Controversy over renewal of temporary agency work law

The legal framework regulating temporary agency work is due to be revised, just seven years after the last amendments. In July 2006, the ruling Socialist Party presented a draft bill regarding the new framework for temporary agency work. In response, the two trade union confederations have expressed their concerns about some of the measures in the bill, which in their opinion clearly undermine the protection of workers. The employers regard the changes as a positive step, but do not approve of the licensing requirements for temporary work agencies. In September, the debate on the draft bill began in parliament; the social partners expected to be called to the Parliamentary Committee on Labour and Social Affairs, where discussion on the draft bill would continue.

Background

Specific legislation on temporary work has been in force in Portugal since 1989 (Decree Law 358/89) and was subject to further amendments in 1996 and 1999. The legislation regulates the practice of temporary work and the specific conditions of the temporary employment contract, stipulating the circumstances under which it is allowed. Provisions include defining the limits of its duration, the framework for rendering of work, payment and other workers’ rights, and the social responsibilities of temporary work agencies (TWAs). In 1999, new legislation (Law 146/99) was passed into law, which introduced broader changes. At the same time, the general legal provisions on short-term contracts – included in the Labour Code since 2003 – regulate those aspects of temporary agency work that are not defined under this particular law (see EIRO thematic feature on temporary agency work in Portugal (138Kb MS Word doc)).

Seven years after the last amendments, the legal framework regulating temporary agency work is set to be revised once again. In July 2006, the ruling Socialist Party presented a draft bill, outlining a new legal framework for the regulation of temporary agency work. According to the Socialist Party, the proposed amendments aim to ‘ensure more responsibility on the part of the temporary work agencies, to increase the rights and guarantees of temporary workers and to promote a stronger control and inspection of temporary work activities’.

Criticisms from trade unions

The draft bill has met with the criticism of the two trade union confederations – the General Portuguese Workers’ Confederation (Confederação Geral dos Trabalhadores Portugueses, CGTP) and the General Workers’ Union (União Geral de Trabalhadores, UGT). According to CGTP and UGT, some of the new amendments proposed will clearly undermine the protection of workers. However, the confederations view more positively the step to tighten the obligations of temporary work agencies in relation to social security and taxation.

Among the more controversial aspects of the draft bill, CGTP and UGT point to the fact that the technical and organisational skills required for temporary work agencies are less demanding under the draft bill than under the current law. In relation to human resources of TWAs, the bill only stipulates that they have to be full-time workers. UGT and CGTP are critical of this aspect on the grounds that it increases the precarious situation of temporary agency workers, as full-time workers can generally be hired on a temporary or short-term basis.

A further aspect of the bill that has been criticised by CGTP and UGT is the extension of provisions enabling companies to use temporary work and to establish a user contract with a TWA. They point out that these provisions are similar to those required for the use of short-term contracts. Furthermore, the duration of user contracts is to be increased to a maximum of three years, with possibilities for extensions under certain conditions. As a result, the duration of temporary employment contracts will also be increased from a maximum of one year up to a maximum of three years.

According to the trade union confederations, the actual concept of temporary work itself is challenged, insofar as its unique character is questioned under the new draft bill. The confederations are also critical of the proposed introduction of a new type of labour contract – the indeterminate labour contract for temporary supply of labour (contrato de trabalho por tempo indeterminado para cedência temporária) – which in their view increases even more the precarious position of workers.

Employer response

The employers regard the proposed bill as a positive step, although they do not approve of the licensing requirements for TWAs.

Marcelino Pena Costa, President of the Portuguese Association of Companies in the Private Sector of Employment (Associação Portuguesa das Empresas do Sector Privado de Emprego, APESPE), which represents TWA employers, has stated that the draft bill is largely satisfactory; the association considers highly positive the proposed extension of the duration of the assignments from a maximum of one year up to the general maximum for short-term contracts, which is three years.

However, APESPE criticised the bill in relation to the TWA licensing requirements, in particular the fact that it will be dependent on the authorisation of the Institute for Employment and Vocational Training (Instituto de Emprego e Formação Profissional, IEFP). APESPE instead recommends the creation of a tripartite commission for such a purpose, which would include two representatives from the General Inspectorate of Labour (Inspecção-Geral do Trabalho, IGT), two members from the trade union confederations, and two members from the employer side, including APESPE.

Further discussions

CGTP demanded further discussion on the draft bill in the Standing Committee for Social Concertation (Comissão Permanente de Concertação Social, CPCS), a request which was supported by the other social partners and by APESPE. The debate took place in CPCS on 19 September; however, the discussion did not aim to change the draft bill, which, as the Minister of Labour and Social Security, José Vieira da Silva, highlighted, is the prerogative of the Portuguese parliament.

On 20 September 2006, the debate on the draft bill commenced in parliament; the social partners expected to be consulted in the Parliamentary Committee on Labour and Social Affairs, where discussion on the draft bill would continue.

Maria da Paz Campos Lima and Reinhard Naumann, Dinâmia