One of the major problems that companies face, and especially foreign companies wishing to establish themselves in Spain and hire employees, is identifying the applicable collective agreement.
Before addressing the issue, one must recall Art. 3 of the Legislative Royal Decree 2/2015, dated 23 of October, approving the rewritten text of the Law of the Worker’s Statute (hereinafter ET), that determines that the working relationship is regulated:
- By the legal and regulatory provisions of the State
- By collective agreements
- By virtue of the will of the parties
- By the local and professional customs
In light of the above, is it possible for the parties to freely choose the applicable collective agreement? Despite the fact that the employment relationship can be regulated by the will of the parties, the answer is no. As stated by the High Tribunal of Justice in Aragón, in a ruling dated 12 May 2003 neither the employee cannot dispose of the rights in the Collaborative Agreement — Article 3.5 ET – nor can the employers impose conditions of an agreement differencing in personnel, temporal or territorial scope.
When it comes to determining the applicable collective agreement, the parties, and especially the company, must take into account Art 82.3 ET, which states that the Collective Agreements regulated by this Law obligates all employers and employees included within its scope and for the entire time of its validity. Thus, one must look to the sector or branch of economic activity and productivity of the company to determine which collective agreement would be applicable.
Although the above may seem a simple task, it may raise doubt concerning what will happen with the companies that have more than one activity. In this case, and in accordance with that stated by the Superior Court of Justice of Madrid in a case dated 20 March 2013, which supports the prior declarations of the Superior Court, the applicable agreement is the one that refers to the main activity of the company.
As previously mentioned, when deciding the applicable collective agreement, it becomes essential for a company to look to its principal or leading activity to be developed rather than its corporate purpose or the will of the parties, regardless of the roles its employees can assume.
This article is not considered as legal advice