Understanding Collective Bargaining Agreements

Posted on Mar 9, 2025 in Law & Jurisprudence

Definition of Collective Bargaining Agreement

A collective bargaining agreement is a solemn convention held by an employer, a group of employers, or an employers’ association, and one or more trade unions. Its purpose is to establish uniform working conditions, regulate matters aimed at raising the living standards of workers and their families, and stabilize labor-management relations.

Characteristics of Collective Bargaining Agreements

  1. It is a convention where the party representing the employees must be a person of legal employment or a collective entity of the 1st, 2nd, or 3rd degree.
  2. The collective agreement and its regulations are supported by the absolute majority of workers in an enterprise (or enterprises) within the same branch of industry, commerce, or agriculture. This compels all workers employed in that firm (or firms). To determine the absolute majority, leadership and trusted employees (Art. 515 LOT), or representatives (Art. 510 LOT) are excluded.
  3. Minimum principle of inviolability. Exception to the principle of minimum inviolability (Art. 525, 512, and 506 LOT).
  4. The content of the collective agreement is limited by mandatory statutory and constitutional provisions. In addition, their own rules are the primary sources for the general terms and subjective resolution of disputes that may arise (Article 60, lit. A LOT).
  5. It is a solemn contract, subject to mandatory conditions. It must be written in triplicate, under penalty of nullity. Each party retains one copy, and the third is deposited with the Inspectorate of the National Jurisdiction.
  6. The term may not exceed three years nor be less than two years, but reviewable periods may be established (Article 522 LOT).
  7. The economic, social, or union terms that benefit workers remain in force until another collective agreement replaces it (Art. 524).

Content of Collective Bargaining Agreements

Collective agreements contain a set of stipulations, namely:

  • Standards: Composed of economic and social terms intended for incorporation into individual labor contracts. This reflects the objective nature of the convention.
  • Obligational: Obligations assumed by the parties, which generate rights and obligations, and secondarily, a bilateral relationship (expansive power of the normative clauses).
  • The Framework of the Convention: Formed by clauses intended to ensure the implementation of the collective agreement (e.g., duration, complaint procedures, conciliation, arbitration).
  • Eventual, Incidental, or Ancillary: Regulations governing matters that occasionally occupy the interest of the parties (e.g., payment of wages during a strike).

Process for a Collective Bargaining Agreement

  1. Presentation of the Project: Submission of the project in triplicate, accompanied by an authentic record of the workers’ assembly where approval was agreed upon, to the Labor Inspectorate.
  2. Project Review: Review of the project by the Inspectorate for clarification or correction. In their absence, the employer is notified (Art. 517).
  3. Immovability: Begins on the date and time of the project’s presentation (Art. 520 LOT).

Opposition Exceptions

The employer can only initiate discussions in the first session.

  • Impact: With Location: End of procedure; Without: Continue negotiations.
  • Minimum Percentage of Workers: Those representing an absolute majority of workers, excluding trusted management and representatives.

Effects of Collective Bargaining Agreements

  • Expansive: The provisions of the Convention apply equally to workers hired before, during, and after its term (Arts. 508, 509, 524 LOT).
  • Automatic: The provisions of the collective agreement clauses become mandatory and an integral part of individual employment contracts concluded or to be held under its force, excluding only trusted employees, leadership, and representatives.