Castellán

CHARACTERISTICS OF THE 2009 NEGOTIATION SYSTEM. ASPECTS THAT REQUIRED REVISION.

In general terms, the LNC establishes rules for setting general and category minimum wages, as well as updates and adjustments. It also provides for the articulation of collective bargaining at three levels.

i. The first level of negotiation is given by the Tripartite Superior Council (article 7), the second is carried out in the Wage Councils, organized by branches of activity, and the third is at the bipartite or company level. It takes place between the employer and the trade union organization.

ii. Regarding minimum wages and adjustments, the government is responsible for convening, presenting, and defending the economic guidelines. It establishes guidelines regarding deadlines and other elements of the negotiation.

iii. Working conditions must be negotiated by the “social actors”, that is, the professional organizations of workers and employers (article 12 of the LNC). Subsequently, if there is an agreement, the respective Council adopts and incorporates into the agreement what was negotiated, and which will be applicable to all companies in the branch of activity. This "erga omnes" effect ("applicable to all third parties") occurred (until now) once the agreement was registered and published by the Executive Branch.

iv. Regarding the validity of the agreements (the product of collective bargaining), article 17 of the 2009 standard adopted the criterion of "ultrativity", which can be defined as the persistence and permanence after the deadline has expired, unless there is an express agreement to the contrary. In other words, if the loss of effectiveness of the normative part of the agreement was not explicitly agreed, they remained in full force and transcended until a new one replaced it. This generated countless debates, between those who understood that it was a practice that provided security while allowing the agreement of its repeal (if it was the will of the parties), and those who disagreed because they believed that it restricted freedom.

v. Finally, specifically regarding the legitimacy to conclude collective agreements. In particular, the solution provided in the 2009 Law for negotiation in the company, when there is no workers' organization. In this hypothesis, the authorized subject was only the most representative organization at the higher level. This solution was strongly criticized because it completely ignored the negotiation right of the collective that did not wish to join the branch union ("negative union freedom"), for example. It also imposed a certain interference of third parties unrelated to the company's labor reality in the negotiation at the most "intimate" level, which is the bipartite.

This meant that workers could not negotiate (collectively) with their employer in the absence of a union. Imagine, for example, the case of an agreement to reduce working hours as an alternative to unemployment benefits due to lack of work. Would that agreement be valid? The answer so far was negative.

Likewise, the operation of unions as a subject of law - directly related to their obligations and responsibilities - also needed to be reconsidered. Since it was not mandatory to have legal personality for workers' organizations, apparently they could not respond to violations of rights. It must be borne in mind that International Labour Convention No. 87 on freedom of association establishes that, when exercising the rights recognized in said Convention, "workers, employers and their respective organizations are obliged, as well as other persons or organized collectivities, to respect the law".

Something similar happens regarding the "duty to negotiate in good faith". Specifically, with regard to the exchange of information, the 2009 Law does not establish guarantees regarding the confidentiality of its handling, nor what possible sanctions would be for non-compliance. This must be agreed upon by the parties, establishing in advance the consequences for its breach.

As for the positive aspects to highlight of the system, it should be noted that it seems correct that collective relations and especially negotiation, union freedom, and strike (which historically lacked formal legal regulation) had passed to be (at least partially) regulated. However, Law 18,566 clearly did not have the consensus of all social actors, constituting over the years a weakness of the system. In fact, the standard was issued without considering one of the parties (employers), who were not consulted or participated in the drafting of the text.

MODIFICATIONS INTRODUCED BY THE NEW LAW

The standard had to be revised to address the interests of all parties (of course always understanding that there are and will be the inequalities that characterize labor relations). Finally, it has now been adapted, following some of the observations of the ILO Freedom of Association Committee.

In essence, the standard approved last May (Law No. 20,145) establishes five changes to the Collective Bargaining Law, some of them with enormous weight and significance for collective labor relations:

I. Exchange of information during the collective bargaining process. Legal personality of unions:

In order to exchange necessary information within the framework of collective bargaining (financial data, for example), the standard had already provided (as we said) the obligation of confidentiality regarding confidential information and responsibility for non-compliance (in article 4). However, an additional paragraph has now been added stating that, for this exchange, both organizations must have legal personality. This requirement seeks to ensure the organization's responsibility in case of failure to maintain confidentiality regarding shared confidential information.

II. Repeal of one of the competences of the Tripartite Superior Council:

Its competence to set the level at which the parties would negotiate has been repealed. This restores the freedom for the determination of the negotiation level to depend entirely on the will of the social actors.

III. Elimination of the obligation to negotiate with the higher-level union in the absence of a company union:

As analyzed, this was one of the major weaknesses of the 2009 Collective Bargaining Law negotiation system. With its modification, workers collectively (even without a union) can finally negotiate directly with their employer in the company, without interference from branch unions. Ultimately, the new standard now allows that, if the branch union is not represented in the company, its workers can negotiate a collective agreement by designating their representatives. At this point, it should be mentioned that this eventual agreement could in no case establish conditions inferior to those enshrined in the awards and agreements agreed upon in the Wage Councils of the sector.

IV. Validity of the collective agreement. Repeal of "Ultraactivity" by default:

Article 17 of Law No. 18,566, which established the "ultrativity" of collective agreements, has been repealed. The duration or term of future agreements becomes a matter solely within the parties' competence. If a term of validity is agreed upon, the agreement will expire at the end of it, unless the parties expressly agree to its extension. The principle that governed the previous standard has been reversed (if the parties said nothing, it was understood to be extended until a new agreement replaced it).

V. Mandatory publication of the Agreement:

Finally, the Law clarifies that the process of registration and publication in the Official Gazette of collective agreements and other resolutions adopted by the Wage Councils does not constitute any requirement for authorization, approval, and/or approval by the Executive Branch. This is consistent with what doctrine has repeatedly pointed out, regarding the non-existence of the homologation institute of collective agreements and translates into an agreement being able to come into effect (with validity throughout the national territory) even without the approval of the Ministry of Labour and Social Security.

Montevideo, July 2023.