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Which workers will benefit from Spain's newly agreed pay rise?

Conor Faulkner
Conor Faulkner - [email protected]
Which workers will benefit from Spain's newly agreed pay rise?
Spanish union Comisiones Obreras (CCOO) leader Ignacio Fernandez Toxo (L) and Union General de Trabajadores (UGT) leader Pepe Alvarez speak to journalists in Madrid in 2017. Photo: PIERRE-PHILIPPE MARCOU/AFP.

Spanish trade unions and business leaders have reached an agreement on a pay rise after a year of choppy negotiations. Here's what you need to know about it, who benefits, by how much, and what else the wide-ranging deal includes.


Following a year of stalled negotiations, Spanish trade unions finally came to an agreement with employers for a 10 percent salary increase spread over three years.

On Wednesday 10th May, the two main Spanish unions, CC.OO and UGT, signed the V Employment and Collective Bargaining Agreement (AENC) with CEOE, a body similar the Spanish CBI, and Cepyme, Spain's small and medium-sized business confederation.

The main thrust of the deal is a much needed pay rise to strengthen Spaniards' purchasing power amid the ongoing inflationary crisis. According to OECD figures reported by Onda Cero, Spaniards have lost the most purchasing power in the European Union. 

READ ALSO: How Spain's cost of living increase is worse than in France and Germany

But alongside the eye-grabbing pay rise, the broad agreement also introduces a salary review clause to monitor inflation and spending power, establishes a right to 'digital disconnection' and flexible retirement arrangements, deals with occupational leave and psychological care, and promotes greater diversity and equality within the workforce.

The increased salaries, something that will benefit millions of Spaniards, has been claimed as a victory for unions, but the agreement has also been praised by employers for taking steps to improve the stability of the labour market more broadly.


President of the CEOE, Antonio Garamendi, hailed the deal, claiming that it serves to benefit both companies and workers: "It is not against anyone, it is in favour of everyone. It's in favour of Spain, which is why and what we work for."


Who does it affect?

This pay rise will benefit workers in the Spanish labour market who are covered under a collective bargaining agreement, more than 10 million people and over 50 percent of Spanish workers, according to reports in the Spanish press.

Most contract workers in Spain can find out if they're part of what's called a convenio colectivo in Spanish by looking at their contracts.

In principle the agreement calls for pay rises across all sectors of the Spanish economy, but the text contains guidelines that can adapted on a sector by sector or even company by company basis. The agreed pay rises and structures are particularly focused on sectors with unequal growth, poor implementation of Spain's interprofessional minimum wage (SMI), and constructed with the aim of maintaining employment and boosting job creation.

However, it should be noted that the agreement is guide for employers and unions and is not, technically speaking, mandatory. The agreement therefore does not guarantee a salary increase for all workers.


How much is pay going up?

Salaries will rise by at least 10 percent in the next three years. According to the text of the agreement, which you can read here, the increase will staggered over three years: a 4 percent rise  in 2023, 3 percent in 2024, and another 3 percent in 2025. 

When is the pay rise?

The agreement will be valid for three years, from 2023 to 2025. The text of the agreement stipulates the the negotiating parties will meet at least three months before the end of 2025 to begin negotiating a collective bargaining arrangement and review pay.

What if inflation rises again?

The agreement also includes salary review clause that could see annual pay rises topped up by an additional 1 percent depending on the inflationary situation in the country in the future. If inflation rises again above a certain point, the review clause means that salaries must be adjusted to reflect that change.

What is the right to 'digital disconnection'?

Away from payrolls, the agreement also establishes the right to 'digital disconnection' - that is, according to the text, "the limitation of the use of new technologies outside the specific working day to guarantee rest time, public holidays and holidays for workers."

This adaption to the modern working environment, particularly in the very online, flexible, post-pandemic world, aims to "contribute to health, especially in terms of technological stress."

The agreement establishes tech boundaries, meaning that workers should not obliged to respond to messages, calls or emails outside of their contracted working hours. Automatic out of office responses are established as good practice and the use "delayed" sending so that communications arrive within working hours are encouraged.


How does it make work more flexible?

There is also an emphasis on establishing 'internal flexibility' in sectoral and company working arrangements "as a tool to facilitate the competitive adaptation of companies and to maintain employment, its stability and quality and productive activity, with an appropriate balance between flexibility for companies and security for workers."

What does it say about occupational leave and psychological health?

The text also deals with health and safety in the workplace, establishing joint procedures for long-term occupational leave and temporary incapacity leave, including therapeutic treatments and rehabilitation, and to study the causes, frequency and duration, while aiming to reduce the number of processes and their duration overall.

Have retirement terms changed?

It also bolsters access to partial retirement through 'relief contracts', and will promote mechanisms for its implementation. Likewise, flexible retirement formulas have been agreed to facilitate the transition from the working world into retirement.

What does it do to promote diversity and equality in the workplace?

The text emphasises "the need to promote real equality between women and men in employment" with measures to promote the hiring of women, especially in positions and sectors where they are underrepresented. It also promotes the inclusion of members of the workforce with disabilities, the LGBTI community, and victims of sexual and gender-based violence.


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