A collective agreement is the negotiated agreement between employee representatives and employers that regulates working conditions in a specific sector or company. Knowing which collective agreement applies is fundamental for employers and employees alike, as it determines minimum salaries, maximum working hours, professional categories and many other conditions.
Types of Agreements
There are two broad categories: company agreements, which apply only to workers at a specific company, and sector agreements, which cover all companies and workers in a sector of activity within a specific territorial scope (national, regional, provincial or local).
Sector agreements are further organised by territorial scope: a provincial agreement — negotiated between employer associations and trade unions in a specific province — takes preference over a regional or national agreement when both exist for the same activity, unless the higher-level agreement expressly states otherwise. This rule of concurrent agreements, governed by Article 84 of the Workers’ Statute, is a frequent source of confusion for employers operating across different regions of Spain.
How to Know Which Agreement Applies
The first criterion is whether the company has its own agreement. If one exists, it takes precedence over the sector agreement in matters where the company can improve on sector conditions (salary, working hours, etc.). If no company agreement exists, the sector agreement corresponding to the company’s main activity according to its CNAE code applies.
The 2021 labour reform (Royal Decree-Law 32/2021) amended Article 84 of the Workers’ Statute to restore the primacy of sector agreements over company agreements on pay. This means that, since the reform entered into force, a company-level agreement cannot set salaries below the minimums established in the applicable sector agreement.
CNAE and Principal Activity
The National Code of Economic Activities (CNAE) determines the principal activity. For companies with multiple activities, the principal one is that which generates the highest business volume or employment. The Commercial Register and Social Security have each company’s CNAE on record.
However, the registered CNAE does not always match the actual predominant activity. Companies that have evolved towards new activities, groups with diverse business lines, or multi-site companies with different activities at each location may find themselves in a situation of uncertainty. In these cases, determining the principal activity requires a careful analysis of turnover data, headcount by location and organisational structure.
Where to Find Collective Agreements
Collective agreements are published in the Official State Gazette (BOE) or in regional or provincial official journals, depending on their scope. The Ministry of Labour database allows searching for agreements by sector and province.
The REGCON (Registry of Collective Agreements and Labour Accords) is the official Ministry of Labour tool for consulting agreements in force, their scope of application, the negotiating committee details and the status of negotiations. It is freely accessible online.
Agreement duration and renewal
A collective agreement remains in force until a new one is negotiated to replace it, regardless of whether its agreed duration has expired. Article 86 of the Workers’ Statute establishes that, once an agreement has been formally denounced, its normative provisions remain in force during the negotiation of the next agreement, unless otherwise agreed. This has important practical implications: even when an agreement is formally “expired” but has not been replaced, its pay scales and working conditions remain legally binding.
A worker’s monthly payslip must incorporate the minimum contractual base salary, any agreed supplements (seniority, night work, hazard pay, etc.) and the proportional share of statutory bonus payments. Failure to comply with the minimum salary set by the applicable agreement — even if total remuneration exceeds the national Minimum Interprofessional Wage (SMI) — constitutes a serious labour infringement.
Consequences of applying the wrong agreement
Applying the wrong collective agreement can generate liability in several directions. First, affected workers are entitled to claim back-pay and improved conditions retroactively, subject to the general one-year limitation period for claims arising from the employment contract. Second, the Labour Inspectorate can sanction the employer for serious or very serious infringement of the Workers’ Statute and Royal Legislative Decree 5/2000 (LISOS), with fines that in the most serious cases can reach 187,515 euros. Third, incorrect agreement application can affect Social Security contributions if the resulting contribution base is lower than it should be given correctly calculated salaries.
Professional Categories and Pay Tables
Once the applicable agreement is identified, the next step is correctly assigning professional categories to each employee. Most sector agreements define a classification structure based on job groups and levels, each with an associated minimum salary table. The classification must reflect the actual functions performed, not merely the title given in the contract.
Misclassification — for example, assigning a worker to a lower job group than their actual responsibilities warrant — is treated by the Labour Inspectorate as salary fraud. The practical consequence is that the worker can claim the salary difference and bonus accrual corresponding to the correct category, with interest, for all prior periods within the limitation window.
Pay tables in sector agreements are typically updated annually at the time of agreement renewal or by formula linked to CPI. Employers must track these updates and adjust payroll from the effective date, even if the official BOE publication is delayed.
Working Time: Ordinary Hours, Overtime and Rest
Beyond salary, the applicable collective agreement regulates the annual ordinary working hours, the maximum daily working time, the distribution of hours over the year, and mandatory rest periods. It is common for sector agreements to set lower ordinary hours than the statutory maximum of 1,826 hours per year.
After the entry into force of Royal Decree-Law 2/2019, all companies are required to maintain a daily time-record for each employee, regardless of whether the sector agreement specifies anything on the matter. This record must be retained for four years and made available to the Labour Inspectorate and workers’ representatives on request. Agreements increasingly specify the format and technology requirements for time recording.
Overtime is only lawful if the applicable agreement permits it and the statutory limits are observed (80 hours per year in the general rule). The agreement may establish higher remuneration rates or compensatory rest in lieu of payment.
Multi-agreement Situations and Acquisitions
Companies that grow through acquisition face particular complexity: the acquired entity may be covered by a different agreement than the acquirer. Under Article 44 of the Workers’ Statute, in business succession the existing employment contracts are subrogated to the acquirer, who must honour the conditions deriving from the agreement in force at the acquired entity until a new applicable agreement supersedes them.
Post-merger harmonisation of employment conditions is one of the most sensitive elements of any integration plan. Doing it prematurely — for example, by unilaterally applying the acquirer’s agreement before the acquired entity’s agreement expires — constitutes a substantial modification of working conditions and requires following the procedure under Article 41 of the Workers’ Statute, including collective consultation periods.
At BMC we advise on employment law and collective relations, including collective agreement determination, post-merger harmonisation and Labour Inspectorate defence. See our employment law services.
