Civil service pay negotiations expected to be difficult

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Negotiations began in Portugal in autumn 2000 over the annual civil service pay increases for 2001. Prospects for agreement do not seem bright - trade unions are demanding pay rises to match inflation plus productivity increases, while the government is calling for wage restraint.

In autumn 2000, the government and three civil servants' trade unions began the process of negotiating the annual civil service pay increases for 2001. The pay of civil servants is set by legislation, following negotiations with the trade unions (PT0004192F). At the same time, the government and the unions have been discussing increases in pensions and the various minimum wage rates. The unions concerned are: the Union of State Technical Staff (Sindicato dos Quadros Técnicos do Estado, STE), affiliated to the UGT confederation; the Public Administration Trade Union Front (Frente Sindical da Administração Pública, FESAP), also affiliated to UGT; and the Common Front of Civil Service Trade Unions (Frente Comum dos Sindicatos da Administração Pública, CSAP), affiliated to the CGTP confederation.

The unions are demanding the following wage increases for civil servants, based on what they claim to be increases in productivity:

• STE - 5% plus 1% to correct for inflation exceeding the 2000 pay award;

• FESAP - 6%; and

• CSAP - 6% plus 1.6% to correct for inflation exceeding the 2000 pay award.

Some economists feel that the unions' wage claims are excessive, both because productivity gains have been low and because they believe that meeting the unions' demands would decrease Portugal's competitiveness at a time when the overall economic outlook does not seem very positive. Nor does the government itself appear to be willing to give in to claims that it also considers to be too high. However, it does agree in principle with the payment of compensation for the higher than expected inflation rate in 2000, although its figures are not exactly the same as those put forward by the unions. The government predicted a 2% inflation rate for 2000 and gave civil service employees a 2.5% pay rise; in practice, inflation has so far reached 2.8% and the government is now predicting a final inflation rate of somewhere between 2.7% and 2.9% for 2000.

This discussion has been put off until later, in that the government has recently made its civil service pay offer conditional on the state budget being approved first – a move that is causing a certain amount of tension. The trades unions say that the government is expecting them to put pressure on the political parties to approve the budget.

The absence of formal bargaining to date is providing space for a trial of strength, leading to the creation of pressures which, in extreme circumstances, could result in strike action. This is the option that the unions would appear to be considering, given that, in their opinion, the minimum conditions required for a consensus do not exist. At the moment, however, the government is reconsidering its position and seems to be ready to return to the negotiating table.