2000 Annual Review for Portugal

This record reviews 2000's main developments in industrial relations in Portugal.

Political developments

There were no elections of any kind in Portugal in 2000, following the parliamentary elections in 1999. However, intense debate took place in the National Assembly on the issue of government policy. The fact that the ruling Socialist Party (Partido Socialista, PS) has the same number of seats in the Assembly as all the other parties together, lent momentum to the debate. This was especially the case in the debate over the national budget, which almost sparked a serious political crisis. Much discussion was also generated on the need for changes to the way in which the courts function and citizens' access to the justice system. During the course of the year, a number of cabinet ministers were replaced. At the end of the year, the campaign began for the presidential elections in January 20001 (won by the PS candidate, Jorge Fernando Branco de Sampaio, with 55.8% of the vote). Portugal held the European Union Presidency in the first half of the year.

Collective bargaining

With regard to national intersectoral social dialogue and "concertation", the Standing Commission for Social Concertation (Comissão de Concertação Social, CPCS), a committee of the Economic and Social Council (Conselho Económico e Social, CES) relaunched meetings during January 2000 after a year-long hiatus (PT0001179F). These meetings involved the government and the social partner organisations with seats on the CES: the Portuguese Confederation of Industry (Confederação da Indústria Portuguesa, CIP), the Confederation of Portuguese Farmers (Confederação dos Agricultores Portugueses CAP), the Confederation of Portuguese Commerce and Services (Confederação do Comércio e Serviços de Portugal, CCP), the General Confederation of Portuguese Workers (Confederação Geral dos Trabalhadores Portugueses CGTP) and the General Workers' Union (União Geral de Trabalhadores, UGT). After the first meeting, it was announced that, rather than seeking another multi-year strategic pact - like the 1996-9 Strategic Concertation Pact (Pacto de Concertação Estratégica, ACE) (PT9808190F) - concertation would be accomplished by means of agreements on specific topics, with the exception of incomes policy. Within this process (PT0008103N), towards the end of the year, progress was made towards agreement in four areas: employment and training; health and safety; social security; and productivity.

As for collective bargaining proper, a total of 331 collective agreements were concluded during the first three quarters of 2000 - see table 1 below. This compares with a total of 398 agreements in 1999. There was an increase in the proportion of multi-employer (ie covering more than one company, but not signed by an employers' association) and company-level agreements in 2000 – these agreements made up 34.4% of accords in 2000, compared with 30.9% in 1999.

Source: General Directorate for Working Conditions ( DGCT ) bargaining report.

Collective bargaining in Portugal is widely perceived to be overly formal, subjective to excessive state intervention through legal regulation, lacking in coherence, poor in content and lacking in innovation. The debate on these problems continued in 2000, but without any firm conclusions being reached on the way forward (PT0002183F and PT0011122F).

Pay

Basic collectively agreed pay increased by an average of 3.9% in the year to November 2000 in nominal terms and 1.8% in real terms. This compared with an increase of 3.7% in nominal terms and 1.1% in real terms in the year to December 1999. According to the trade unions, the fact that inflation in 2000 was higher than predicted by the government undermined the pay increases agreed. The Bank of Portugal, in its end-of-year report for 2000, advised pay moderation in 2001. This sparked adverse reactions from trade unions, primarily CGTP, which argues that Portuguese pay needs to be brought more into line with the European Union average and that low pay persists in many areas.

The Ministry of Labour and Solidarity's General Directorate for Working Conditions (Direcção Geral das Condições de Trabalho, DGCT) recorded 1,430 pay-related changes to collective agreements in the first three quarters of 2000. Changes to wage scales accounted for a high percentage of these changes (23%). After wage scales, meal allowances continued to be the type of payment that is most often reviewed in collective agreements, representing 20.2% of the changes made. Cash-handling and travel allowances also figured strongly, accounting for 13% and 10.2% of the total respectively.

Working time

According to DGCT, there were 93 recorded changes to collective agreements related to the length of working time during the first three quarters of 2000. Of the total, issues related to holidays accounted for 34.4%, normal working time for 24.7% and adaptability/flexibility of working time for 22.5%.

The issue of working time was largely debated in 2000 in the context of skills development. In terms of the length of the working week, there has not been significant public debate since the publication in 1996 of legislation providing for a 40-hour week. However, a number of sectors are now negotiating gradual reductions in working time, such as a 39-hour week in 2001 in ceramics production and a 38-hour week for administrative employees. A number of agreements increase annual leave entitlement to 25 days and allow a certain flexibility, taking into consideration issues such as the worker's age and the time of year at which holiday is taken. Annualised hours systems are still relatively rare – working time is usually calculated on a weekly basis.

Job security

The issue of job security was not a particular theme for bargaining in Portugal during 2000. In general, this topic is usually only discussed in times of crisis and negotiations do not usually stray beyond legislative provisions.

A study carried out with the backing of the Employment and Vocational Training Observatory (Observatório do Emprego e Formação Profissional, OEFP) and published in 2000 examined the extent to which formal collective agreements in essential sectors of the Portuguese economy - metalworking, textiles, the graphical and printing industry and telecommunications - contained provisions on employment, qualifications and vocational training (PT0011122F). The study concluded that although the 1996-9 tripartite Strategic Concertation Pact led to the concerted negotiation of a large number of matters, sectoral collective bargaining (which continues to be the predominant level) has scarcely addressed issues such as employment, qualifications, work organisation and vocational training, though the social partners do recognise that these are important topics for negotiation.

Training and skills development

DGCT figures indicate that there were 55 changes to collective agreements related to training, job classifications and career development in 2000. The definition of job classifications and functions accounted for 58.5% of these changes, career development for 32.9%, and vocational training and retraining for 8.5%. Generally, the issue of improving the qualification levels of workers was the main topic of discussion in this area in 2000. The debate focused primarily on how to raise awareness of this issue.

Legislative developments

The main legislative developments in the employment and industrial relations field in Portugal during 2000 were as follows:

• a Council of Ministers Resolution (1/2000) concerning a plan to eradicate child labour;
• Decree-Law 70/2000 amending law 4/84 on the protection of parental rights;
• Decree-Law 109/2000 amending Decree-Law 26/94 on health and safety in the workplace; and
• Ministerial Order 11/2000 concerning the technical basis for calculating work-related accident pensions.

In addition, two laws which are not directly related to industrial relations may have an impact in this area. The first concerns the situation of immigrant workers: Decree-Law no. 4/2001 amending Decree-Law no. 244/98 of 8 August 1998 was adopted on 10 January 2001 (PT0101131F), following the issuing of proposals in June 2000 (PT0006199F). The second item of legislation was a new basic law regarding social security, which was adopted on 6 July 2000 (PT0007100F).

More generally, during 2000, an official commission, made up of legal experts, examined possible revisions to Portuguese labour law. The government wants to make labour law more efficient and coherent, and to open up more space for collective bargaining rather than legal regulation (PT0008104N). Employers' organisations continue to assert that labour legislation has to be made more flexible in order to assure greater competitiveness.

According to the public authorities, 1999 legislation on enhanced sanctions for breaches of labour legislation (PT9909162N) was implemented with a high degree of efficacy in 2000.

The organisation and role of the social partners

In 2000 the number of trade union organisations remained the same as in 1999, at 395. Of these, 326 were individual unions, 25 were federations, 39 were regional federations and five were confederations. The following mergers occurred:

• three metalworking unions from three districts (Lisbon, Santarém andCastelo Branco) merged into a single union; and
• three unions in construction, timber/lumber and the marble industry merged and now cover the whole south and central area of the country (Faro, Santarém and southern districts).

Three new unions and professional associations were set up in 2000, notably for civil service employees working in public notary's offices, municipal registries and building and property registries. Two independent unions were also established in three former state-owned companies (the postal service and railways).

The number of employers' organisations continued to grow (PT0003185N) with 506 recorded at the end of 2000 - 468 individual employers' associations, 22 federations, nine regional federations and seven confederations. Most associations are based on either the interests of small regional areas or specific activities, and few mergers have taken place. However, 2000 saw the establishment of a confederation for the artisanal fishing sector and a federation for the textiles and ready-to-wear industries.

Industrial action

Overall, there were fewer strikes in 2000 than in 1999, according to figures from the Institute for Development and Inspection of Working Conditions (Instituto para o desenvolvimento e Inspecção das Condicões de Trabalho, IDICT). In the first three quarters of 2000, a total of 821 strike notices were issued, resulting in 271 strikes (33% of the calls issued) - compared with 300 strikes in the same period in 1999. Of particular note were: the continuing strikes in various Lisbon public transport bodies in the early part of the year (PT0004188N); strike action by Portuguese Railways (Caminhos de Ferro Portugueses, CP) train drivers, which were ended by the government through a civil injunction; and strikes in the public services, involving teachers, nurses and central civil service employees. The first half of the year saw two protest strikes of more general scope - one in the civil service and another "for a Europe of full employment", which was held during the June Feira European Council summit (PT0006198F).

National Action Plan (NAP) on employment

The Portuguese 2000 NAP was presented at the end of May 2000 (PT0006194N). In a context of low unemployment, the 2000 NAP continued to give priority to active policies to promote employment and employability. Continuing along the lines of the previous NAP, the new Plan sought to improve the quality of employment by providing incentives to companies for the conversion of temporary jobs into permanent ones.

The social partners are involved in drawing up and putting into action the NAP. The tripartite Economic and Social Council accompanies the process, presenting proposals and demands. However, this collaborative effort arguably does not seem to be taking root, especially when it comes to issues of qualifications, life-long training, organisation of work and reconversion of the economic fabric (see above under "Job security"). Since 1999, the NAP has included an addendum aimed at involving the social partners in two areas:

• guideline five – promoting partnership by encouraging the social partners to conclude agreements in the areas of training, work experience and other initiatives aimed at helping unemployed people and young people gain access to the labour market; and
• guideline 15 – helping companies to adapt by removing obstacles to investment in human resources. These are mainly tax obstacles.

At the end of the year, the social partners represented on the the Standing Commission for Social Concertation were discussing four specific agreements on employment and vocational training, health and safety, social security and productivity, which were due to be signed in early 2001.

Equal opportunities and diversity issues

Equality of opportunities for women and men has been an increasingly prominent issue in Portugal in recent years. Recent initiatives include a number of developments arising from the NAP (see above) such as the creation of an observatory on equal opportunities in collective bargaining and an equality award for companies. Other initiatives are funded through EU programmes, such as projects on the integration of equal opportunities in the social dialogue and on the female labour market (PT0004190F).

The general view is that some progress has been made with regard to gender equality; but the progress made is still insufficient. There remains an appreciable gap with regard to job opportunities for women and the greatest concern is discrimination against women in certain jobs and in certain sectors.

Part of the rationale of the new measures on clandestine work by immigrant workers issued in 2000 (see above under "Legislative developments") was to improve working conditions for immigrant workers and help combat racism and xenophobia. Immigration to Portugal is a comparatively recent phenomenon, but is increasing, accompanied by rising levels of illegal, clandestine employment, notably in the construction, hotel and metalworking industries. Trade unions have demanded equality for immigrants under labour law and collective agreements.

Information and consultation of employees

There were no significant developments in the area of the information and consultation of employees in Portugal in 2000. The Portuguese social partners have expressed their satisfaction with the recent progress of EU-level proposals for the creation of a European Company Statute. With regard to European Works Councils (EWC s), there are no EWCs in any companies which are headquartered in Portugal.

A total of 12 new statutory company-level employee representative bodies, workers' commissions, were registered by the Ministry of Labour and Solidarity in 2000, although the actual number of new commissions, which may not have formally registered, might be higher.

With regard to direct participation, of note is the interest shown by public entities such as the Institute for Innovation in Training (Instituto para a Inovação na Formação, INOFOR) which recently launched an action programme on organisational innovation in which employee participation was considered an obligatory component of the methodology. The project ended in 2000 and is now undergoing evaluation.

New forms of work

According to statistics from the Ministry of Labour and Solidarity, there were 12,400 temporary agency workers in Portugal in October 2000, of whom 7,000 were women and 5,400 men. This represented a 2.3% increase on the previous year. Temporary work companies also state that the number of people on their payrolls has increased, and that there has been a growing specialisation in the temporary agency work sector and a move toward niche marketing. Foreign workers have increasingly been recruited in the sector, primarily in the areas of health and education. Because of a high level of company non-compliance with regulations governing temporary agency work, the General Labour Inspectorate (Inspecção Geral do Trabalho, IGT) has undertaken a number of investigations since 1999 that have resulted in financial penalties.

Teleworking in Portugal still represents a tiny part of the labour market. However, even though the number of teleworkers is still small, the social partners have become more aware of the need to create a legislative framework and conditions that will favour teleworking (PT0011121F). Some trade unions seek bargaining on the issue, while others take a more negative view.

No data are available on the number of economically dependent workers (those who, although technically independent, in practice have an employment relationship with a single employer). However, statistics from the National Statistics Institute (Instituto Nacional de Estatística, INE) show that the number of self-employed workers without employees fell from 872,000 in the fourth quarter of 1999 to 850,500 in the second quarter of 2000 (while the number of self-employed workers with employees rose from 287,100 to 298,500).

Outlook

The industrial relations debate currently seems to be centred around a number of key areas, and is likely to remain so in 2001. First, the issue of qualifications has become a pivotal point in the debate among social partners and promises to remain so, serving as the basis for negotiations on vocational training, recruitment, immigration, and changes that will enable the country to break free from an economy based on low wages. Second, there is much debate about the future of some sectors in the public administration, such as healthcare and certain municipal services such as basic sanitation. The discussion has centred on privatising municipal services and regulating working conditions, particularly working time and acquired rights. Finally, there is discussion on the issue of improving health and safety in the workplace and increasing efforts to combat child labour and illegal working by improving the efficiency of the public authorities in the area of employment.