A general agreement is an agreement between employers’ organizations and workers’ unions which sets the standard minimum rules across the industry. The Government is not in the position to provide for detailed regulations covering all the issues of every industrial sector. A general agreement, therefore, is an excellent opportunity for social partners to set their own rules without waiting for the Government to adopt the legal framework. Such an agreement is a key instrument for regulating the sector’s economic operation. It enables the two parties operating in the market, namely, the employers and the employees, to come to terms on aspects essential to the industry: remuneration, legal arrangements, working hours, production processes, the required qualifications and training, etc.
As a tool, a general agreement works to reduce informal economy; it promotes social equity and fair distribution of profits in the industry, ensuring that workers benefit from their share of productivity gains without compromising the employer's ability to earn a profit.
The General Agreement for the Building Industry
It has been concluded between the Latvian Building Sector’s Trade Union and three employee organizations and their members: Partnership of the Latvian Building Contractors, the Latvian Builders’ Association, the Latvian Road Builders, and assorted companies.
It has been concluded for the period from November 3, 2019 until December 31, 2025 and covers all the employers and employees within the construction sector. The Agreement provides for a projected wage growth setting the minimum wage at 780 EUR per month and a monthly education benefit of 5 % (39 EUR) for any job-relevant training. Employers, on the other hand, will be entitled to define a 6 months’ summary working time accounting period and to compensate for overtime at 50 % of the wage amount.
The right to collective bargaining is an internationally recognized fundamental right. It has been warranted under the following conventions adopted by the International Labour Organization (ILO): No 87 – Freedom of Association and Protection of the Right to Organise; No 98 – Application of the Principles of the Right to Organise and to Bargain Collectively; No 154 – Promotion of Collective Bargaining; No 135 – Workers' Representatives, and the following ILO recommendations: No 91 – Collective Agreements’ Recommendation; No 163 – Collective Bargaining Recommendation.
The right to join trade unions and conclude collective agreements is also enshrined in Article 11 of the European Convention on Human Rights, Article 6 of the European Social Charter and Article 28 of the Charter of Fundamental Rights of the European Union.
At national level, the Constitutional Assembly of Latvia established the right to a collective agreement as far back as on February 15, 1922 when it was stipulated in Article 108 of the Satversme (Constitution) which states that “Employed persons have the right to a collective labour agreement, and the right to strike. The State shall protect the freedom of trade unions.” The content of the collective agreements, the parties to the agreement, the procedure for its conclusion and amendment, as well as other matters are governed by Articles 17 to 24 of the Labour Law.
This description is based on the expert conclusion of Natalia Preisa: