargaining resumed
Pay guidelines
Employment
Flexibility
Restructuring
Other issues
Reactions to agreement.

Central bargaining resumed

Every year from 2002 to 2008, the main social partner organisations - the CCOO and UGT trade union confederations and the CEOE and CEPYME employers' organisations - signed a national framework agreement. These accords set out guidelines for collective bargaining at sector and company level on pay and other issues. They were widely regarded as having contributed over this period to the maintenance and creation of employment and to moderate pay growth, while ensuring that workers' purchasing power was sustained.

With the economy entering a deep recession in late 2008, the social partners were unable to reach a framework agreement for 2009, mainly because of disagreements over the recommended pay increase. The lack of a national framework contributed to a difficult bargaining round in 2009, with negotiations over many collective agreements deadlocked or delayed, and disputes about the payment of wage increases due in 2009 under agreements signed in previous years. However, in November the social partners agreed a joint approach to resolving the problems that were affecting bargaining. This opened the way for them to negotiate over a medium-term national framework agreement for 2010-12, as proposed by the trade unions.

On 9 February 2010, CCOO, UGT, CEOE and CEPYME signed an "agreement for employment and collective bargaining", covering 2010, 2011 and 2012. It sets out recommendations for lower-level bargaining and aims to: help the Spanish economy address its current problems; improve competitiveness and employment; and generate confidence, so as to increase levels of consumption and investment. With the unemployment rate standing at 19.5% in December 2009, the agreement states that maintenance and creation of jobs should be the top priority of collective bargaining. At the same time, bargaining should seek to promote employment on open-ended contracts and reduce the high level of temporary employment (nearly 30% of Spanish employees have a fixed-term contract, more than twice the EU average rate). The social partners say that they want to create stable employment though a "balanced distribution of efforts between employees and employers".

Pay guidelines

In the present economic situation, the social partners want to encourage a policy of moderate pay growth which will allow jobs to be saved and created, while contributing to economic recovery. They therefore recommend pay increase guidelines of:

• up to 1% in 2010;
• between 1% and 2% in 2011; and
• between 1.5% and 2.5% in 2012.

Within these guidelines, pay increases should take into account the specific circumstances of each sector and company.

The central accord recommends that collective agreements should include a "wage revision clause" (cláusula de revisión salarial), whereby, at the end of the three-year period, employees will receive additional payments to make up for any gap between their collectively agreed pay increase and inflation over 2010-12. This represents a change from normal practice: wage revision clauses normally provide for payments to cover any difference between predicted and actual inflation during the term of a collective agreement.

The social partners also recommend that, given the aim of maintaining employment and the financial difficulties faced by many companies, sectoral agreements should contain a "derogation clause" (cláusula de inaplicación). This would allow companies not to award pay increases agreed at sector level, if doing so would damage their financial stability. Sectoral agreements should lay down a procedure for granting such exemptions, with companies required to give economic reasons for their request and make commitments on employment and a future return to application of the sectoral agreement. Requests should be assessed by the signatories of the sectoral agreement, with any disputes being referred to mediation or arbitration.

Employment

The framework recommends that collective agreements at sector and company level should:

• promote recruitment on open-ended employment contracts, the conversion of temporary contracts into open-ended ones, employment preservation and equal opportunities;
• encourage the appropriate use of contractual arrangements, so that companies' permanent staffing needs are met with open-ended contracts, and that only variable needs are met with fixed-term contracts and temporary agency workers;
• introduce measures to prevent the unjustified use of successive fixed-term contracts;
• where possible and desirable, lay down the maximum proportion of the workforce that can be employed on a temporary basis;
• promote the employment of young people, using training contracts as a means of integrating them into the labour market and improving their skills, and encouraging their recruitment by the company concerned on the completion of training;
• encourage the use of "fixed-discontinuous" contracts (open-ended contracts to perform intermittent or cyclical work) in areas where these are appropriate, and of open-ended part-time contracts as an alternative to temporary employment or overtime working;
• use partial retirement and "handover contracts" (whereby older workers switch to part-time work and unemployed people are recruited to fill their remaining hours) as a means of maintaining employment levels and "rejuvenating" the workforce; and
• at sector level, create monitoring mechanisms to examine the development of employment and the achievement of objectives in this area.

Flexibility

The social partners stress that workforce flexibility can preserve jobs and boost companies' productivity, and that it is better to respond to change through internal flexibility (that is, adapting the roles, skills and work organisation of the current employees) than through adjusting the size of the workforce. The framework states that collective agreements can contribute to such flexibility by introducing job classification systems based on broad groups of jobs and "functional areas" rather than specific positions. These systems could use as a reference the skill levels defined in Spain's national qualifications system and the EU's European Qualifications Framework. Agreements should also promote functional flexibility (along with the necessary training) and deal with changes in work organisation arising from technological change.

On working time, the agreement promotes bargaining on flexibility, aimed at better reconciling the needs of companies and of employees. Relevant measures include annualised hours, the flexible distribution of weekly hours, and flexitime.

The accord sets out a number of principles in relation to teleworking, which it describes as a means of modernising work organisation. Moving to telework should be voluntary and reversible for both the employee and employer. Teleworkers should have the same rights as comparable employees working on the company's premises. Collective agreements should regulate matters such as health and safety, equipment, training, privacy and confidentiality

Restructuring

The framework promotes an approach to company restructuring based on the anticipation of its employment consequences and transparent dialogue with workers' representatives. Change and the reasons for it should be explained fully and in a timely way to employees and their representatives. Companies should seek to anticipate future restructuring and pursue forward-looking employability policies for their staff. When restructuring occurs, alternatives to job losses should be explored, such as:

• internal and external redeployment;
• training and reskilling;
• retirement;
• help for redundant workers to set up their own business; and
• personalised guidance and support for employees.

Where workforce adjustments are necessary because of the economic situation, short-time working and temporary lay-offs should be used before companies move to make redundancies.

The accord promotes the establishment of joint employer-union "observatories" at sector level to analyse future prospects in areas such as employment, training needs, market developments, international competition, environmental issues, productivity and technological change. These analyses can help to anticipate and manage structural change.

Other issues

The accord lays down a number of principles relating to subcontracting and outsourcing, calling for collective agreements to deal with matters such as information and consultation, health and safety, and workers' representation.

The framework stresses the importance of vocational training and skills development, especially during the economic downturn, in improving companies' ability to adapt and workers' employability. Collective bargaining at sector and company level should address issues such as: training for priority groups, for example low-skilled workers; training leave; accreditation of occupational skills; and links between training and employee mobility, job classification, promotion and career planning.

The signatories will, in the six months after the signature of the agreement, hold national-level negotiations over a possible reform of the collective bargaining system, focusing on a better coordination and articulation of the various levels of bargaining.

Reactions to agreement

The Prime Minister, José Luis Rodríguez Zapatero, congratulated the social partners on reaching an agreement that will "bring stability, security and confidence for companies and workers, and help with recovery". The minister of labour and immigration, Celestino Corbacho, commented that the accord establishes "the preconditions that are needed to generate employment in Spain".

The CEOE employers' organisation underlined the importance of the agreement in building confidence among companies and the wider public, and in "meeting the objective of wage moderation at a time when firms are faring badly". It stated that the accord will improve national and company competitiveness and promote job creation, and represents "an exercise in responsibility" by the social partners.

The unions also stressed the role of the agreement in providing stability and building confidence, and emphasised that its main priority is protecting and creating jobs. UGT stated that the agreement proves that: "it is possible to work and fight together against the economic crisis" despite the often competing interests of unions and employers, and sends a "powerful message that we are all rowing together in the direction of fighting against the destruction of jobs and for the economic recovery for our country". For CCOO, the accord provides "a clear signal to the country and the public authorities about the way forward to overcome the crisis".

The framework agreement should now guide the negotiation of agreements at company and sector level over the 2010-12 period in the private sector. In 2008, according to Ministry of Labour statistics, there were more than 5,600 collective agreements in force in Spain, of which around 4,200 were single-employer agreements and 1,400 multi-employer agreements (mainly sectoral agreements signed at provincial or national level). In total, the agreements covered over 11.5 million workers.

This article was written by Mark Carley, European editor.

European employment policy, practice and law, March 2010