Industrial employment adviser: manage the complexity of your manufacturing workforce

Employment relations in industry: collective bargaining as a strategic factor

Manufacturing and industrial companies have a distinguishing characteristic: the strategic importance of collective employment relations. The collective agreement determines labour costs, operational flexibility, and the ability to adapt the workforce to production cycles. Management of trade union disputes can halt production. And when the economic cycle requires capacity reduction, a collective redundancy or temporary suspension that is not correctly handled becomes a source of mass litigation.

At BMC we advise manufacturing companies — from medium-sized industrial plants to large industrial groups with multiple sites — on all dimensions of employment relations: collective agreement negotiation, ERE and ERTE management, trade union disputes, strikes, and works council relations.

Company-level agreement: the instrument of flexibility

Since the 2012 labour reform, the company-level agreement takes priority over the sectoral agreement on the matters most relevant to production flexibility: working hours and their distribution, shift systems, and occupational classification. A manufacturing company that correctly negotiates its company-level agreement can have significant flexibility in distributing working time — hour banks, irregular hours, work on public holidays with compensation — that the sectoral agreement does not provide.

We advise management throughout the negotiation process: from analysis of comparable sectoral agreements to drafting the final agreed text, including negotiating strategy and cost assessment of each trade union proposal.

Collective redundancy in industrial environments: process and strategy

Collective redundancies in industrial companies have specific characteristics that complicate the process: large workforces with high average seniority, well-organised works councils, media coverage in communities where the company is a significant employer, and potential impact on the local supply chain. A rigorous economic justification memorandum supported by solid data, and a negotiating strategy that allows for the possibility of agreement, are the key elements of a collective redundancy with the least possible litigation and cost impact.

Strike management: preparation and response

A strike is the most powerful pressure instrument available to trade unions in the industrial sector. A strike at a production plant can cause disproportionate economic damage in a matter of days. Preparation — knowing strike law, having clear procedures for minimum services, communicating correctly with clients and the press — is as important as managing the strike once it has been called.

The 2022 labour reform in manufacturing: what changed and what it means

The 2022 labour reform (RDL 32/2021) introduced fundamental changes to the contract landscape that affect manufacturing companies directly. The most significant change was the abolition of the ordinary fixed-term contract (contrato por obra o servicio de determinada duración) as a general tool — it can now only be used in the construction sector under the CGSC conditions. For manufacturing companies that previously used fixed-term contracts to staff production peaks, the reform forces a choice between two remaining options: the production-circumstances contract (a maximum of 90 days per year in 2023, reducing to 60 days) or the fixed-discontinuous contract (for activities with regular but seasonal or cyclical patterns).

This change has significant implications for workforce planning. Manufacturing companies with seasonal production cycles must now assess whether the fixed-discontinuous contract (contrato fijo-discontinuo) is the correct structure for their recurring temporary needs. The fixed-discontinuous contract creates an employment relationship that is formally permanent but activated only when the worker is called up — workers can be called and returned to inactivity according to the production schedule, but they accumulate seniority continuously and have social security protection during inactive periods.

Remote work and digital disconnection in manufacturing

The 2021 Remote Work Act (Law 10/2021) requires employers to conclude a written remote work agreement with any employee who works remotely for more than 30% of their time over a 3-month reference period. For manufacturing companies — where production-line workers cannot work remotely but administrative, management, and technical staff can — this creates a two-tier compliance situation.

Administrative and technical staff on remote arrangements require: a written remote work agreement formalised before the arrangement begins, compensation for expenses directly generated by working from home (internet, electricity, materials), an inventory of equipment provided by the employer, and documented digital disconnection rights. The remote work agreement must be registered with the employment authority (SEPE).

Digital disconnection is a specific obligation under Article 88 of the Data Protection Act (LOPDGDD): the employer must adopt an internal policy defining the conditions under which employees can disconnect from work digital tools outside working hours. For manufacturing companies with 24/7 operations where managers and technical staff may be contactable at any time, defining and enforcing these boundaries is a compliance and cultural challenge that BMC advises on.

Equality plans and pay transparency in manufacturing

The pay transparency requirements of RD 902/2020 on Equal Pay are among the most onerous for manufacturing companies, where historically male-dominated production roles coexist with mixed-gender administrative and technical functions. The equal pay audit required for companies with equality plans must include: a job inventory with objective descriptions of each role, a pay-determining factors analysis to identify the criteria that determine pay for each role, and a comparison of pay levels for equivalent roles occupied by men and women.

The most common finding in manufacturing company pay audits is that production roles — predominantly male — have informally accumulated supplements (working condition supplements, personal supplements, seniority) over decades of collective bargaining that are not reflected in the job description, creating a structural pay gap that is legally defensible only if documented in the collective agreement. BMC prepares equality plan pay audits for manufacturing clients, identifying gaps and proposing remediation measures that comply with the legal requirements.

Social Security compliance for manufacturing companies: key risk areas

Manufacturing companies with complex workforce structures — direct employees, temporary agency workers, self-employed contractors — are subject to enhanced Social Security scrutiny from the ITSS and the TGSS. Key risk areas include:

Self-employed contractor misclassification. Manufacturing companies that use freelance workers or self-employed contractors for production activities that are integral to the company’s ordinary business operations risk ITSS reclassification as employment relationships, with retrospective TGSS contributions, IRPF withholding obligations, and Social Security benefit surcharges. The ITSS applies the criteria of Article 1.1 ET — dependency and work carried out for account of another — regardless of the contractual form.

Temporary agency workers and in-house deployment. Temporary agency workers (trabajadores de ETT) can only be deployed for the limited grounds permitted by Article 17 of Law 14/1994 — temporary increase in activity, exceptional circumstances, or to replace a worker with right of re-instatement. Using ETT workers as a structural substitute for direct employment generates TGSS and ITSS exposure. BMC audits the deployment of ETT workers for manufacturing clients against the permitted grounds.

Occupational health and safety in manufacturing: the compliance minimum

Manufacturing companies have the most extensive occupational health and safety obligations in the Spanish employment system, governed by the Ley de Prevención de Riesgos Laborales (LPRL) and its implementing regulations. The key compliance obligations for manufacturing companies include:

A written risk assessment covering every workstation and production activity, updated whenever conditions change. A prevention plan documenting the company’s OHS management structure and procedures. Health surveillance — periodic medical examinations for workers exposed to occupational hazards, with results maintained in a confidential health file. Training on specific hazards at induction and when hazards change. Safety equipment provision and documentation of delivery.

The Prevention Services Regulation (RSP, RD 39/1997) requires manufacturing companies above certain size thresholds to establish an internal prevention service or contract an external accredited prevention service. Companies with over 500 workers (or over 250 if the activity is particularly hazardous) must have an internal prevention service with dedicated OHS staff. BMC reviews manufacturing company prevention plans for legal compliance and advises on the preventive structure required by the company’s specific size and activity profile.

Restructuring a manufacturing workforce: ERTE vs ERE options

When production overcapacity requires a structural workforce reduction, manufacturing companies must choose between ERTE (temporary) and ERE (definitive) approaches. The choice depends on the expected duration of the business situation and the company’s medium-term workforce plans.

An ERTE is appropriate when the overcapacity is expected to be temporary — a market cycle, a supply chain disruption, or a temporary production halt for equipment upgrade. The ERTE preserves the employment relationship and the Social Security continuity of affected workers, avoids severance costs, and allows rapid reactivation when conditions recover.

An ERE is appropriate for permanent structural changes — plant consolidation, technology replacement eliminating roles, or market exit. The ERE requires a genuine consultation process with works councils, justified by economic, technical, organisational, or production grounds. A collectively agreed ERE significantly reduces litigation risk. Workers receive 20 days per year of service (up to a maximum of 12 monthly payments) as severance under a collective redundancy.

BMC advises manufacturing companies on the strategic choice between ERTE and ERE, manages whichever process is selected, and negotiates the social measures (outplacement, enhanced severance) that make collective agreements possible.