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In October 2002, debate intensified in Portugal over the government's proposal for a Labour Code, which would replace most current labour legislation by bringing existing provisions together in a single text. At the same time, current provisions would be amended in a variety of areas, including employee representative structures, collective bargaining procedures and dispute-resolution mechanisms. Indeed, the proposed Code could result in the most sweeping changes to Portuguese industrial relations, and especially collective bargaining, for nearly 30 years. While employers generally support the proposals, trade unions are strongly opposed, and the possibility of a general strike has been raised.
In autumn 2002, Portugal is in the throes of a major public debate on the preliminary draft of a Labour Code (Código do Trabalho) proposed in July by the coalition government of the centre-right Social Democrat Party (Partido Social Democrata PPD/PSD) and the right-wing People's Party (Partido Popular, CDS/PP) (PT0208101N). The new Code aims to bring together in one document a large number of aspects of labour law, while amending a number of them - Portugal currently has no such codified set of labour legislation The preliminary draft of the Code comprises 687 articles relating to both individual and collective labour law.
Public debate began on the proposal at the start of September, and government bodies have expressed their satisfaction that the version of the preliminary draft placed on the Web has been very widely consulted. Discussion of the proposed Code relates mainly to: its formal aspects (for example, there are no introductory texts to the preliminary draft or details of who wrote it); the process and basis for discussion; and its content. The tripartite Standing Committee for Social Concertation (Comissão Permanente de Concertação Social, CPCS) held meetings on the issue throughout October. The first half of the month involved meetings with social partners and specialists, and over the second half of the month a joint political discussion took place. A formal draft of the Labour Code was due to be drawn up in November.
Collective rights provisions
The proposed Code brings together provisions previously contained in a number of laws. The part entitled collective rights - Articles 413 to 687 - would govern the following matters:
Changes proposed
The preliminary draft Code's collective labour law provisions have been intensely debated. It is proposed that some of these provisions should be substantially changed in comparison with current legislation, and these have been particularly keenly debated.
On the issue of employee representative structures, the main substantive changes proposed are that:
- workers' commissions should be given powers to enter into 'general company agreements' (acordos gerais de empresa) - ie collective agreements with features not found in the current Portuguese collective bargaining system - in cases where trade unions do not exercise these powers; and
- the time off to which members of workers' commissions are entitled in order to carry out their duties should be reduced from 40 to 20 hours a month.
As to the collective bargaining process and dispute-resolution mechanisms, it is proposed that:
- mandatory arbitration, which would be formally enshrined in the proposed Code, would become an element of collective bargaining, rather than just a dispute-resolution mechanism. It is proposed that, if there is no new agreement within one year after a collective agreement has expired, either of the parties may call for arbitration. This would differ considerably from the current situation, whereby if either bargaining party opposes the negotiation of a new agreement on employment conditions, the provisions of the previous agreement remain in force;
- a 'relative industrial peace' clause would be introduced, setting out a mandatory requirement for the parties to respect the content a collective agreement for as long as it is in force;
- trade unions would have civil liability for illegal strikes; and
- the procedures on strikes in essential services would be amended, with a definition of the minimum level of service and rules on non-compliance.
Government's position
The Minister of Social Security and Labour expressed the government's view that the proposed new collective labour law measures in the Labour Code are aimed at revitalising collective bargaining, which is in some decline at present ( PT0208102F). In early October 2002, the Secretary of State of Labour emphasised that the preliminary draft of the Code might be adapted during the following two months of negotiations, and hoped that all of the parties involved would make valid contributions. However, he noted that the stances of trade unions and employers were moving increasingly apart. In an interview, he said that one of the points that would not be changed was the new structure for the collective bargaining system.
Trade union positions
Both the main trade union confederations - the General Confederation of Portuguese Workers (Confederação Geral de Trabalhadores Portugueses, CGTP) and the General Workers' Union (União Geral de Trabalhadores, UGT) - have held internal meetings on the proposed Labour Code and have made their public positions known. The points on which they focus are very similar. For the CGTP:
- the changes which the government wishes to introduce in the area of strikes are a source of uncertainty and will lead to conflict with the unions. The most ambiguous issue is that of unions’ civil liability in the case of illegal strikes, as it is not clear if companies would be able to request compensation from unions. CGTP regards this as a form of pressure on employees’ representatives; and
- the new code will cripple collective bargaining, because it encourages its replacement by individual employment contracts by imposing an expiry limit on collective agreements after two years, and the provisions of collective agreements could be be amended after two years by means of any other agreement, including an individual contract.
UGT union believes that the proposed new Code:
- would endanger union rights and collective bargaining. Furthermore, it is unconstitutional, being an attempt to divest unions of their purpose, by granting workers' commissions powers to enter into collective agreements;
- would turn back the clock in industrial relations terms, as it proposes that existing collective agreements be made of limited duration;
- fails to clarify certain aspects concerning referral to mandatory arbitration, such as selecting the arbitrators, overseeing the process, and financial support for the procedure; and
- would permit no negotiation on the expiry of collective agreements, where no new agreement is reached. Given the difficulty in reaching agreements in negotiations, the current system enables the current agreement to remain in force until replaced by another. The unions argue that employers often impede collective bargaining and do not act in good faith .
CGTP and UGT have held joint meetings, and may take joint action, including a possible general strike. CGTP says that it is still participating in working meetings with the government, but doubts that changes will be made to what it regards as the essential points of the new Labour Code. The level of opposition which UGT is planning to raise will depend on the government’s willingness to talk. One of UGT’s priorities is to reach a consensus on any changes to labour law.
Employers' positions
Employers agree with the principles behind the preliminary draft. Representatives of the Confederation of Portuguese Services and Commerce (Confederação do Comércio e Serviços de Portugal, CCP) and the Confederation of Portuguese Industry (Confederação da Indústria Portuguesa, CIP) have stated that the draft does not go as far as it should. The Portuguese Business Association (Associação Empresarial de Portugal, AEP) says that the preliminary draft fails to deal with a number of 'taboos' that resulted from the gains made for workers in the 1974 revolution. Representatives of the Portuguese Agricultural Confederation (Confederação da Agricultura Portuguesa, CAP) state that this is a unique opportunity to tailor Portuguese society to the world economy.
Experts' views
According to the government, the preliminary draft of the Labour Code was discussed in advance with leading experts in Portuguese labour law, but so far few of the views expressed by academics specialising in the industrial relations sphere have been made public. Where industrial relations and labour law researchers have made their positions known, their claims have included the following:
- throughout the Code there is a watering down of the collective setting of employment conditions;
- the 'European social model' does not always guide the proposed new form of employment relations, with no emphasis on participation, social dialogue and collective bargaining;
- more account could have been taken of Portuguese and European case law;
- at some points, the proposed Code breaches the Portuguese Constitution and certain EU Directives;
- the collective bargaining system would be weakened. It would be transformed from a system in which the collective agreement is an instrument of social progress, because it is not permitted to establish conditions through collective bargaining that are less favourable than those that already exist or are enshrined in law, to one in which it is possible to replace the provisions of a collective agreement with an individual contract of employment;
- as it would be possible for a collective agreement to expire, this might lead to a weakening of bargaining. This would mean moving away from the European model of collective bargaining - more specifically the 'continental' model based on self-regulation of the employment relationship and social dialogue;
- the proposed Code does not contain any provisions on criteria for establishing the representative nature of the social partners, and absence which is regarded as one of the great weaknesses of the Portuguese industrial relations system; and
- under the proposal, administrative intervention in resolving collective disputes would be increased, including through the use of mandatory arbitration, and this would be regularly used as a way of overcoming an impasse in collective bargaining, instead of strengthening the existing mediation and conciliation services.
Commentary
Portugal is in the midst of one of the widest-ranging debates it has undergone in recent decades on the subject of industrial relations. The debate has involved the social partners, academics and other institutions. Initially, it was not a debate that involved great theoretical considerations, or solutions that dovetailed with innovative social aspects, but rather it was an ideological debate and a trial of strength, with those expressing themselves for or against the proposed Labour Code.
The preliminary draft of the Labour Code contains proposals for the most sweeping changes to industrial relations in Portugal since the period following the 1974 revolution. They foreshadow a profound alteration to the mechanisms of collective bargaining and to the bases underpinning the institutions that have hitherto governed the labour market in Portugal. (Célia Quintas and Maria Luisa Cristovam, UAL)