Collective accords to be extended while talks go on

Labor unions and business organizations have reached a preliminary agreement under which company collective bargaining accords that have not been renewed will be extended if negotiations on their renewal hold out the prospect of prospering.

The agreement removes the threat of some 2.5 million workers whose collective accords have expired seeing the conditions of their salaries, working hours, professional category and disciplinary framework left in limbo after July 7.

The pre-accord was reached in negotiations held on Tuesday by the country’s two main unions — CCOO and UGT — and leading employer groups, the Spanish Confederation of Business Organizations (CEOE) and the Spanish Confederation of Small and Midsized Enterprises (CEPYME). It now needs to be ratified by the boards of the four organizations. Sources close to the talks said they expect a final agreement to be signed on Thursday.

The reform of Spain’s labor laws introduced in February of last year by the conservative government of Prime Minister Mariano Rajoy eliminated the indefinite extension of existing collective agreements in the absence of an accord on their renewal. The new law now limits the amount of time an expired collective agreement can remain effective to one year as from July 7 of last year when the reform came into effect.

In the absence of an accord, thereafter, employers and workers will be subject to the working conditions of the sector in which the company operates and in the ultimate instance by the Workers Statute. Company collective agreements normally include working conditions that are more favorable than sector rules and the statutory minimums.

In the event of negotiations on the renewal of collective agreements failing to prosper by July 7, companies and labor unions agreed to tap available avenues for arbitration.