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The Act 3/2012 on labour reform introduced a number of substantial changes, including a rule on the term and validity of bargaining agreements. As a consequence, the text of article 86.3 of the Workers Statute reads as follows:

“The effectiveness of a collective bargaining agreement after having been denounced and the agreed term exhausted, shall cause effect according to the terms set out in the agreement itself”

(…)

“If no new collective bargaining agreement has been agreed on or no arbitration award has been issued one year after a collective bargaining agreement has ended, it will cease to be in effect, unless otherwise agreed, and a collective bargaining agreement of a higher scope will apply, if such agreement exists”

This provision was apparently intended to end the ultra-activity of collective bargaining agreements, although in practice, it was the object of many modifications and generated conflicts of interpretation. Recently, the Supreme Court raised the question as to whether an ended collective bargaining agreement, which was not renewed more than one year on from the entering into force of law 3/2012, should continue to be in force by operation of the former “ultra- activity” rule.

In a recent judgment dated 22nd December 2014, the Supreme Court understands that generally a wide interpretation should be given and that in fact, there are two ways of interpreting said article:

a)    A ground-breaking interpretation, according to which, once the bargaining agreement has ceased to be in force, the rights and obligations of the parties thereto shall be governed by the law, in such a way that the conditions of employment relations shall be those which existed before the bargaining agreement.

b)    A conservative or protective interpretation, according to which, the rights of the parties should be maintained in spite of the nominal termination of the bargaining agreement.

In spite of 4 dissenting votes against, the Supreme Court opted for the conservative interpretation, so that any right or obligation of the parties upon the termination of the ultra-activity of a collective bargaining agreement, does not disappear as from the moment when said agreement ceases to be in force. That is to say that, in spite of formally ceasing to be in force, its effects are continued into the future. The Supreme Court justifies this decision upon the understanding that the rules of the extinct collective bargaining agreement had already been contractualised from the moment in which the legal-employment relationship was created, and which evolved with time as from that moment.

Furthermore, it argued that the ground- breaking theory would cause undesirable effects, given that fundamental issues such as working hours, working days or employee activities would become unregulated. This argument is complemented by the principle of party autonomy, whereby the relationships between company and employee are based upon the employment contract, which in turn is modified over time, amongst other things, by the collective bargaining agreement.

As a consequence, the Court affirms that:

a)    The employment conditions derived from agreements surviving the expiry of the bargaining agreement may only be modified by the procedure set forth in article 41 of the Workers Statue.

b)    The Workers Statute should be applied to new employees starting work with a company, and not the conditions derived from the former collective bargaining agreement, although the latter will apply to those employees already on staff. And that shall be so although the Supreme Court admits that different treatment between employees may lead to discrimination.

In our opinion, the aforementioned judgment may be criticised for various reasons:

a)    It is contrary to the spirit of Act 3/2012 and the legislator’s intentions, which sought to bolster the negotiating process of bargaining agreements and avoid the “petrification of the employment conditions agreed to in the collective bargaining agreement” when agreement upon the renewal of the bargaining agreement is not reached, as expressed in the recitals of said Act.

b)    Also because the Supreme Court has opted for a bipolar interpretation and regressive consequences. Without denying the formal effect of the termination of the bargaining agreements in the term of one year without having reached a renewal agreement, in practice, this interpretation overrides, at base, the tangible effect of the new article 86.3 (in fine) of the Workers Statute, in this way perpetuating the ultra- activity of the bargaining agreement since it gives its content the same characteristics as an employment contract and therefore it shall continue to be binding to the parties.

c)     And finally, because it creates a discriminatory situation among new employees (subject to employment rules) and older ones (benefitted by the expired bargaining agreement), which shall give rise to new conflicts.

For more information, please contact:

Eduardo VILÁ: vila@vila.es

 

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