Cuadro y gráfico N° 1

Moreover, the 2012 reform limited the automatic extension of the terms of collective agreements in the case of failing to conclude a new agreement – i.e. the so-called ultra-actividad or unlimited applicability of collective agreements.148 _{This means that the maximum duration that wage and work-} ing conditions can be enforced after an agreement has expired is now set to one year in the absence of a new agreement, whereas it was previously more or less unlimited. If no agreement can be reached within this period – or no arbitral award issued – workers in question will be covered by a higher-level CBA (if in place).149

The objective of this change was to stimulate the dynamism of collec- tive bargaining, as allowing previously agreed working conditions to stay

146 _{II Acuerdo para el Empleo y la Negociación Colectiva (AENC II); Chapter I: “Structure of collective} bargaining”. AENC II foresaw that sectorial agreements should promote negotiations at the enterprise level on working time, functions and salaries, being the most appropriate level at which to deal with these mat- ters, at the initiative of the affected parties. It further stated that higher-level negotiations should respect the contractual equilibrium of parties at the enterprise level, and that it is necessary to preserve provincial-level negotiations and enable such agreements to promote the flexibility needed to adapt to changing markets and competition, by their proximity to the enterprise, not forgetting that this level of negotiation provides most coverage to enterprises and workers.

147 _{Other countries severely hit by the crisis have introduced similar regulations aiming to promote} enterprise-level bargaining. In Portugal, for example, Law 23/2012 promoted decentralization primarily by allowing workers’ councils to negotiate at the plant level where there is a minimum number of 150 employ- ees, after delegation by a union. In Greece, various legislative acts introduced from 2010 onwards aimed at promoting decentralization. Law 4024/2011 stipulated that CBAs could be concluded at the company level with the so-called “associations of persons”. Company-level agreements were temporarily given precedence over CBAs at a higher level, even when leading to less favourable conditions for the workers (the traditional “favourability principle” in Greek labour law was abolished).

Chapter 4 Building recovery through social dialogue and collective bargaining 156

SPAin: Growth with JoBS

in force almost indefinitely through ultra-actividad created a sort of tem- poral inertia. Parties willing to oppose agreements that altered working conditions (for either party) needed simply to opt for a non-negotiating position to maintain previously agreed conditions in a different economic context. With the limitation in ultra-actividad, parties need to negotiate a new CBA within one year from the expiry of the current agreement. This could promote a quicker renewal of agreements but may also create gaps in CBA regulation in cases where agreements cannot be reached and there is no higher-level agreement in place. The modification entails a change in the previous power balance between trade unions and employers in the negotiating table.

Indeed, the law does not explicitly state what must happen in cases where there is no applicable higher-level agreement to assume the governance of work- ing conditions at the expiry of a CBA.150 _{Legal experts disagree on whether} in these cases the labour law (Estatuto de los Trabajadores) would enter into application, or conditions in the expired CBA would continue to be in force through individual contracts.151 _{This could lead to important downgrading in} working conditions in individual cases, considering that legislation establishes only minimum standards. The new situation places considerable responsibil- ity on the social partners to ensure that coverage gaps in collective bargaining do not emerge in order to avoid a risk of deterioration in working standards. If the partners encounter difficulties in concluding a new agreement, they have the option to extend the applicability of the existing agreement or its specific clauses until a new agreement is reached. Furthermore, they can also use mediation and arbitration in order to reach a conclusion.

150 _{“Once one year has passed from the denouncement of the collective agreement without agreement on} a new one or an arbitral award, it will lose, unless otherwise agreed, its validity and the applicable collective agreement of a higher level, if any, will enter into application.” Unofficial translation, emphasis added. 151 _{Arguments have been presented for a safeguard solution in cases where collective bargaining does not} yield results: “The ultimate parachute” would then open to incorporate the working conditions, including salaries, of the expired CBA into individual employment contracts. This argument maintains that in these cases, the content of collective agreements would automatically be incorporated into individual contracts with binding effect (Jesús Lahera Forteza, Professor in Labour Law at the University of Complutense, in El

País 30 June 2013). Importantly, however, this interpretation has been contested as contrary to the spirit of

the law, which aims to stimulate collective negotiations and thus not to promote a situation similar to that before the reform. Further, it has been contested as opposing various legal principles (López Aniorte, 2012; Navarro Nieto, 2012; Mercader Uguina, 2012; Goerlich Peset, 2013). Case law on the matter has produced divergent results.