September and October 1998 saw a debate in Portugal over the creation of a Wage Guarantee Fund to protect employees when companies become insolvent. The conditions governing access, how the fund will be financed, and how it will function are the points that have been most discussed by the unions.
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September and October 1998 saw a debate in Portugal over the creation of a Wage Guarantee Fund to protect employees when companies become insolvent. The conditions governing access, how the fund will be financed, and how it will function are the points that have been most discussed by the unions.
A draft bill to create a Wage Guarantee Fund (Fundo de Garantia Salarial) has been presented as part of the "labour package", containing more than two dozen pieces of legislation, which is under discussion in Portugal in late 1998 (PT9807186F). The legislation would reformulate the wage guarantee that was created by Decree-Law No. 50/85 of 27 February 1985.
The draft bill currently being discussed is in response to the EU Council Directive on the approximation of the laws of the Member States relating to the protection of employees in the event of the insolvency of their employer (80/987/EEC), adopted on 20 October 1980.
The bill would guarantee payment of outstanding debts owed to paid employees arising from the employment contract. A company is considered insolvent when it is unable to meet its financial obligations on a timely basis and has declared bankruptcy, or when reorganisation of the company to pay debts has been requested in the courts and the judge has mandated that the reorganisation of the company proceed or has declared the company bankrupt. Suspension of the company's normal activity for more than six months constitutes a strong indication of the presence of a bankruptcy situation. At the request of the courts or the trade unions, the Institute for the Improvement and Inspection of Working Conditions (Instituto do Desenvolvimento e Inspecção das Condições de Trabalho, IDICT) can be sent in to confirm that the company has, in fact, suspended activity.
The trade union confederations, CGTP and UGT, reacted to the bill in September and October 1998. They raised some questions with regard to what prerequisites will be necessary for workers to access the fund, how the Fund will be organised, and how it will function. The unions do not agree with the provision that the Fund should be made available only on condition that the employment contract be dissolved (which they claim would contradict EU Directive 80/987/EEC).
UGT also raises questions about the speed with which payment of debts will take place (on different schedules depending on whether reorganisation is undertaken or bankruptcy is declared) and about when the law would go into effect (it is pushing for 1 January 1999). Still to be determined is what percentage of the Fund's financing will come from the social security coffers and what percentage will be funded directly by the state.
CGTP also believes that having judicial action in progress should not be a requirement for workers to have access to the Fund, as long as "insufficient means on the part of the employing entity" can be demonstrated. Nor should formal cessation of the employment contract be required. CGTP claims that the form of financing presented in the draft bill is basically a subterfuge for financing the Fund from the social security budget. For CGTP, the Fund should be entirely paid for by the employers, through contributions specifically for that purpose.
Eurofound doporučuje citovat tuto publikaci následujícím způsobem.
Eurofound (1998), Creation of a Wage Guarantee Fund debated, article.
