Collective Bargaining Agreements

Spanish Supreme Court issues a Judgement on validity and scope of application of a Collective Bargaining Agreement

Many companies took advantage of the labour reform of 2013, prioritising Company agreements over Sectoral ones, to avoid the application of the correspondence principle in Labour Law (which orders that an Agreement can only be applied to workplaces where the negotiators are represented) and impose less favourable conditions on workers at all of their workplaces, having only negotiated with those at the main site, which in many cases were “yellow unions”.

Recently, the Supreme Court declared null and void a subsection of a Collective Bargaining Agreement that sought to apply said Agreement to all of a company’s workplaces, when it had only negotiated with one of them. However, the same Sentence clarifies that the Collective Bargaining Agreement is valid within the scope of representation in which it was negotiated, i.e. it is applicable to workplaces whose representatives participated in the negotiation.

This Judgement has come shortly after the Supreme Court clarified that in order to file a claim against a Collective Bargaining Agreement there is no need to possess the necessary legitimation to negotiate a new one.

A business transfer does not in itself justify a change to working conditions.

Sentence no. 130/2014 of 14 July from Spain’s National High Court.

 Council Directive 77/187/EEC is intended to guarantee the safeguarding of employees’ rights in the event of a change of business owner, allowing them to remain at the service of the new owner under the same conditions agreed on with the assignor.

Starting from the inexorable rule that a business transfer (sale of a branch of activity, merger, etc.) can never in itself justify changing the contractual and conventional conditions the assigned employees enjoyed, the only interpretation that can be given to art. 44.9 of Spain’s Statute on Workers’ Rights (Estatuto de Trabajadores), like art. 7 of the Directive, is that the provisions contained therein refer to the duty to inform and negotiate any possible modifications which, due to a transfer, could affect the employees of the assignor or the assignee, other than the group of assigned workers; i.e., those who, pertaining to the assignor and as a result of the transfer of part of the business, could for this reason face changes to their working conditions as they no longer perform the assigned part of the business activity and those who, pertaining to the assignor and as a result of the transfer could also face changes to their conditions due to taking on a new business activity and the incorporation of assigned personnel.