Difficult run-up to tripartite negotiations

Some of the Portuguese social partners have begun to adopt their strategies towards the 1998 round of bargaining for a new "social concertation" agreement. Manoeuvring is in full swing in autumn 1997.

Negotiations between the Government, trade union confederations and employers' confederations are soon to begin to determine pay policy (and possibly other matters) for 1998. At the same time, albeit separately, talks will begin between the Portuguese Government and the main public service unions.

Negotiations for a new tripartite social concertation agreement will naturally involve analysis and discussion on how the Portuguese economy is developing. The Government has already disclosed its growth forecasts for 1998, which are as follows:

• Gross Domestic Product (GDP) - 3.75%;

• private consumption - 2.8%;

• public consumption - 1.0%;

• employment - 1% to 1.25%;

• productivity - 2.5% to 2.75%;

• Inflation - 2%; and

• investment - 8%.

The General Workers' Union (União Geral de Trabalhadores,UGT) will be adopting a different strategy from previous years. It has already announced its demands at a press conference, as follows:

• an average increase of 3.5% in pay scales to be negotiated in 1998, a figure which is based on a projected increase in the annual rate of inflation of 2.2%, GDP growth of 3.5%, productivity growth of 2.5% and a 1% increase in employment;

• a 4.9% increase in the national minimum wage (agriculture, industry, commerce and services) and 9.8% for the national minimum wage applied to domestic work;

• increases of 4.6%, 6.8% and 7.1% respectively for the minimum state retirement pension, farming pension and social pension; and

• an increase of between 3.5% and 7.5% in family allowances for children and young people, depending on income.

The three employers' confederations - the Confederation of Portuguese Industry (Confederação da Indústria Portuguesa, CIP), Confederation of Portuguese Agriculture (Confederação dos Agricultores de Portugal, CAP) and Confederation of Portuguese Services and Commerce (Confederação do Comércio e Serviços de Portugal, CCP) - have not yet formally outlined their positions. However, in statements to the press, both CCP and CIP have implied that they are not willing to stray from an average guideline for wage increases that exceeds 2.6%. They are also insisting on tripartite negotiations to discuss labour legislation covering flexible rostering and multifunctional flexibility. The CAP usually follows the lead of the other two employers' confederations when it comes to pay and working conditions.

The General Confederation of Portuguese Workers (Confederação Geral dos Trabalhadores Portugueses,CGTP) is not expected to propose a guideline for average pay. The CGTP has never before signed social concertation agreements covering pay policy. Its current strategy seems to favour sectoral collective bargaining where pay increases are not laid down or determined by any recommended guideline.

The climate underlying the run-up to this year's social concertation bargaining is marked by two conflicting elements:

• on the one hand, macroeconomic indicators show that the Portuguese economy has definitely been improving (above average growth for European Union countries, sustained decrease in inflation, evidence of a drop in the unemployment rate and public debt under control); and

• on the other hand, many of the social partners are displeased with the fact that few of the issues agreed upon in the last social concertation agreement - the 1996-9 Strategic Social Pact (Acordo de Concertação Estratégica, ACE) signed by the Government, UGT and the three employers' confederations - have actually been carried out . Both the CAP and the CCP have already declined to take part in that agreement's monitoring committee and have demanded that the Government put into action, quickly and in full, the measures that they believe are not being carried out.

The CGTP, which does not belong to the Strategic Social Pact's monitoring committee (since it did not sign the agreement), has protested, alleging that it has been deliberately left out of the decision-making process by the Government and the other social partners (PT9707128F)

The run up to the tripartite negotiations is therefore showing signs of variation from the past in terms of the overall political and social context and social partner strategy. It is in particular in contrast with 1995 and 1996, when tripartite agreements were signed by the Government, UGT and the three employers' confederations in an atmosphere of greater flexibility and mutual trust. It is therefore likely that bargaining this year will be more difficult, though that in itself does not mean that failure is in store for a 1998 social agreement.