Impact of the agreement on construction

One Hundred and Twenty Days of Conflict and a Unanimous Agreement

On Friday, August 14, 2026, the Wages Council for Group No. 9 "Construction Industry and Complementary Activities," Subgroup 01, unanimously approved the agreement for the 11th Round. It did so after the longest and most visible negotiation of this round: more than 120 days of talks, with more than eleven formal meetings at the Ministry of Labor and Social Security (MTSS), in addition to the bipartite negotiations between the National Single Union of Construction and Annexes (SUNCA) and the business chambers of the sector (APPCU, the Uruguayan Construction League, and CICE).

The core of the conflict was the reduction of the working day. SUNCA demanded a reduction from 44 to 40 hours per week without salary reduction, citing quality of life and the high accident rate in the activity. The chambers understood that a reduction of that magnitude implied a significant increase in costs and that, if accepted, it should be implemented gradually or accompanied by improvements in productivity. Added to this were differences over the level of salary adjustments.

The negotiation also had a corollary of open conflict. On July 1, there was a 24-hour national strike, and the union resolved to limit work to normal hours, eliminating overtime until an agreement was reached. During the month, union measures intensified, especially in the east of the country, with actions of strong economic impact, such as the sudden interruption of concrete unloading. By the end of July, more than two hundred workers in the sector had been sent to unemployment insurance, which generated cross-complaints: SUNCA argued that some companies used this tool as retaliation for the conflict, while the business sector attributed it to the paralysis of the works itself.

The MTSS called several meetings, and then the negotiation moved to a bipartite format between the union and the chambers. This format was what finally unblocked the agreement, voted unanimously in articles 1 to 24 and by majority (with the abstention of the Executive Power delegation) in the adjustment formula of articles 26 and 27.

Reduction of the Working Day without Salary Loss

The agreement is effective nationwide for the entire Group 9 Subgroup 01, with a term of 60 months: from April 1, 2026, to March 31, 2031.

In terms of salary, the first installment sets an increase of 5.17% from April 1, 2026 (quite above those suggested by the Executive Power). The subsequent installments (2027, 2028, 2029, and 2030) are calculated with a formula that combines an incremental inflation correction (according to the Consumer Price Index, CPI, of the previous period) with a guideline that, from 2028, becomes the inflation target set by the Central Bank of Uruguay (BCU) together with the Ministry of Economy and Finance (MEF) plus 0.70 points. The agreement adds, at the close of the agreement, two real wage verifications (on March 31, 2030, and March 31, 2031) that oblige the adjustment to be completed if the real index falls below an agreed floor.

The point that will focus attention, however, is the reduction of the working day, which is reduced from 44 to 40 hours per week progressively and staggered, without salary loss. The schedule is as follows: a) From August 30, 2027, the week goes to 43 hours. b) From May 1, 2028, to 42 hours. c) From May 1, 2029, to 41 hours. d) From January 28, 2030, to 40 hours, also incorporating the 44x36 regime (one week of 44 hours and the next of 36) as an option.

In each company, the specific way to implement the reduction (one less hour from Thursday to Monday, or up to 4 fewer hours on Friday) is at the discretion of the company, and the hours arising from the reduction can only be worked by mutual agreement between the worker and the company: neither of the two parties can impose them unilaterally. The agreement clarifies that it will not be mandatory to work beyond the reduced hours.

With or without salary loss? Without loss. The agreement itself expressly states it: payment is made based on the agreed working day reduction, not the hours actually worked. In practical terms, the adjustment formula agreed upon in article 27 incorporates, for each stage of the reduction, an additional increase in the hourly rate and the food voucher (1.82% in 2027, 1.87% in 2028, 1.93% in 2029, and 1.99% in 2030), calculated precisely to compensate for the hours that are no longer worked. This is the result that SUNCA demanded since the beginning of the conflict, implemented gradually until 2030, which was the variable the chambers requested. The assumption of the salary cost of the adjustments agreed upon in the agreement depends on two variables: W (the salary increase coefficient for each year) and T (the price transfer). Article 4 of the agreement establishes that the adjustments voted unanimously (MTSS, workers, and employers) in the Wages Council can be transferred to prices with the formula T=W. However, the impact of the value of the working day reduction (variable R), established in article 27, eliminates the price transfer (nullifies variable T), so the increase in the hourly rate is absorbed by the companies.

Other Changes

The agreement brings a set of new benefits, several with their own budget funded by the Construction Social Fund (FSC); the duplication, starting in April 2028, of the provision of work clothes; more weekly hours for safety delegates' site visits; one paid hour per semester for mental health activities; new distribution of contributions among the sector's social funds (49% to the FSC, 33% to FOCAP, and 18% to FOSVOC). A commission is also created to analyze the feasibility of a special retirement calculation for the industry, and the parties commit to promoting a legal reform of the Unemployment and Retirement Fund (FOCER) to eliminate the one-year waiting window between withdrawals. In addition, the bipartite and tripartite commissions of the sector are reactivated, which in the next ninety days must address various issues, and the compensations and benefits of previous agreements are ratified. In terms of employment, the system for promoting entry into the industry that has been in force since the 10th Round is extended to the department of Canelones (excluding the metropolitan area), with differentiated quotas by category and half of those quotas reserved for women and the collectives DI.NA.LI., INISA, and PRONADIS.

The agreement includes a standard peace clause, and orders the payment of back wages from April to July 2026 in three installments, between August and September of this year.

Scope

The agreement is binding, with erga omnes effect, on all companies and workers of Group 9 Subgroup 01 throughout the country, with the sole exception of managers, professionals, directors, and general area chiefs.

This brings up the first question worth asking: Is this a fair agreement for the industry's SMEs? Construction is not a homogeneous sector. Large developers and construction firms with their own administrative structures coexist with small and medium-sized enterprises, often subcontractors, with much tighter margins. The agreement does not provide for opt-out mechanisms for companies that may have difficulties meeting the agreed package (salary increase, working day reduction with salary maintenance, and new allocations to social funds), nor differential adjustments based on company size or turnover.

This is not a specific criticism of this agreement: it is a structural characteristic of how Wages Councils negotiate in our country, where the branch sets conditions "from above" and assumes that they serve everyone equally, with no room for the real situation of each company to influence the result.

This question connects directly with another: whether the agreement is in line with what the International Labor Organization (ILO) has been demanding of Uruguay. In June of this year, the ILO Committee on the Application of Standards again included Uruguay among the cases it examines and urged the government to modify article 12 of Law No. 18,566, which since 2009 made the negotiation of two competencies in the Wages Councils compulsory that were previously voluntary: the general adjustment of remunerations and the regulation of "other working conditions." For the ILO, this obligation, with the intervention of the Executive Power, is not compatible with article 4 of Convention No. 98, which requires collective bargaining to be free and voluntary.

The agreement analyzed illustrates quite precisely what the ILO questions, because the reduction of the working day is a working condition. And it was negotiated exactly where the organization says it should not be negotiated obligatorily: in a Wages Council, with the Executive Power integrating the table. None of this means that the result is bad for construction workers, who achieved something they had been demanding for a long time. It means that the mechanism by which it was achieved is precisely the one the ILO asks to stop using for these types of matters, in favor of a bipartite and voluntary negotiation, at the branch or company level. The paradox is not minor: while the country negotiates with the ILO how to exit the list of cases the Committee examines, one of its most visible Wages Councils once again demonstrates how much weight this sphere carries in defining, on a mandatory basis, how the working time of an entire sector is organized.

When the Benefits Will Take Effect

The application of the working time and salary components established in this agreement will begin to be seen with the implementation of the first hour of reduction, in August 2027. It will not be until January 2030 that the agreed scheme of 4 hours per week is consolidated: only then will the schedule for the reduction of the working week be completed, and with it, the full scope of the benefits. To have a comprehensive analysis of the impact of this novel agreement, it is essential to include variables such as employment, corporate investment, and the cost per square meter of construction. As noted, the impact of the working day reduction will be absorbed by companies, which will not be able to transfer it to prices by incorporating variable R (reduction hours) in article 27 and eliminating variable T (price transfer).

Considerations

The real scope of the agreement's impact—and the answer to whether or not it was a good agreement, beyond the immediate positive impact for active workers—will be determined, among other things, by the behavior of the variables private investment, employment numbers, and the cost per square meter of construction.

But it will not be contained within the construction sector. The Superior Tripartite Council has been discussing a general reduction of the working day, from 48 to 40 hours per week and without salary loss, since the beginning of the year, promoted by the PIT-CNT and the Confederation of Industrial Unions under the slogan "More time, more life." The precedent set by the construction sector is difficult to ignore in that discussion: if SUNCA achieved a reduction in the working day without salary reduction in its Wages Council, it is expected that other unions will seek something similar in theirs, even if there is not yet a law on the matter.

The construction sector has been acting as a benchmark sector in this round: it set the pace of the conflict with the July strike and the extension of the negotiation, and now it may also set the content of the agreements. It is advisable for companies in other sectors, especially those already facing union demands regarding working time, to closely follow how this staggered reduction is implemented, because it is likely to be the reference used at the table when it is their turn to negotiate.