Trends in pay, working time and collective bargaining

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A study of pay and working conditions in Portugal in 1997, published by the Ministry of Labour and Solidarity in autumn 1999, reveals a picture of relatively high collective bargaining coverage, falling working time and increasing pay differentials.

In autumn 1999, the statistics department of the Ministry of Labour and Solidarity published a study on pay and employment conditions in Portugal in 1997. The study covers 205,231 companies.

Collective bargaining

Of the 2,266,491 people working in the establishments included in the study (out of a total active population of 4,770,000), 88% were covered by some form of collective regulation of their employment conditions (PT9802164F). Of the workers concerned:

• 86% were covered by a sectoral association agreement (contrato colectivo de trabalho), or extension directive (portaria de extensão);
• 2.7% were covered by ministerial orders, which are used when other options are not viable; and
• 9% were covered by a company-level agreement (acordo de empresa) or multi-employer agreement (acordo colectivo de trabalho).

Compared the 1997 figures with data from 1993, which showed figures of 84.2%, 4.8% and 11% respectively, we see a trend, though slight, toward increasing negotiation of sectoral agreements, with a accompanying decline in company-level agreements (PT9901123F) and more direct state intervention.

Working time

The study looks at the length of working time in Portugal, analysing full time and part-time workers - who accounted for 9.1% of all workers covered - separately. The normal weekly working hours for full-time employees were as follows:

Working time was longest in:

• hotels and restaurants, with 59.5% of all employees working between 40 and 44 hours weekly; and
• leather work and shoemaking, with 56.9% working between 40 and 44 hours.

Working time over 44 hours per week occurred most frequently in the textile industry and vehicle repair, where 5.6% and 5.3% of all employees respectively worked over this level

A comparison between the length of working time in 1993 and in 1997, the year that legislation introducing a 40-hour working week came into force (PT9712154F), shows a clear change in the situation in response to the law, as the table below indicates.

Overtime

The study states that only 8% of workers performed overtime in 1997, with the average number of overtime hours standing at 4.6 hours per week. The breakdown of overtime was as follows:

• the sectors contributing most to the overtime figures were manufacturing industry, commerce and transportation. In the first two sectors, the percentage of women working overtime (24%) was much higher than that of men (9%);
• the greatest average number of overtime hours was found in the extractive industries, at 7.3 hours per week; transportation, at 6.6 hours, and machine-rental services, at 6.4 hours; and
• the occupational groups that contributed most were supervisors, with 12.2% working overtime, and skilled workers, at 12%.

It should be noted that some groups of workers, especially managers, are paid a flat-rate salary no matter how many extra hours they work.

Pay

The study presents a descriptive analysis of pay and earnings in Portugal as well as a comparison between different time periods. Key findings include the following:

• a comparison the difference between basic pay (the gross amount that corresponds to the pay for normal working hours) and actual earnings (the sum of the basic pay plus any earnings related to length of service, overtime hours and other regular payments) shows that, on average, workers' earnings in Portugal were around 19.4% higher than their basic pay;
• the highest pay was in the areas of electricity, water and gas (65% above the national average) and activities related to finance (75% above the national average);
• the 1997 "salary range values" - that is, the difference between average salaries for upper management and those of unskilled occupations - were 4.4 with respect to basic pay (ie the upper rates were 4.4 times higher than the lower ones) and 4.5 with respect to earnings; and
• at all levels of qualification, women had lower than average pay levels, by about 18% on average. The difference ranged from 4% for those starting work and apprentices to 22.8% for middle-level management positions.

If the difference between basic pay and earnings is taken into account, workers in the transportation and real estate sectors experienced the greatest annual increases in terms of earnings in 1997, at 6% and 5% respectively, with overtime pay playing a significant part.

Comparing 1993 and 1997, there was a gradual increase in the difference between basic pay and earnings, a reduction in the salary gap between men and women, and a redistribution between the different occupational categories. Notably:

• the gap between basic pay and earnings has been slowly increasing. In 1993, earnings were 16.7% higher than basic pay, whereas in 1997 the difference was 19.4%;
• the salary range values (see above) have been widening, particularly with respect to earnings. In 1993 the value for basic pay was 4.07 (compared with 4.4 in 1997) and for earnings 4.3 (4.5 in 1997);
• the average difference between women's and men's pay in 1993 was 31.4% in terms of basic pay and 39.7% in terms of earnings. The figures for 1997 were 30.3% for base pay and 37.9% for earnings; and
• the widening gap between basic pay and earnings in 1993 (16.9%) and 1997 (19.4%) has led to change in the relative position of various categories of workers. In 1993, the figures showed that the biggest differences between basic pay and earnings were among middle management (25.4%), highly skilled workers (20.6%) and upper management (19.4%). The largest differences in 1997 were among highly skilled workers (22.8%), skilled professionals (20.0%) and supervisors (21.4%), while in upper management the difference had dropped (to 17.8%). However, it is thought that upper management personnel are increasingly being rewarded through "non-regular means", such as company shares, cars or holidays.

Commentary

Studies on pay and conditions have now been conducted over several years using similar methodology, making it easier to draw comparisons and identify trends. This allows for systematic and stable analysis. Key aspects highlighted by the study include;

• the high number of employees covered by collective agreements, along with the large percentage of the active population that is not covered by any form of regulation;
• a progressive reduction in working time (at least in contractual terms) accompanied by an increase in pay; and
• increasing differentiation of pay and a wide gap between women and men. (Maria Luisa Cristovam)