Spain: New spaces for collective bargainings arising from the labor reform

The labor legislation reform carried out by Royal Decree-Law 32/2021 (I believe "labor legislation reform" is a better expression than the pretentious reference to "the labor reform", given the limited scope of the changes introduced) maintains, in substance, the previous legal regime of collective bargaining. This is, perhaps, the most demonstrative example of the limited nature of the "transformation of the labor market" proclaimed in the title of the Royal Decree-Law. If there is a labor institution in need of revision and updating, it is undoubtedly that of collective bargaining, which is still anchored in a corporate model that mortifies the freedom of negotiation and the autonomy of the subjects of labor relations.

Despite this, the reform of employment contracts opens up new spaces for the institution of collective bargaining, which should not miss the opportunity to explore these and advance in the leading role that it should have within the organization of labor relations. The interventionism  remains, and the legislator's disciplinarian temptation continues to manifest itself, setting regulations that lack a clear justification and invade the playing ground that should be reserved for collective bargaining and individual autonomy. In this regard, a number of questions arise: Why can only one extension be granted for temporary contracts of less than the maximum duration? Why can contracts for occasional but foreseeable circumstances of production of up to ninety days not be used continuously? Why is the maximum suspension period of permanent discontinual contracts three months, although in this case in the absence of an agreement? In substitution contracts, why can the substituted worker and the substitute worker only coincide for fifteen days? Why is temporary hiring in procedures for filling vacancies limited to three months? and why is temporary hiring limited to three months? Nevertheless, notwithstanding any of this, new spaces for collective bargaining are opened up, which, to some extent, entails a backward step in the regulatory development. A system of labor relations that respects collective, above all, but also individual autonomy and contractual freedom, must entrust the development of legal provisions to negotiation rather than to regulatory regulation. In this sense, the new regulations represent a timid step, but nonetheless, a step forward.

Thus, the maximum duration of the contract due to circumstances of production arising from occasional and unforeseeable increases or fluctuations in the company's activity can be extended from six months to twelve months by a sectoral agreement (of any territorial scope). It should probably have been foreseen that company agreements, in the absence of a sectoral agreement, could also proceed to such an extension and perhaps a finalist interpretation of the rule should admit (in the absence, I insist, of a sectoral agreement applicable to the company) the same possibility for company agreements. On the other hand, the maximum period of temporary hiring in procedures for filling vacancies may be reduced, but not extended, by collective bargaining agreement (in this case in any field). But the most important thing is, undoubtedly, that collective bargaining agreements (also of any scope, and therefore including company agreements) may establish plans to reduce temporary employment, establishing, among other matters, criteria for the composition of the workforce, maximum percentages of temporary contracts and objective criteria ("objective", the legislator demands unnecessarily, or distrustfully) for the conversion of temporary contracts into permanent contracts. This could be very important and could open up a different, and potentially more effective, way of reducing temporary employment than that based purely on the imposition of temporary contracts.

The legislator seems to reluctantly accept this new approach, for which public support and an alternative character should have been foreseen, in order to redirect the labor contracting panorama in companies, with respect to the traditional control and sanction procedures. Despite this, an intelligent labor policy should promote these plans to reduce temporary employment (company plans may be more important than sector plans), and should opt for a shared governance of labor relations, in order to lead them to the achievement of the desired objectives, rather than opt for the pretension of changing reality by means of sanctions.

These new areas open to collective bargaining are even more relevant in relation to fixed-term contracts. Thus, sectoral collective bargaining agreements may regulate the maximum period of inactivity between contracts, which, in the absence of such regulation, will be three months. Once again, this again excludes company agreements (which, curiously, are admitted in the cases of specific regulation of fixed-term contracting carried out by temporary employment agencies: first final provision, which modifies Article 10.3 of Law 14/1994), although it should be noted that the regulation established by collective agreements is not conditioned in any way by the supplementary provision contained in the law. The agreements may set a different maximum period and may also provide that there is no time limitation for the period of inactivity between contracts. Only in the absence of an agreement will the aforementioned maximum, and not minimum, period of three months be applicable.

Sectoral agreements may also regulate part-time permanent discontinual contracts, a rule that is difficult to interpret, since there is no legal impediment for permanent discontinual part-time contracts to be concluded on a part-time basis. Discontinuity refers to the duration of the contract and its periods of activity, part-time, on the other hand, to the duration of the working time, so there is no incompatibility between one and the other. The sectoral agreements may also establish a minimum duration of the call and fix an "amount" for the end of the call. The indemnity (the law calls it "amount", probably to avoid classifying the payment as an indemnity) is only applicable if it is agreed in a sectoral agreement (again the perplexity: could it not be agreed in a company agreement?) and if the end of the activity coincides with the end of the call, without there being a new one without interruption. In any case, the compensation will be regulated by the provisions of the collective bargaining agreement that creates it, which will have a wide margin of discretion in this respect. For example, being in principle distinct and independent from the eventual indemnity for termination of the contract, the agreement may agree to its compensation or absorption by the latter, or consider it as "on account" of the latter.

As for the call, the specification of its "objective and formal criteria" is also entrusted to collective bargaining, in this case, to collective bargaining agreements, in any field, and in their absence to company agreements, although certain information duties are imposed on companies.

But the most important change, without a doubt, is the possibility of establishing "sectorial employment pockets", which may be created by the sectorial agreements and into which permanent discontinuous workers may be included during periods of inactivity ("with the aim of favoring their recruitment and continuous training"). There is a wide field of action for the sectorial regulation of these employment exchanges, establishing the training obligations and their financing, the system of calls by the same previous company or by companies other than the company of origin, the specificities of the employment contracts, etc. What is not very understandable is why this same possibility is not open to company agreements.

In short, the reform opens up a wide playing field for collective bargaining, which will be able to specify and condition the application of the new regulatory provisions and which should be an avenue to enhance in successive labor legislation reforms.