The Social Chamber of Spain’s National Court annulled 43 agreements that had been signed by multiservice companies on the grounds that they had not be properly negotiated with an appropriate employee representative to render then valid for nationwide application. This marks a victory for the CCOO and UGT unions that criticize the fact that an increasing number of businesses are outsourcing whole sections of their business activities to multiservice companies, which in turn implement less favorable working conditions and pay lower wages than those set out in the collective agreement under which the outsourcing company actually operates. Since the 2012 Labor Code reform this type of outsourcing has become more advantageous for these multiservice providers as they can negotiate their own company level agreements that take precedence over other agreements.
2012 labor reform raised an opportunity. Economics publication Cinco Dias reported on the trade unions’ victory. The issue stems from the 2012 labor reform (c.f. article No. 120435), which affirmed that company level agreements took precedence over branch level agreements whether they be at local, sector, or national level. Thus an opportunity opened up in Spain’s collective negotiations system, which many companies seized in a bid to lower costs without even having to put their own...
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