Definitive Report - Report No 368, June 2013

Case No 2918 (Spain) - Complaint date: 17-NOV-11 - Closed

Allegations: A royal decree-law that suspends a collective agreement relating to an increase in remunerations throughout the public administrations

1. 323. The complaint is set out in a communication from the Citizens’ Service Federation of the Trade Union Confederation of Workers’ Commissions (FSC-CCOO) of 17 November 2011.
2. 324. The Government sent its reply in the communication of 24 April 2012.
3. 325. Spain has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), the Labour Relations (Public Service) Convention, 1978 (No. 151), and the Collective Bargaining Convention, 1981 (No. 154).

A. The complainant’s allegations

1. 326. In its communication of 17 November 2011, the FSC-CCOO declares that it is filing a complaint against the Government of Spain for violating the right to collective bargaining and freedom of association, and in particular for violating ILO Conventions Nos 87, 98, 151 and 154.
2. 327. The FSC-CCOO explains that on 25 September 2009, the Government and Trade Union Agreement for the Public Sector was signed. Agreed on, among other measures, were a wage increase of 0.3 per cent for 2010 and a wage revision clause applicable in 2012, which aimed to maintain the purchasing power of personnel working in the public administrations during the agreement’s validity period, as follows:

   5. Remuneration of personnel working in the public administrations

   • 45. Remuneration measures conform to the principle of maintaining the purchasing power of personnel working in the public administrations during the validity period of this agreement. To this end, the following will be taken into account: budgetary development in line with the increase in CPI, the economic growth forecast, the financing capacities of the General State Budget and the calculated increased productivity in the public service based on measures or specific programs.
   • 46. For 2010 it is agreed that there will be a 0.3 per cent wage increase in the overall wage sum.
   • 47. To fulfil these objectives, the Government and Trade Unions have agreed on the following clause on wage revision: the Administration commits to take appropriate measures to incorporate, in the 2012 budget, loans needed to compensate for the possible loss of purchasing power of public employees during the validity period of this agreement.
   • As of 1 January 2012, and within the first trimester of that year, the amount corresponding to the deviation which, where applicable, will have resulted between the increase provided for in the Law on the General State Budget for budgetary years 2010 and 2011, and the actual inflation for those years will be incorporated in the wage sum of 2012.
   • As of 1 January 2013, and within the first trimester of that year, the amount corresponding to the deviation which, where applicable, will have resulted between the increase provided for in the Law on the General State Budget for 2012, and the actual inflation for that year will also be added to the wage sum of 2013.
   • 48. Besides the increases indicated above, the fulfilment of the economic agreements established and applicable for the period 2010-2012 is guaranteed. Therefore, the increases in remuneration stated above will be applied irrespective of the remuneration improvements stipulated in the pacts or agreements previously signed by the different public administrations according to their area of competence, including those aimed at incorporating the total specific allowance in special payments.
3. 328. Law No. 26/2009 of 23 December, on the general state budget for 2010, in Chapter I of Title III, laid the foundation and coordination for general economic planning relating to expenditure on the public service, giving the agreement cited above effect to consider the agreed on salary increase. Paragraph 2 of section 22 stipulates that, as of 1 January 2010, public servants’ remuneration shall not undergo an overall increase greater than 0.3 per cent with regard to the remuneration rate of 2009, which, conversely, allows for the application of a wage increase of 0.3 per cent, in accordance with the following terms:

   On the increased expenditure on the public service

   • Section 22. Basis and coordination for general economic planning relating to expenditure on the public service.
   • […]
   • Two. As of 1 January 2010, public servants’ remuneration, including, where relevant, that which according to special payments comes under the remit of article 21, paragraph 3, of Law 42/2006, of 29 December, on the General State Budget for 2007, as provided for in paragraph 2 of article 22 of Law No. 2/2008, of 23 December, on the General State Budget for 2009, shall not undergo an overall increase greater than 0.3 per cent with regard to the wages of 2009, in terms of uniformity for the two periods under comparison, as regards the number of personnel and their age.
   • These remuneration increases shall be applied irrespective of the remuneration improvements stipulated in the pacts or agreements previously signed by the different public administrations according to their area of competence.
   • Three. Besides the general remuneration increase provided for in the preceding paragraph, the administrations, entities and companies referred to in paragraph 1 of this section may allot up to 0.3 per cent of the wage sum to finance employment pension contributions or collective insurance contributions which consist of retirement cover for personnel included in their respective areas, in accordance with the second final provision of the Consolidated Text of the Law on Pension Plans and Funds.
4. 329. The FSC-CCOO adds that on 20 May 2010 the Secretary of State of the Public Service called the trade unions to a meeting of the General Negotiating Table of the Public Administrations with no fixed negotiating agenda, aiming to explain how a 5 per cent cut in public servants’ wages would be carried out, which they assured, would be approved in the Council of Ministers to be held that same day. Far from holding “real” negotiations, the Administration at the meeting was not even capable of explaining the content of what was going to be approved a few hours later, directing trade union representatives to listen to the radio from 6 p.m. to 6.30 p.m., when the last press conference would be transmitted to the Council of Ministers taking place that same evening, so that they could find out the details of the restrictions on public servants’ wages, which they had announced would be implemented.
5. 330. In this case, negotiations did not take place, nor was any specific information given on their measures and their scope, adopting a fait accompli policy. The measures in question were adopted unilaterally.
6. 331. In the previously cited Council of Ministers of 20 May 2010, a royal decree-law was adopted, containing an “Extraordinary measures plan to reduce public spending by another 15,000 million within two years”, which was outlined by the Government in the last press conference as:
   • The royal decree-law approved today will enable us to close 2011 with a 6 per cent deficit of GDP for all the public administrations as opposed to the 7.5 per cent deficit previously envisaged.
   • The approved measures seek to distribute the effort equally between the whole of society and involve all the public administrations.
   • The plan will reduce public spending by an additional 5,250 million euros this year and by another 10,000 million euros in 2011.
   • The Council of Minsters has approved a royal decree-law and three agreements that draw up urgent measures for reducing the public deficit. They consist of a set of initiatives drawn up in different areas of the Administration, with the primary objective of accelerating fiscal consolidation provided for in the Stability and Growth Program, which will allow the financial year of 2011 to be closed with a public deficit of 6 per cent of GDP, as opposed to the 7.5 per cent initially envisaged.
   • This special adjustment plan highlights Spain’s contribution to the stability of the joint currency and the coordinated response which the member countries of the Monetary Union have decided to bring to the turbulence that has affected the Euro economies in the last few weeks, and that they have advised to accelerate the fiscal consolidation plans envisaged by a large number of countries in the area.
   • Likewise, it forms part of the Government’s strong commitment to sustain the public finances, which was already established in the State Budget of 2010 with a current expenditure cut equalling 0.8 per cent of GDP. This commitment was further deepened with the Updated Stability and Growth Program which was sent to Brussels last January, stating clearly the objective of reducing the Spanish public deficit by 3 per cent of GDP in 2013.
   • The document cited above detailed the instruments with which this objective would be met: the Immediate Action Plan 2010, entailing a reduction of 5,000 million euros by adopting non-availability agreements in the State budget expenditure for the current financial year; the Framework Agreements with the Autonomous Communities and Local Corporations to involve the territorial entities in the fiscal consolidation plan; and the 2011-2013 Austerity Plan which puts forward far-reaching cuts to public spending to save up to 2.6 per cent of GDP. It also outlined a deficit reduction path for each of the public administrations according to which the overall public deficit would decrease as follows: 11.2 per cent in 2009; 9.8 per cent in 2010; 7.5 per cent in 2011; 5.3 per cent in 2012; and 3 per cent in 2013.
   • The measures approved today modify this pattern of decrease, by concentrating almost two thirds of the adjustment between 2010 and 2011 and leaving just one third of the total consolidation for the final two years of the program, so that now the deficit would stand at 9.3 per cent in 2010; 6 per cent in 2011; 4.4 per cent in 2012; and 3 per cent in 2013. To achieve this, the Government has approved, in this royal decree-law and in one of the agreements, a series of adjustment measures in different areas. It is also presenting new framework agreements to the autonomous communities and local corporations so that the territorial entities also cooperate in this new, more ambitious, fiscal consolidation objective.

   Measures included in the royal decree-law

   • The royal decree-law specifies the adjustment measures to be adopted in the next few weeks to achieve the additional reduction of 1.6 points of the GDP of the public deficit in 2011. The predicted savings for public expenditure equal an additional 5,250 million in 2010 and another 10,000 million in 2011.

   A reduction of 5 per cent in public wages

   • The royal decree-law establishes an average reduction of 5 per cent per annum in the wages of public servants. This will be applied progressively to minimise the effect on the lowest wages. The scale will oscillate between 0.56 per cent and 7 per cent according to the income level of the professional group, will affect all personnel in the public administrations and will be applied equally to basic and complementary remuneration. The senior officials will have their wages reduced by between 8 per cent and 15 per cent. This reduction will come into force on payrolls from June, and the wages will remain frozen for 2011.
   • The savings that this measure should generate for the General State Administration are quantified as 535 million euros in 2010 and 1,035 million in 2011. For the territorial administrations it should result in savings of 1,765 million this year and 3,465 million the next year.
   • […]
   • There are three key factors that will contribute to this adjustment on the expenditure side: withdrawing transitional measures, spending the minimum possible on unemployment benefits due to the need for progressive economic recovery and finally, the measures that the Government is going to apply in the next three financial years, which are as follows: freezing public servants’ remunerations for 2011 following the 5 per cent reduction foreseen for 2010.
7. 332. Thereby, the complainant organization points out that the result reached through collective bargaining on the public sector was completely eliminated, rendering invalid the binding commitments reached between the parties.
8. 333. The complaint organization notes that Royal Decree-Law No. 8/2012 contains the following:
   • Thus in compliance with article 36, section 2, paragraph two and article 38, paragraph 10 of the Law on the Basic Statute of Employees, the General Negotiating Table of the Public Administrations met on 20 May of this year to inform the trade unions about both the suspension of the agreement of 25 September in the terms set forth, and the measures and criteria laid out by the Royal Decree-Law in this area.
9. 334. The Royal Decree-Law which adopts extraordinary measures to reduce the public deficit was validated by the Congress of Deputies on 27 May 2010, in which article 1 modifies Law No. 26/2009 of 23 December, on the general state budget for 2010, which in its new draft (and which remains to be seen once the budget year has advanced) establishes a 5 per cent reduction in the wage sum of public servants, which includes all remunerations relating to wages and other areas, as well as social expenditure. The Preamble states:
   • It is necessary to refer to the Government and Trade Union Agreement for the public sector in the context of the social dialogue of 2010-2012, singed on 25 September 2009, in which is adopted, inter alia, a salary increase of 0.3 per cent for 2010 and a wage revision clause to comply with the principle of maintaining the purchasing power of public servants during the agreement’s validity period, taking into account the budgetary development in line with the CPI, the economic growth forecast, the financing capacities of the General State Budget and the calculated increased productivity in the public service based on measures or specific programs.
   • Economic measures in the above Agreement are directly affected by the economic crisis referred to above, rendering it impossible to uphold the remuneration measures agreed upon, and urgent action to reduce the public deficit is called for.
   • In view of this, the Council of Ministers has agreed, through the Royal Decree-Law, under the provisions of article 38, section 10 of Law No. 7/2007, of 12 April, on the Basic Statute of Public Employees, to partially suspend the application of the clauses referring to the agreement on remuneration.
   • Additionally, complying with the provisions of article 36, section 2, paragraph two and article 38, section 10 of the Law on the Basic Statute of Public Employees, the General Negotiating Table of the Public Administration met on 20 May of this year to inform the trade unions of both the suspension of the Government and Trade Unions Agreement of 25 September in the terms set forth, and the measures and criteria laid out by the Royal Decree-Law in this area.
10. 335. According to the complainant, the second additional provision of Royal Decree-Law No. 8/2010, seeks to protect the infringement on public servant’s remuneration, and completely ignores the wage rights contained in the collective agreements and accords in force; it suspends the Government and Trade Union Agreement for the Public Sector, of 25 September 2009, which adopted, among other measures, a wage increase of 0.3 per cent for 2010 and a wage revision clause for 2012, aimed at maintaining the purchasing power of public servants during the agreement’s validity period, as follows:
    • Second additional provision. Suspension of the Government and Trade Union Agreement for the public sector within the framework of the 2010-2012 social dialogue. It has been agreed that from 1 June 2010 the partial suspension of the Government and Trade Union Agreement for the public sector within the framework of the 2010-2012 social dialogue signed on 25 September 2009, shall come into effect, in the necessary timeframe for the correct application of the Royal Decree-Law, and specifically, the economic measures.
11. 336. Nevertheless, as can be seen, the unilateral modification of wage conditions is not confined, as can be seen, to the suspension of the Government and Trade Union Agreement cited above, since this would have led to a wage freeze for the previous year, the moment the wage rise for 2010 consisting in a maximum 0.3 per cent rise, ceased to apply; furthermore, it also entails an average 5 per cent reduction in wages and other types of remuneration for both civil servants and public employees. These wage reductions, imposed unilaterally by the Government, by a royal decree-law, were applied to all public servants’ payrolls from June 2010.
12. 337. The complainant organization points out that prior to resorting to legal procedures, it called for a 24-hour strike on 8 June 2010, which concerned all civil servants and public employees, aiming to achieve compliance with the agreements made between the trade unions and the Government, and in particular, strict compliance with the Government and Trade Union Agreement 2010–12 for the Public Sector, signed 25 September 2009, as well as compliance with the clauses of all the agreements and accords reached both in the different public administrations, and also in the wage clauses of the agreements and accords of public entities and companies which the Government simply repealed with no further follow-up.
13. 338. The collective agreements or accords were already in force for these employees when the events that sparked this complaint took place; their [the collective agreements] precepts on remuneration in no way allow for the possibility of a reduction, and much less so if such practises are imposed unilaterally by the Administration. The restrictive measures adopted regarding remunerations apply to both civil servants and public employees in different public sector institutions and companies (in the latter case governed by the private sector workers’ regulations). The complainant organization maintains that these measures infringe on the Constitution and the legislation in force.
14. 339. The FSC-CCOO points out that its legal services filed many cases with separate judicial bodies. The first claims brought before the Social Chamber of the National Court, all resulted in orders which urged the issue of constitutionality to be examined, but the Constitutional Court issued a decree on 7 June, published in the Official State Bulletin (BOE) of 4 July, which refused to consider the issue of unconstitutionality raised by the Social Chamber of the National Court without assessing the core of the case lodged, asserting that the Royal Decree-Law “neither regulates the general regime of the right to collective bargaining nor does the inviolability of the collective agreement figure as one of its fundamental elements.

B. The Government’s reply

1. 340. In its communication of 24 April 2012, the Government denies that Royal Decree-Law No. 8/2010 which adopts extraordinary measures to reduce the public deficit violates the standards set out in the Constitution of Spain or ILO Conventions Nos 87, 98, 151 and 154. It also states that the Government and Trade Union Agreement for the Public Sector within the framework of the 2010–12 social dialogue, of 25 September 2009 (BOE 26/10), is not a conventional collective agreement, regulated by part III of the Workers’ Statute, but rather an agreement within the framework of social bilateral dialogue between the Government and trade unions which does not set out working conditions, but as a political agreement, sets out a specific line for the expenditure policy on personnel and other areas such as training etc. Indeed, the agreement which is made up of 50 points grouped in six paragraphs does not only focus on compensation but is much broader in scope. It also covers the following: encouraging the good management, quality and efficiency of the public services; improving working conditions, enhancing the professionalism and productivity of public servants; rationalizing public employment, reducing instability and modernizing the Administration; strengthening trade union rights and supporting channels of collective bargaining; and in addition, it regulates the corresponding Follow-up Commission for the Interpretation and Evaluation of the Agreement. From the above, only that referring to the remuneration of public servants has elicited complaints from the CCOO regarding Royal Decree-Law No. 8/2010.
2. 341. The Government points out that the Memorandum of Understanding was concluded in a context of economic crisis, as is clearly stated by the text itself, and that the position regarding remuneration is also clear: the principle, not the objective, which the remuneration measures comply with, is to maintain purchasing power by taking into account budgetary development in line with the growth of the Consumer Price Index (CPI), the economic growth forecast, the financing capacities of the general state budget and the calculated increased productivity in the public service based on measures or specific programs, and also agreed on is a small rise of 0.3 per cent in the nominative wage sum. The agreement was made under circumstances of economic difficulty and Royal Decree-Law No. 8/2010 was passed under these same circumstances. Consequently, with regard to Royal Decree-Law No. 8/2010, it must be emphasized that the measure agreed on at first, later turned out to be inadequate or insufficient to tackle the demands of the situation. The Government recalls that article 169(1) of the Constitution empowers the State to establish the general planning basis and coordination for economic activity and highlights that the remuneration of both civil servants and public employees of the public administrations weighs heavily on the Public Treasury. The state is empowered to direct general economic activity to achieve economic stability – macroeconomic objective stated in article 40(1) of the Constitution, which the recovery of budgetary equilibrium may gradually contribute to.
3. 342. According to the CCOO, the meeting of the General Negotiating Table of the Public Administrations of 20 May 2010, held without agenda, aimed to explain how the 5 per cent cut in public servants’ wages, which was to be approved in the next Council of Ministers, would be carried out. Regarding this issue, the Government adjoins the considerations of the General Directorate of the Public Service, due to both its participation in the proceedings and its responsibility for the application of ILO standards. These considerations state:
   • Regarding the meeting of 20 May 2010, of the General Negotiating Table of the Public Administrations, “the minutes from the meeting show that despite the time pressure and the urgency generated by a particularly serious economic situation in Spain and Europe, the integral parts of the General Negotiating Table were aware of the proposals that the Administration planned to introduce in the General State Budget Law for 2010. In this regard, the minutes record how the Secretary of State of the Public Service took the floor and emphasized that convening this meeting was in line with the commitment adopted in the meeting held by the General Negotiating Table on 12 May 2010, to, as soon as possible analyse the measures which the Government planned to apply to reduce the public deficit. In this last meeting of 12 May, the trade unions present made clear their positions on how the aforementioned measures could affect the remuneration of public servants, and requested to call for a new meeting of the General Negotiating Table to carry out a more in-depth analysis of their possible effects. This meeting took place 20 May. It is established, therefore, that each side present at the General Negotiating Table of the Public Administrations held 20 May, was aware of the proposals made by the other, and that each side had the opportunity to propose what it thought necessary to defend its interests, being aware of what was being sought by the other. […]; each side was able to express its position and was aware of what the other side was seeking […].
4. 343. Therefore, without prejudice to the above report of the General Directorate of the Public Service, it should be noted that, following the preamble to Royal Decree-Law No. 8/2010, the meeting of the trade unions of 20 May aimed to inform these organizations. It was not, and does not purport to be a meeting for negotiations. The aim was to fulfil the Government’s commitment to accelerate, in 2010 and 2011, the reduction of the initially predicted deficit, in response to the serious deterioration in the public finances which had to be addressed as a prerequisite for stable and lasting economic recovery. This was also expressed in the preamble to the Royal Decree-Law.
5. 344. The Constitutional Court issued Decree No. 85/2011, of 2 June, in which it refused to consider the issue of the alleged unconstitutionality raised in the conflict with the FNMT. And it also issued Decree No. 101/2011, of 5 July, on the issue of unconstitutionality put forward by the Social Chamber of the National Court in the case on State Ports and Port Authorities and Decree No. 104/2011, of 5 July; this last issue of unconstitutionality was raised by the Social Chamber of the High Court of Andalusia, in the personnel labour affairs of the Board of Andalusia.
6. 345. The Government points out that collective agreements resulting from collective bargaining which is constitutionally guaranteed, employ their binding force in the same way as norms in the legal order, within a hierarchical structure in which the norm of superior rank is the law, in material terms. In other terms, only if the Royal Decree-Law had not been validated by the Congress of Deputies, could it be considered that the Government and Trade Union Agreement had suffered an unjustified attack by the Executive Power; however, it was validated by the Congress of Deputies, which did not deem it necessary for it to be processed as a draft law.
7. 346. The Government adds that in line with article 86 of the Constitution: (1) in cases of extraordinary and urgent need, the Government may issue temporary legislative provisions which shall take the form of decree-laws and which may not affect the regulation of the basic State institutions, the rights, duties and liberties contained in part 1, of the system of the Autonomous Communities, or the General Electoral Law; (2) the decree-laws must be submitted forthwith to the Congress of Deputies, which must be summoned for this purpose if not already in session. They must be debated and voted upon in their entirety within thirty days after their promulgation. Congress must expressly declare itself in favour of ratification or repeal within said period of time, for which purpose the Standing Orders shall establish a special summary procedure; (3) during the period established in the foregoing clause, their passage through the Cortes may be the same as for Government bills, by means of the emergency procedure.
8. 347. The Government adds that the legislative provisions in the case of extraordinary and urgent need, were tried by the Constitutional Court with the understanding that as far as exercising political authority (article 97 of the Constitution), which “According to Judgement No. 29/1982 of May (RTC 1982/29) of the Constitutional Court, in principle and with a reasonable margin of discretion, it is the responsibility of the political bodies – the Government and Congress – to determine when the situation, in the case of extraordinary and urgent need, calls for a decree-law to establish regulations. This margin of discretion for legislative provisions conferred to the political bodies does not prevent the Court from controlling it …” (STC 111/1983, 2 December [RTC 1983, 111], FJ 5). Therefore the Government in principle has the competence and can use its initiative to decide when a situation, due to reasons of extraordinary and urgent need, requires legislative action in the form of a decree-law, if these reasons are clearly explained.
9. 348. The Constitutional Court in this case ratified the legislative provisions, emphasizing that “if urgent measures had not been undertaken to radically reduce the public deficit, the speculative attacks on our economy would have intensified and over €27 million euros, which the interest on the debt would have cost in 2011, could have increased geometrically, making it impossible to use the funds saved by the measures referred to above for productive action which, giving incentive to the real economy, would enable the very serious unemployment situation in our country to be improved as quickly as possible”, also taking into account that the length of time it would have taken to process a law, even by means of emergency procedure, would have let to a “serious deterioration in our financial system, affected the credibility of our economy and would have probably hindered us from establishing the foundations for sustainable recovery, since we could not be compelled to geometrically increase the interest to serve the debt”. The Government points out that the present one, thus, would figure as a clear decree-law used to handle “problematic economic situations” – a legal instrument, appropriate and suited to overcoming specific situations which, for reasons difficult to foresee, require immediate regulatory action to be carried out within a shorter timeframe than that required by the usual route or by the emergency proceedings for the application of parliamentary laws.
10. 349. The National Court argues that the collective agreement can be modified during its validity period by another collective agreement, making it possible, therefore, for it to be suspended, modified and also suppressed during its validity through a law, which should respect its essential content, and when extraordinary and urgent circumstances arise, comply with the general evaluation test, so that the fulfilment of the legal good or goods protected by such measures, is carried out in a way that least impinges on the right for collective bargaining as well as on its functional side – freedom of association.
11. 350. The Government points out that during the debate and vote on the validation of Royal Decree-Law No. 8/2010 in Congress, also submitted for consideration was to process it as a draft law, but the proposal was rejected by a majority. Effectively, processing it as a draft law and giving separate political representations the opportunity to participate in the process would have improved the provisions, in line with the normal democratic procedures of drafting laws, but nevertheless, the validated Royal Decree-Law has no less constitutional legitimacy, nor is it, as was stated, inferior to the law.
12. 351. In any case, the Constitutional Court rejected the claim of unconstitutionality, considering it manifestly unfounded to determine, in a preliminary examination of the issues raised, its lack of viability and that therefore it was advisable to resolve this claim in the first procedural phase to avoid procedural delays which would affect other proceedings. In Decree No. 85/2011, the claim is dismissed by the following main reasons relating to the “infringement” of rights as the material limit of the Decree-Law: (1) the material limit prohibits the Decree-Law from regulating the general provisions of the disputed right, or from countering the provisions or essential attributes of this right; (2) the provisions of Royal Decree-Law No. 8/2010 under question, “don’t regulate the general regime of the right to collective bargaining recognised in article 37(1) of the Constitution, nor do they stipulate anything on the binding force of the collective agreements in general, nor specifically, on those directly affected by them, which retain this binding force which is typical for this type of source, taken from its position in the system of sources of law”; (3) in reference to the binding force, it specifies that intangibility and inalterability should not be confused with the binding force of the collective agreement, and reiterates that, as has already been declared in the ruling of the Constitutional Court No. 210/1990 of 20 December, FFJJ 2 and 3 “the supposed intangibility or inalterability of the collective agreement before the legal standard does not emanate or derive from article 37(1) of the Constitution, even if it is a supervening norm” so that “by virtue of the principle of normative hierarchy, it is the collective agreement that should respect and submit not only to the formal law, but more generally, to the higher-ranking norms, and not the contrary”; (4) given that it negates the infringement of the law on collective bargaining, it does not examine the supposed infringement on freedom of association.
13. 352. The National Court (that pushed forward the question of unconstitutionality), pronounces among others, Judgement No. 115/2011 of 20 July, which, through extensive reference to the vicissitudes of the process and the Order of the Constitutional Court, dismisses the demands of certain trade union organizations and the National Court goes on to say:
    • The doubts concerning constitutionality, raised by the Chamber on the part of the High Court, have been allayed. The Court considers them manifestly unfounded, and in recognizing that a statutorily valid collective agreement may be modified by the Royal Decree-Law for the reasons previously mentioned, we must necessarily conclude that the reduction in remuneration imposed by the National Tax Administration Agency (AEAT) on its employees did not infringe on the provisions of articles 7, 28(1), 37(1) and 86(1) of the Constitution nor those of article 41 ET, since the AEAT is subject to the law and right to conform with the provisions of article 103(1) of the Constitution, being obliged, as a result, to apply the reduction imposed by articles 22(4) and 25 of Law No. 26/2009 of 23 December for the General State Budget of 2010, in the terms stated by article 1 of Royal Decree-Law 8/2010 of 20 May.
    • […]
    • We also maintain that there has been no expropriation of any kind since the remuneration of public servants cannot exceed the wage sum established annually by the General State Budget Law, in accordance with the provisions of article 21(2) EBEP. This is precisely the case here, since Royal Decree-Law No. 8/2010 of 20 May, in the context of urgent and extraordinary need, reduced the wage sum of public servants, it being considered by the Constitutional Court that the vehicle used does not affect the essential content of the right to freedom of association in its functional approach to collective bargaining, which this Chamber respects under its own terms, in line with the mandate of article 5(1) LOPJ. Consequently, if the decrease in remuneration imposed by the AEAT was caused by its obligation to fulfil articles 22.4 and 25 of Law No. 26/2009 of 23 December, in the version given by Royal Decree-Law No. 8/2010 of 20 May, it must be concluded without doubt that this intervention was lawful and did not violate articles 7, 28(1), 37(1) and 86(1) of the Constitution, in relation to Article 41 ET, which forces both the primary appeal and the subsidiary one to be dismissed, since the controversial decrease has affected the overall wage sum with a reduction of 5 per cent, making it consequently inadmissible for the wage rate of 31 December 2009 to be maintained.
14. 353. In conclusion, the Government reiterates that the ILO Conventions on collective bargaining and working conditions in the public administrations have been complied with, in short:
    • – The limitations imposed by the law on expenditure on personnel are feasible and founded and are adjusted to the Constitution of Spain and the overall legal system, in which it is up to the State to establish a wage ceiling for public servants through an inflation-containment policy by reducing the public deficit, and, as a priority, the investments in expenditure.
    • – The complaint constantly refers to the Government and Trade Unions Agreement of 25 September 2009, which, as previously shown, regulated the working conditions of public servants, but was an agreement made within the framework of social dialogue, which settled on a specific course of action for the expenditure and personnel policy, and, as such, was embodied in the General State Budget Law of Spain for 2010.
    • – Notwithstanding, the modification of the General State Budget Law by Royal Decree-Law No. 8/2010, affects public workers who fall within the scope of the collective agreements concluded under the original wording of said General State Budget Law, and who have had their wages reduced.
    • – Royal Decree No. 8/2010 was issued according to the provisions of article 86 of the Constitution, and therefore has the same effectiveness as a law passed in the Cortes Generales.
    • – The collective agreements are to be subject to the corresponding right established by the law, which is superior in the normative hierarchy; in other words, the primacy of the law over the agreement stems from the agreement’s submission to the provisions which make this possible.
    • – Thus, the collective agreement may be altered by a decree-law, in accordance with the principle of normative hierarchy.

C. The Committee’s conclusions

1. 354. The Committee observes that in this case the complainant organization objects to Royal Decree-Law No. 8/2010, approved by the Council of Ministers on 20 May 2010 (published on 24 May 2010) and validated by the Congress of Deputies on 27 May 2010 which: (1) citing the economic crisis and the need for urgent action to reduce the public deficit, suspends the clauses of the Government and Trade Union Agreement for the public service of 25 September 2009, which agree on a wage increase of 0.3 per cent for 2010 and contain a wage review clause applicable in 2012; this unilateral measure is part of a 5 per cent cut in the wage and other types of remuneration of employees working in the different public administrations, but also in the wage and other types of remuneration of a large part of public sector entities, including companies, associations and other public entities whose staff work under the labour standards of the private sector; (2) all public sector employees were covered by collective agreements or accords in which the clauses on remuneration did not provide for the possibility of a decrease. It is alleged that the trade unions were informed of the measures described on 20 May 2010 as a mere formality, not given sufficient detail and negotiations would have been held without them anyway, thus adopting a fait accompli policy.
2. 355. As for the allegation of the complainant organization that Royal Decree-Law No. 8/2010 of May 2010, which set down cuts in the wages and other types of remuneration of those working in the public administration and the public sector at large, was adopted unilaterally by the Council of Ministers after a briefing with the Secretary of State of the Public Service, which was a mere formality, the Committee notes that according to the Secretary of State, the parties in the General Negotiating Table (body provided for in the legislation) were aware on 12 May 2010 of the proposed changes that were going to be introduced, (to analyse as quickly as possible the measures that the Government planned to apply to reduce the public deficit), with the trade unions stating their positions on the issue and then requesting a new meeting to carry out a more thorough review of the possible effects, a meeting which took place on 20 May 2010. The Committee notes that the Government highlights the time pressure and urgency that was felt due to the particularly serious economic situation in Spain and Europe. The Committee observes, however, that the text of Royal Decree-Law No. 8/2010 does not refer to any consultations taking place but points out that “the General Negotiating Table of the Public Administrations met on 20 May in order to inform the trade unions of the suspension of the Government and Trade Union Agreement of 25 September in the terms set forth, as well as the measures and criteria which it puts forward in this area”.
3. 356. The Committee notes that the versions of the complainant and the Government are diametrically opposed; while noting that the Government refers to economic circumstances of extraordinary gravity, which necessitated urgent action, the Committee regrets the absence of a genuine consultation process, particularly when taking into account that the proposed measures were applied to a significant part of the public sector and had the effect of suspending economic clauses in collective agreements. The Committee draws attention to “the importance it attaches to the promotion of dialogue and consultations on matters of mutual interest between the public authorities and the most representative occupational organizations of the sector involved”, as well as “the value of consulting organizations of employers and workers during the preparation and application of legislation which affects their interests”. The Committee highlights the importance of holding detailed consultations and making sure that the parties have sufficient time to prepare and express their points of view and discuss them in depth. The Committee also emphasizes that the process of consultation on legislation helps to give laws, programmes and measures adopted or applied by public authorities a firmer basis and helps ensure they are well respected and successfully applied; the Government should seek general consensus as much as possible, given that employers’ and workers’ organizations should be able to share in the responsibility of securing the well-being and prosperity of the community as a whole [see Digest of decisions and principles of the Freedom of Association Committee, fifth (revised) edition, 2006, paras 1067 and 1072 ].
4. 357. The Committee highlights the importance of these principles with regard to consultations on legislation that affects the interests of trade unions and their members.
5. 358. The Committee wishes to turn to the substantive allegation made by the complainant organization: that is, whether or not the Royal Decree-Law violates Conventions Nos 87, 98, 151 y 154 ratified by Spain, by suspending the clauses on wages and other forms of remuneration in the Government and Trade Union Agreement on the Public Service of 25 September 2009 (which established a 0.3 per cent wage increase for 2010 and a wage revision clause applicable in 2012) as part of a 5 per cent cut in the wage and other forms of remuneration in the different public administrations, and in a large part of public sector, including companies, associations and other public entities (whose staff work under the labour standards of the private sector and under agreements or collective agreements containing clauses on remuneration which, according to the allegations, did not provide for the possibility of reductions in this area).
6. 359. The Committee takes note of the statements made by the Government, the legal texts and jurisprudence and judgements it refers to, as well as its assertion that Royal Decree-Law 8/2010 does not violate Convention Nos 87, 98, 151 and 154. The Committee notes that, as transpires from the information given by the Government and from the legal texts and judgments it refers to (some have also been quoted by the complainant trade union): (1) the Government and Trade Union Agreement on the public service of 25 September 2009 was made under economically difficult circumstances, the same difficult circumstances under which the Royal Decree-Law, criticized by the complainant organization, was passed; this being because the Government and Trade Union Agreement later turned out to be inadequate or insufficient to respond to the economic situation; the Royal Decree-Law sought to ensure compliance with the Government’s commitment to accelerate in 2010 and 2012 the reduction of the foreseen deficit, in response to a serious deterioration of the public finances which had to be corrected as a prerequisite for a stable and lasting economic recovery; (2) it is up to the Government to assess when a situation, due to extraordinary and urgent reasons, requires normative action in the form of a decree-law (the requirements of this law being regulated by the Constitution and reproduced in the Government’s reply); (3) the Congress of Deputies validated the Royal Decree-Law and the Constitutional Court ratified the legislative provisions of urgent need for the Decree-Law to be issued; it also stated that by virtue of the principle of normative hierarchy, the collective agreement should be submitted to not only the law but also generically to the norms of higher judicial rank; the National Court deemed Royal Decree-Law No. 8/2010 to be within the law; the jurisprudence of this judicial body indicates that the suspension or modification of a collective agreement by law is possible in circumstances of extraordinary and urgent need, respecting its essential content and resulting in the least damage to the right to collective bargaining; (4) the Government and Trade Union Agreement for the public service of 25 September 2009 within the framework of social dialogue 2010-2012, is not a conventional collective agreement regulated by the Workers’ Statute, but an agreement made within the framework of social bilateral dialogue between the Government and Trade Unions, which does not establish working conditions, but as a political agreement, sets out a specific line for the expenditure policy on personnel and many other areas (quality and rationalization of public services, productivity, professionalization etc.). With regards to this, the Committee wishes to point out that the terms of the Government and Trade Union Agreement establish specific and detailed commitments on the subject of remunerations as emerges from the text quoted in the allegations (clause 47) and, in the view of the Committee, the Agreement (which before the decree-law was incorporated in the General State Budget Law regarding the increase in remuneration) falls within collective bargaining covered by the principles of freedom of association and collective bargaining.
7. 360. Regarding the urgency and need alleged by the Government to draw up the measures in the Royal Decree-Law, and if the non-application of the increase in remuneration concluded in the collective agreements or contracts is justifiable, the Committee observes that the applicable texts provided by or mentioned by the complainant organization and the Government frame the governmental measures as part of the requirements for the stability of the common currency and the coordinated response which the Member States of the Single Currency decided to give to the turbulence that affected the Euro economies and that they advised to accelerate the plans for fiscal consolidation, envisaged by a large number of countries in the area; the extraordinary adjustment plan is also part of the firm commitment of the Government regarding the sustainability of the public finances, which was already enshrined in the provisions of the State of 2010 with a cut in current expenditure equalling 0.8 per cent of GDP and in which, what is more, headway was made with the updated Stability and Growth Programme, which was sent to Brussels in January 2012 and which stated the objective of reducing the Spanish public deficit by 3 per cent of GDP in 2013 (in view of the norms of the European Union).
8. 361. The Committee particularly takes note of the arguments made by the Constitutional Court on the need and urgency of the Decree-Law, set out by the Government, on the repercussions of the crisis on sovereign debt and the consequences for State financing:
   • … if urgent measures had not been undertaken to radically reduce the public deficit, the speculative attacks on our economy would have intensified and over 27 million euros, which the interest on the debt in 2011 would have cost, could have increased geometrically, making it impossible to use the funds, saved by the above measures, for productive action which, providing incentive to the real economy, would enable the very serious unemployment situation in our country to be improved as quickly as possible, also taking into account that the length of time it would have taken to process a law, even by means of the emergency procedure, would have led to a serious deterioration in our financial system, affected the credibility of our economy and would have probably hindered us from establishing the foundations for sustainable recovery, since we could not be compelled to geometrically increase the interest to serve the debt.
9. 362. The Committee wishes to highlight the complexity of this case, connected in large part to the commitments stemming from adhesion to the Single Currency of the European Union, moreover in the context of an economic crisis seriously affecting a certain number of countries. The Committee notes that the Government emphasizes that the allegations concerning the supposed infringement on collective negotiation refer to a small nominative rise of 0.3 per cent of the wage sum in circumstances of economic difficulty. The Committee points out that the negotiated increase in question adopted and improved the previous wage and that the decree which suspended it led to a wage cut greater than 5 per cent. Collective bargaining being a fundamental right, the Committee recalls that, in context of economic stabilization, priority should be given to collective bargaining as a means of determining the employment conditions of public servants, rather than adopting legislation to restrain wages in the public sector [see Digest, op. cit., para. 1040]. The Committee also recalls that, if, as part of its stabilization policy, a government considers that wage rates cannot be settled freely through collective bargaining, such a restriction should be imposed as an exceptional measure and only to the extent that is necessary, without exceeding a reasonable period, and it should be accompanied by adequate safeguards to protect workers’ living standards [see Digest, op. cit, para. 1024]. In addition, in previous cases, the Committee considered that, if a government wishes the clauses of a collective agreement to be brought into line with the economic policy of the country, it should attempt to persuade the parties to take account voluntarily of such considerations, without imposing on them the renegotiation of the collective agreements in force [see 365th Report, Case No. 2820 (Greece), para. 995]. The Committee has highlighted the importance of maintaining permanent and intensive dialogue with the most representative workers’ and employers’ organizations and that adequate mechanisms for dealing with exceptional economic situations can be developed within the framework of the public sector collective bargaining system [see 364th Report, Case No. 2821 (Canada), para. 378].
10. 363. The Committee invites the Government to, in future, within the framework of social dialogue, bear in mind the principles referred to.

The Committee’s recommendations

1. 364. In light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a) While noting that the Government refers to economic circumstances of extraordinary gravity, which necessitated urgent action, the Committee regrets the absence of a genuine consultation process with the trade unions on Royal Decree-Law No. 8/2010 despite the importance of the wage cuts it contained, and stresses the importance of the principles on consultations referred to in the conclusions.
   • (b) The Committee invites the Government to, in the future, consider, within the framework of social dialogue, the principles set forth in the conclusions regarding collective bargaining in the event of economic difficulty or crisis.