The Institute recognized the section 8.1 unions as exclusive bargaining partners for workers within their respective collective agreement units and entered into written collective agreements with each of them. The Institute has thus accepted the principle of collective setting of wages, working time and conditions of employment, which must be applied according to the principles of the bilateral contractual agreements to which the institution is associated. The Institute concludes these agreements in good faith and it is its policy and its intention to stick to the letter and spirit of the agreements. Each supervisor/manager should become familiar with the provisions of the workers` agreements in their area of expertise. Unlike such restrictions, the law also provides for certain binding elements that a collective agreement must contain (Article 23, paragraph 1): the identity of the signatory parties, the extent and scope of their application, and the day they are signed. In addition, explicit pay levels for all occupations and categories need to be included in the pay scales (Article 23, paragraph 2). Portuguese law distinguishes three types of collective agreements according to the nature of the signatories on the employer side (Article 2, Collective Labour Relations Act): association agreements negotiated by employers` organisations; multi-employer agreements negotiated by a number of employers who, whether or not they are members of employer organizations, do not act through any association to negotiate the agreement in question; Agreements concluded at the company level by a single employer. This distinction is used by law to resolve specific conflicts between collective agreements (see also collective bargaining: level of bargaining, instruments of collective labour regulation). Another legal distinction, based on the different nature of the scope of collective agreements, is defined by horizontal and vertical agreements (see below). Many employment contracts are partly or entirely made up of conditions obtained collectively through bargaining with a union.
Such collective agreements may be incorporated into the employment contract by explicit registration or sub-treated by law. As soon as a union obtains express permission from its members to act on their behalf as an agent, any agreement with the employer is included in each employment contract. For example, in the context of the 1996 ERDF, collective agreements are provided that replace the legal provisions on the right to unfair termination or the right to legal compensation. If the Secretary of State accepts the collective agreement, the terms negotiated between the union and the employers will replace the conditions created and provided for by law. Continuity of the Effects of Collective Agreements The normative effect of collective agreements means that their provisions automatically replace provisions in individual employment contracts that are less favourable to workers (Article 14 of the Employment Contracts Act).