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What should we know about collective labour agreements?

Analysis published in Consulting Review magazine

The collective labour contract represents an agreement concluded in a written form on one hand between the employer and on the other by the employees, through their assigned representatives or where there is the case, by unions. In this agreement there are established clauses concerning working conditions, remuneration, as well as other rights and obligations resulted from labour relations. All companies that have at least 21 employees are obliged by Labour Code (Law 53/2003, republished) to conclude collective labour agreements.

Due to the high importance a collective labour agreement has for every organisation, assuring constancy in working relations between employers and employees, my advice is to make sure you are in a state of preparedness for this document, and in this way you will not conclude it under time pressure once you have reached the legal number of employees.

There are a series of facts we must be aware of when closing a collective labour agreement, such as: contract's duration, working conditions, remuneration conditions, and beginning and ending of labour relationships. At the conclusion of a collective labour agreement we must take into consideration a series of governmental decrees, mostly the Law 53/2003 republished (Labour Code), Law 30/1996 republished (The Law of Collective Labour Contracts), Collective Labour Contract on National Level and Collective Labour Contract on a Branch Level, when it exists.

Further, I will try to emphasize a few elements connected with the main clauses of the collective labour agreements.

Firstly, the collective labour agreements concluded according to the legal provisions are considered the law of the parties. Nevertheless, collective labour agreements could not contain clauses that could establish rights below the level established through collective labour agreements concluded on a superior level. Meantime the individual labour contracts could not include clauses that will establish rights at an inferior level comparing with that established through collective labour agreements. This is why the granted rights from collective labour agreements must be placed at an intermediate level between individual labour contracts and collective labour agreements settled at branch level or at national economy's level.

The stipulations of collective labour agreement have effects on all employees, no matter of the hiring date or their affiliation to a trade union.

According to the law, the collective labour agreement is concluded for a determined period of time that cannot be shorter than 12 months. Because of these provisions most of the companies choose a period equal with the minimum period, meaning one year. My personal point of view is that concluding a collective labour agreement for a longer period, accordingly 2 or 3 years, is more advantageous for the company, because a longer period will ensure a more stable environment for a longer term; this also absolves the company from the time consummated each year by both managers and employees' representatives running the collective negotiations. Nonetheless, according to law, the collective labour agreement's clauses could be altered on its execution every time the parts agree this fact, under condition of fulfilling the communication formalities foreseen by the Law of Collective Labour Contracts (Law 30/1996). Well, concluding the collective labour contract for a longer period of time does not hinder parts to improve it each time is considered to be adequate by both parties, but meanwhile does not oblige the parts to a yearly revise in case at least one of them does not consider it necessary.

Another important element in what concerns the labour collective agreement is their form. There is a tendency within many companies to include a large volume of information in order to fill the gaps for employees regarding the actual legislation. In other words, in many cases the companies decide to include within the collective agreement articles from various governmental decrees in aria of labour legislation to make them known to all employees. I believe this approach is wrong from many reasons:

  • Firstly, the collective labour agreement must be a thin document, containing less useless information. This will give the chance both the employees and the employer to have more clearness, respectively to easily operate with the collective labour agreement every time is necessary.
  • Secondly, the labour code provisions are anyway mandatory so we do not see any reason for including them again within the collective labour agreements.
  • Thirdly, including some existing law provisions within the collective labour agreements could not be an inspired choice for the employer, because in some cases the labour legislation alters in employee's favour. But in those cases, if that provision is included in the company's collective labour agreement, this will remain a law for the parts and the employer will not benefit of the favourable changes from the legislation.

And nevertheless, collective labour agreements must correspond to the internal regulation of the companies, in order to avoid contradictions or settlement gaps. Therefore I strongly recommend you to include in the internal regulation a series of disciplinary rules, internal organization and working schedule, also motivation modalities, and avoiding their appearance in the collective labour agreement. One reason for which I believe the employer should keep certain rules within the internal regulation is that this one is a much more flexible document comparing to collective labour agreement. Moreover, I strongly recommend the avoidance of certain clauses in both documents, because in such case, an alteration will lead to both documents changing and in the same time their renegotiation; and such way also the number of legal formalities that must be accomplished and announced will be double.

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