Difficult bargaining round in hotel industry

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The current bargaining round for 1998 in central Portugal's hotel and restaurant industries is proving to be tough, reflecting more general difficulties being experienced in bargaining. These difficulties are linked to both bargaining structures - collective bargaining takes place almost exclusively at sector level in Portugal - and the issues under negotiation. The current model seems to be losing its potential to determine working conditions.

The process of negotiating collective agreements for employees in the hotel industry of central Portugal has met with several obstacles in 1997. Pay increases are usually negotiated on an annual basis and the Association of Hotels and Restaurants of Central Portugal (Associação dos Hotéis e Restaurantes do Centro) recently offered an increase of 3.5%. The increase which up to now has been offered to public servants (who serve as a benchmark) for 1998, is 2.6%. The Association is also proposing changes to patterns of weekly rest breaks, the regulation of part-time employment and changes to job descriptions. During the course of bargaining, the employers have proposed that instead of two consecutive days off, employees would have non-consecutive days off, a proposal that the trade union has rejected. It has also rejected the Association's proposal of only 1.5 days off per week.

With regard to bargaining over the level of qualifications required for specific jobs, in October 1997 the parties have not yet reached agreement on the relevant job descriptions and grades of the occupations laid out in the contract. The Association wants to increase the multifunctional nature of some of the occupations, whilst the union will accept only the integration of tasks that will upgrade the functions of employees covered by the agreement.

The union also refuses to negotiate on part-time work, arguing that wages are so low in Portugal that employees would not be able to survive on reduced pay. Thus, according to the union, workers would be forced to seek more than one job, making their lives more difficult.

Negotiations carried out by the Union of Hotel, Tourism, Restaurant and Related Industries of Central Portugal (Sindicato dos Trabalhadores da Indústria Hoteleira, Turismo, Restaurantes e Similares do Centro- a CGTP affiliate) have involved several forms of protest, including a vigil in Coimbra at the beginning of October in front of the town hall, which involved the distribution of pamphlets outlining the situation to the public. On 16 October, a "public tribunal" took place in Lisbon, in front of the Ministry for Qualification and Employment (Ministério para a Qualificação e Emprego, MQE), in which a dossier containing problems relating to the sector was handed in.

Aside from supporting collective bargaining, the aim of these public demonstrations has been to call attention to the fact that there are numerous individual contracts in the sector, involving individual negotiation of less favourable conditions. Trade unions in the sector also complain that companies have not been applying Law 21/96, which provides for a 40-hour working week. Furthermore, unions complain of the existence of precarious employment; that is, of the fact that there are workers whose contracts are not covered by collective agreements (for example, contracts for services). The hotel workers' union for northern Portugal has stated that the sector is still in the growth phase, but that policy for the sector has grown haphazardly. The union has called attention to poor social conditions existing in the sector. It points especially to widespread "repressive" conditions, especially in small restaurants, cafes, canteens and pastry shops where, according to the union: working hours have not been reduced; there is only one day off a week; and 50 or 60 working hours per week are not uncommon. The union demands that labour inspection authorities be more active and efficient.

Bargaining structure

Collective bargaining over employment conditions in the hotel and restaurant industry in Portugal is carried out in several rounds by sub-sector (hotels, restaurants and pensions, with different employer' associations) according to union tendencies and in four zones: north, centre, greater Lisbon and Algarve.

On the workers' side, negotiations are conducted by the unions belonging to the two main union confederations, UGT and CGTP, which are represented in the sector by, respectively, the Federation of Office and Service Workers (Federação dos Trabalhadores de Escritório e Serviços, FETESE), and by the Federation of Hotel Industry Workers (Federação dos Trabalhadores da Indústria Hoteleira, FESHOT), to which the Union of Hotel, Tourism, Restaurant and Related Industries of Central Portugal belongs. For employees or enterprises which are not covered by any agreement, the Government issues official orders on a regular, annual basis to cover all situations.

FETESE has stated that since there are so many rounds and agreements, it is sometimes hard to determine which agreement is applicable. It has also claimed that since there are so many employers' associations, individual business interests are safeguarded while increasingly worse working conditions prevail. FETESE has been negotiating on working time, job content and career structures, with a view to the personal development of employees and their better adaptation to changing work environments. This has led, notably, to an agreement in the area of Lisbon (published in the MQE's Boletim do Trabalho e Emprego 28/97)

Notable features of the hotel and restaurant sector include the following (the figures are taken from the MQE's 1994 statistics annual, Anuário de Estatísticas Sociais):

  • it contains the greatest number of small businesses of any industry in Portugal - 89.6% of these businesses have nine workers or fewer;
  • it is one of the sectors in which there is the highest percentage of fixed-term contracts - 15.3% of contracts in the sector are of this kind, against a national average of 12.8%. This percentage is exceeded only in the construction industry;
  • there is a high rate of labour turnover - 34.0% against a national average of 31.7%; and
  • its wages are amongst the lowest - PTE 68,400 per month against a national average of PTE 89,100; and
  • it is the sector with the longest working day.

Furthermore, in hotels and restaurants, the proportion of workers covered by collective agreement is lower than in other sectors.


As the sector contains an extremely high number of small and micro enterprises, the hotel industry unions are trying to achieve the greatest possible amount of uniformity with regard to working conditions. They are therefore attempting to cover most situations by adopting a largely standard approach to the entire sector, and negotiating limits on employment flexibility at this level. Formal company-level bargaining has taken place in the case of large-scale hotels. However, many individual enterprises have not met sector agreement requirements and have established new working conditions by means of informal agreements and unilateral decisions. For this reason, pay scales and other conditions of employment vary widely, in a structural sense, from enterprise to enterprise.

Bargaining issues in the sector lack innovation, and little thought has been given to economic and social changes that have taken place.

The structural set-up of hotel industry negotiations mirrors the system of collective bargaining in Portugal, which is predominantly characterised by sector-level bargaining (90.7% of Portuguese employees are covered at this level) and a wide range of employer and union representation. It is also characterised by the important role of the state in setting wages and other working conditions. These include the establishment of the minimum wage and public sector pay, legislation on working time, employment relationships, structural aspects of the system and dispute-settlement mechanisms. (Maria Luisa Cristóvam, UAL)

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