Convenio colectivo de trabajo (CCT), meaning "collective work agreement" or "collective bargaining agreement," is a legally binding contract negotiated between a labor union (sindicato) and an employer or employer association. In many Latin American countries, CCTs set industry-wide employment standards that apply to all workers in the sector, even non-union members.
How CCTs Work by Country
In Argentina, CCTs are extremely influential — industry-level agreements set minimum wages, bonus structures, and working conditions for entire sectors, and most employees are covered. In Brazil, convenções coletivas are negotiated annually between unions and employer federations and are legally binding for all workers in the category. In Mexico, contratos colectivos are negotiated at the company or industry level, with recent reforms requiring worker ratification votes.
Common CCT Provisions
CCTs typically cover wage floors above the national minimum, annual salary adjustment formulas, additional vacation days, supplementary health insurance, meal and transportation benefits, overtime premium rates above the legal minimum, and severance conditions. In Argentina, CCTs can create obligations like mandatory union contributions (cuota sindical) deducted from every employee's salary.
EOR Relevance
An EOR must identify and comply with the applicable CCT for each employee based on their job function and industry. This is particularly complex in Argentina, where failure to apply the correct CCT can result in significant back-pay claims. The EOR monitors CCT updates, applies salary adjustments, and ensures all negotiated benefits are properly provided.