Portugal: latest working life developments Q2 2018
The new tripartite action plan to combat job insecurity and new measures to promote collective bargaining are the main topics of interest in this article. This country update reports on one of the latest developments in working life in Portugal in the second quarter of 2018.
New measures to curtail rise in precarious work
The level of precarious work (i.e. insecure employment and work with few entitlements to income support) is high and continuing to rise in Portugal. More than a fifth (21.7%) of all employees had a non-permanent contract in the first quarter of 2018, an increase of 7.1% compared with the first quarter of 2017.
Following a tripartite agreement between the government and most of the social partners, Resolution 72/2018 was signed on 18 June 2018 to combat the issue of precarious work and promote more dynamic collective bargaining. Measures proposed in the resolution’s action plan will involve significant changes to labour legislation, some of which are generating controversy. Parliament will discuss and vote on the legal changes in Bill no.136/XIII from 18 July 2018 onwards.
The measures to tackle precarious work include:
- putting more time limits on the duration of fixed-term contracts
- penalties in the form of an extra social security contribution on companies who use an excessive number of non-permanent contracts
- extending the duration of very short employment contracts for seasonal work in sectors such as agriculture and tourism (reducing the need for undeclared work)
- extending the probationary period for first-time job-seekers and long-term unemployed people
- limiting the number of renewals of temporary agency contracts in order to protect temporary workers
- Portuguese Government: Resolution of the Council of Ministers 72/2018
- Ministry of Labour, Solidarity, and Social Security (MTSS): Boletim Estatístico
- Social and Economic Council (CES): Tripartite agreement on ‘Combating precarious work and labour market segmentation and promoting greater dynamism in collective bargaining’
Action to revitalise collective bargaining
The resolution also lays out proposals to boost collective bargaining, which essentially collapsed in the period 2011–2013, during the implementation of labour market reforms under Troika Memorandum of Understanding requirements.1 Two of the key aims are to combat the growing individualisation of labour relations and to promote dynamic collective bargaining instead.
The first involves changes such as eliminating individual agreements on ‘working time accounts’ (banco de horas) in favour of those negotiated through collective agreements. These will allow the normal working period to be increased by up to two hours a day with a limit of 50 hours per week and 150 hours per year. Workers will be consulted through referendums organised by employers and under the supervision of local trade unions or other representative structures.
Other measures to promote dynamic collective bargaining include the creation of an arbitration court under the framework of the Economic and Social Council (CES). The range of rights that workers keep after collective agreements expire is also to be extended, with provisions added for parental and health and security rights.
- CES: Tripartite agreement on Combating precarious work and labour market segmentation and promoting greater dynamism in collective bargaining
Mixed reactions to new measures
While a number of social partners accepted the government’s tripartite agreement, the General Confederation of Portuguese Workers (CGTP) refused to sign it. The CGTP argued that fundamental measures were missing while others – such as extending the probationary period for labour market entrants and liberalising very short-term contracts – would actually increase precarious employment. It also opposed the group ‘working time accounts’ because they allow 150 hours of unpaid overtime work set up by referendums and not by collective bargaining.
The Left Block and the Communist Party face similar issues. The tripartite agreement and the government bill include measures that resulted from the parliamentary agreements between them and the Socialist Party (PS) in 2015 – agreements that gave the PS the support to govern. But they also include measures that, in practice, will challenge and circumvent the principles agreed to combat precarious work and promote collective bargaining.
Debate over the proposed new labour legislation will certainly have to address the controversial issues that were already present in the reactions to the tripartite agreement. The first debate in parliament in early July announced that the detailed discussion of the legislative projects will take place in the autumn, for final approval.
1 Campos Lima, M. P. and Abrantes, M. (2016), Country report: Portugal , DIADSE – Dialogue for Advancing Social Europe, CESIS/UvA