Nowadays, it is common for companies engaged in multiple activities to contemplate which collective bargaining agreement should govern their labour relations. The question arises regarding the feasibility of implementing distinct agreements for each one of the activities or a unique collective agreement across the entire company.
Rules to determine a Collective Agreement in Spain
First and foremost, one must consider the laws governing the determination of the applicable collective agreement, which depend on the primary activity of the company:
- Single activity
- Several independent and autonomous activities
- Several activities where one stands out as the main activity, and the others depend on it.
Criteria and Case Law: The Principle of Unity of Undertaking
Given the absence of substantive regulation by the Spanish legislator on this matter, significant interpretative challenges have arisen regarding the treatment of diverse activities that may be subject to different collective agreements. The National Consultative Commission for Collective Agreements has established the criterion of the principle of unity of enterprise or main activity criterion, focusing on the activity with the highest turnover. This criterion was subsequently endorsed by the Supreme Court (STS 1068/20001 of 29 January 2002).
However, the high court has also declared that, in exceptional cases, it is possible to apply different agreements within a company with various activities that could fall under different scopes of application of distinct agreements. This assertion remains valid as long as there is no dominant activity and the activities are conducted with diverse organizational structures across different work centres (STS 191/2004, dated June 15, 2005).
To determine the company’s main activity, one must consider the number of employees engaged in each activity and the involvement of various subcontractors in the company’s different activities. It is important to note that a change in the main activity would necessitate a corresponding change in the applicable agreement if there is another more specific covering the new functional scope.
Currently, there are several criteria for determining the main activity of the company, which can be summarized as follows:
- The corporate purpose as defined in the company’s articles of association
- The company’s turnover
- The activity outlined in the company’s various contracts with its clients (irrespective of the significance of the activity and turnover).
Exceptions: Special Cases and Flexibility to Apply Several Conventions
Another scenario to consider involves companies with multiple activities lacking clear predominance. In such cases, it is feasible to implement separate collective agreements for each activity, always ensuring adherence to the respective one in each case.
In conclusion, when determining and applying the collective agreement, consideration must be given to the primary activity or the one with the highest turnover within the company. The jurisprudence established by the Spanish Supreme Court is unequivocal and has consistently reaffirmed it in various rulings.
Eduardo De Sousa Gama
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