Can compensation be claimed for salary increases resulting from a new collective agreement in a contract governed by Law 9/2017 on Public Sector Contracts?

Context

In public contracts subject to Law 9/2017 on Public Sector Contracts, the principle of the contractor’s risk and expense generally applies. This implies that the contractor assumes the financial risks inherent in the performance of the contract.

However, this principle does not preclude the possibility, in certain exceptional cases, of requesting the restoration of the economic and financial balance of the contract. To this end, it must be demonstrated that an unforeseeable circumstance has arisen, beyond the control of the parties and with sufficient impact to seriously alter the economic terms of the contract.

Description

The judgment of the High Court of Justice of Andalusia, Contentious-Administrative Chamber, Malaga Division, Section 2, of 19 March 2026 analyses the claim made by a contractor regarding the increase in wage costs resulting from the entry into force of a new collective agreement.

In the case in question, the contract specifications had provided for an annual wage increase of 2%, in accordance with the collective agreement in force at the time of the tender. However, the new applicable collective agreement established a cumulative increase of 10% for the years 2023 and 2024, compared to the 4% cumulative increase initially estimated for that same period.

The judgment recognises the contractor’s right to compensatory damages, finding that, in that specific case, the necessary conditions for applying the doctrine of unforeseeable risk were met.

Implications

The ruling does not automatically allow for claims regarding any wage increases arising from a new collective agreement. As a general rule, such increases form part of the business risk assumed by the contractor.

However, the ruling does allow for the viability of the claim to be assessed where exceptional circumstances apply. In this case, the appropriate course of action was a request for the restoration of economic and financial balance.

The proportion of labour costs in the execution cost is also a decisive factor. In the case analysed, wage costs and other staff-related items accounted for the bulk of the base tender budget.

Furthermore, the unforeseeability of the increase must be demonstrated. The increase finally approved was substantially higher than that provided for in the contractual documentation and could not reasonably have been anticipated at the time of tendering.

The court also considers that the subsequent increase placed an excessive financial burden on the contractor. Specifically, the unforeseen additional cost even exceeded the estimated profit margin, thereby disrupting the economic balance of the contract.

Finally, it is essential to have sufficient economic evidence, usually in the form of an expert report, to demonstrate the actual impact of the increase and its effect on the performance of the contract.

Conclusions

The judgment confirms that wage increases resulting from a new collective agreement do not, in themselves, give rise to an automatic right to compensation.

However, where the increase is unforeseeable, extraordinary and results in an effective disruption of the economic balance of the contract, the application of the doctrine of unforeseeable risk may be considered as an exception to the principle of risk and venture.

The viability of the claim will therefore depend on an analysis of the relevant circumstances, the proportion of labour costs in the contract, the magnitude of the increase, and sufficient evidence of the resulting economic imbalance.