Fewer agreements reached in first half of 2003

Official statistics indicate that fewer collective agreements were reached in Portugal in the first half of 2003 than in the first half of 2003, continuing a downward trend witnessed over recent years. One factor contributing to the current low level of bargaining activity is that a Labour Code containing new, more flexible rules on collective bargaining is due to come into force in December 2003, and the social partners in many cases appear to be waiting for this new framework to be put in place before seeking new agreements.

A report published in September 2003 by the Directorate-General of Employment and Labour Relations (Direcção-Geral do Emprego e das Relações de Trabalho, DGERT) at the Ministry of Social Security and Labour (Ministério da Segurança Social e do Trabalho, MSST) finds that in the first half of 2003 the trend seen in previous years towards a reduction in the amount of collective bargaining in Portugal continued - as indicated in table 1 below.

Source: DGERT.

The DGERT report finds that:

• while trade unions and employers' organisations have essentially retained the same structure and bargaining mechanisms, the first half of 2003 saw a continued fall in the number of collective agreements negotiated by them. Some 5.9% fewer agreements were registered with MSST and published in the first half of 2003 than in the same period of 2002, following a drop of 24.4% from 2001 to 2002 (PT0208102F);
• in the first half of 2003, the same number of company-level agreements was registered as in the first half of 2002, following a major fall from 2001 to 2002. As a proportion of all agreements registered, company agreements made up 37.3% in the first half of 2001 and only 36.8% in the first half of 2003. There thus appears to be no trend towards the decentralisation of collective bargaining to company level in Portugal - unless this is occurring through informal and thus unregistered agreements. However, it seems that bargaining between companies and different trade unions may increasingly be taking place at a single bargaining table, reducing the number of 'parallel' agreements concluded in the same company; and
• the proportion of wholly new agreements and agreements that fully revise earlier accords (and not just specific clauses, especially relating to pay) fell substantially. They represented 13.8% of the total number of agreements negotiated in the fist half of 2003, compared with 19.0% in 2002.

In Portugal, relatively extensive use is made of government instruments such as extension directives that provide for the more widespread application of collective agreements to all employees and companies in a sector, in particular circumstances (TN0212102S). Despite the falling number of collective agreements, the use of these instruments means that the proportion of employees whose pay and conditions is collectively regulated remains high. The number of extension directives issued in 2002 returned to 2000 levels after a rise in 2001 - see table 2 below. The first half of 2003 saw more directives than the same period in 2002, but the distribution of directives across the year is not consistent.

Source: DGERT.

With regard to the topics negotiated in the agreements registered in the first half of 2003:

• non-pay issues were covered in 25.4% of the agreements registered. Of these agreements, 49.2% introduced small changes in the areas of career paths and job descriptions and 29.2% dealt with working time, principally improving annual leave provision; and
• with regard to pay issues, the most common remained wage rises (23.3% of agreements), meal allowance increases (15.7%) and cash-handling allowances (12.3%). Specific payments for geographical flexibility were included in 9.9% of cases, for functional mobility or multitasking in 6.3%, and for flexibility of working time in 6.3%.

Conciliation statistics

In Portugal, the legal system provides two main mechanisms for resolving disputes arising in collective bargaining - conciliation and arbitration. The arbitration mechanism has been virtually unused over the past 25 years, thus leaving conciliation as the main means of dispute resolution (PT0002183F), alongside direct bargaining between the social partners. A recent report on public conciliation services in the first six months of 2003 from the MSST Industrial Relations Unit (Direcção de Serviços das Relações Profissionais, DSRP) finds that here has been a trend over the past three years towards an increased use of the conciliation mechanism during negotiations between the social partners - see table 3 below.

Source: DSRP.

In the first half of 2003, in comparison with the same period in 2002, there was an increase in the proportion of cases where parties refused to negotiate despite conciliation being used - see table 4 below. However, there was an increase in the proportion of cases where substantive agreements were reached through conciliation, or the parties agreed to return to direct negotiations. There was, though, increasing difficulty in reaching agreements on pay issues.

Source: DSRP.

New Labour Code

Collective agreements signed in the first half of 2003 were among the last to be concluded under the present legal framework. A new Labour Code (Código do Trabalho) will come into force in December 2003, and its provisions will make substantial changes to the regulation of collective bargaining in Portugal. The Code brings together in one document a large number of aspects of labour law, while amending a number of them - Portugal previously had no such codified set of labour legislation. It contains changes to both the collective (PT0210102F) and individual aspects of labour law (PT0211104F). With regard to collective bargaining, the Code replaces the existing legislation concerning the rights of employers' associations, trade union organisations and workers' commissions, the right to strike, and mechanisms and instruments for the collective regulation of pay and conditions (including collective agreements).

Debate over the Labour Code started in June 2002 (PT0208101N) and ran until the publication of the Labour Code in the Official Gazette (Diário da República) in August 2003 (as law no.99/2003 of 27 August 2003). It led to a one-day general strike in December 2002 PT0212104F and, even after the Code's approval by parliament (PT0305101N), debate has remained intense. At the time of its promulgation by the President of the Republic, the constitutional nature of some of the Code's provisions was called into question. The Constitutional Court (Tribunal Constitucional) thus conducted a preventative review of the Code's constitutionality and issued its ruling in July 2003 (Acórdão no. 306/03). It finds that four points of the Code are unconstitutional and must be reviewed. Of these, three relate to collective bargaining:

• the possible inclusion of 'peace clauses' in collective agreements;
• provisions concerning the relationship between the Code's provisions and those laid down in collective agreements; and
• provisions relating to the expiry of collective agreements.

Commentary

The data on collective bargaining in the first six months of 2003 indicate that the Portuguese social partners have adopted a strategy of expectation and prudence in the months before the new Labour Code comes into effect. As the parties have been awaiting the application of new rules on the bargaining system - which will abolish a number of provisions seen as being very inflexible, especially for employers - there have been relatively few new agreements, with full or partial reviews of existing agreements being more common. The expectation of being able to negotiate on specific issues in a more flexible way in future has led to this present state of inactivity. Furthermore, although it has often been difficult to reach agreements in recent times, employers and trade unions seem keen in many cases to overcome this impasse, as evinced by the increased use of conciliation mechanisms. (Maria Luisa Cristovam, UAL)