Collective bargaining is governed in Uruguay by the Collective Bargaining Act (Law Nº 18.566 of 11 September 2009), providing for salary council negotiations but also bargaining at all labour law levels.

The International Labour Organisation ('ILO') in mid 2019 urged the Uruguayan government to make some changes to the rules governing the system of collective bargaining in the private sector, as some aspects of Uruguay's regulations were not considered to be in line with labour freedoms and international labour conventions ratified by Uruguay.

The main objection is that Law No. 18.566 undermines the free and voluntary nature of collective bargaining, as regulated in International Labour Convention No. 98, as it makes it compulsory to negotiate certain subjects, with certain subjects and in certain ways, when in the light of the aforementioned Convention, it is the social actors (professional organisations or workers and employers) who must choose to negotiate these subjects with whomever they consider and freely.

In this context, on 2 May 2022, the Executive submitted a draft law to Parliament, which includes the main observations made by the ILO.

The proposed main changes are the following:

• employers' and workers' organisations must have recognised legal status, aiming to ensure that, in the event of non-compliance with the duty of confidentiality in the treatment of confidential information by the respective organisations, they may be held liable;
• the level of collective bargaining is determined by the parties involved and not through the intervention of the Tripartite High Council;
• in the absence of a trade union organisation at the company level, as the entity entitled to negotiate with the employer, the legitimacy to negotiate will fall to the most representative organisation at a higher level;
• it repeals the effectiveness of collective agreements even after their expiry until the entry into force of the next agreement;
• it aims to ensure that only the control of compliance with legal minimums and formal aspects of collective agreements is carried out in the registration and publication procedures. The registration and publication of resolutions of wage boards and collective agreements is not a requirement for authorisation, approval, endorsement or approval by the Executive.