A major new change brought by the 2012 labor reform was the principle that companywide collective labor agreements take priority over sectoral collective labor agreements in matters such as wages, compensation for overtime, timetable and distribution of working time, shift work arrangements, vacation planning, etc.; in other words, the most important working conditions for both employers and workers.
The new legislation implies that every companywide collective labor agreement regulating those matters will apply with priority over a sectoral collective agreement, even if it was negotiated while a collective agreement with a broader scope was in force. This provision, however, -which in judgment number 119/2014, of July 16, 2014 number 119/2014, of July 16, 2014, the Constitutional Court held compatible with the right to collective bargaining, to the binding force of collective labor agreements and to the freedom of association of labor unions– has its limits, as we shall see.
Although legal arguments were used initially to argue that the same priority for application should be given to collective labor agreements for workplaces or those with a narrower scope, the Supreme Court (Labor Chamber) recently rendered a judgment determining that collective labor agreements with a narrower scope than the company –for a workplace or within the scope of a given autonomous community –do not take priority for application under article 84.2 of the Workers’ Statute.
In this judgment, rendered on September 22, 2016, rendered on September 22, 2016, the Supreme Court, after examining a collective labor agreement signed by a company –present in a number of autonomous communities – and applying only to the company’s workers in the Madrid autonomous community, held that it proved impossible to affirm that the collective labor agreement may be deemed a “companywide” collective labor agreement because its scope is clearly narrower than the employment relationships of the company as a whole. It went on to conclude that what we have here, therefore, is a collective labor agreement with a narrower scope than a companywide agreement, in relation to which it cannot be found to take priority for application under article 84.2 of the Workers’ Statute, which is only imposed for companywide collective labor agreements or collective labor agreements for a group or related companies.
The practical consequence of the interpretation explained above is clear: any rules or working conditions in collective labor agreements with a narrower scope than the company (such as those for workplaces of companies having other workplaces) which depart from the conditions in the sectoral collective labor agreement will not be enforceable, and in these cases, the rules in the sectoral collective labor agreement will apply.
Before signing off, this article would not be complete without mentioning that one of the main demands of the labor unions for this term of government is to recover the independence and prevalence of sectoral collective labor agreements with respect to company collective labor agreements, after they were weakened by the 2012 labor reform. So we will have to keep our sights trained on changes in the law.
Garrigues Labor and Employment Law Department
