European Works Councils and industrial relations in Portugal

In December 1999, negotiations over the establishment of European Works Councils were getting under way in some Portuguese-based multinationals, a few months after the legislation transposing the relevant EU Directive into Portuguese law came in effect. The new law sticks closely to both the Directive' provisions and the Portuguese industrial relations system.

Portugal transposed the EU European Works Councils Directive (94/45/EC) into national law through Law no. 40/99 of 9 June 1999. The deadline for transposition had been September 1996. Luxembourg is now the only EU Member State which has not yet transposed the Directive (EU9911209N). The Directive was transposed in Portugal through legislative means, rather than by negotiation between the social partners (TN9807201S). However, in extensive debate (PT9901125N), the provisions of the Directive were thoroughly analysed by the social partners in the Economic and Social Council (Conselho Económico e Social), and transposition of the Directive was made one of the objectives of the 1996-9 Strategic Concertation Pact (PT9808190F). The law was approved by the government in the form of proposed legislation that was drawn up and submitted to the Legislative Assembly. There it was put up for public discussion by workers' representatives exercising their right to participate in the elaboration of labour laws.

Structure of the law

Law no. 40/99 contains 36 articles grouped into four chapters under the following headings:

• Chapter I contains the objectives, field of application and some definitions of terms;

• Chapter II, the most extensive chapter, includes five sections on "provisions and transnational agreements";

• Chapter III outlines how the number of workers is to be calculated, how workers' representatives from establishments or companies in Portugal are to be elected or appointed, how they are organised and what provisions are made for their protection; and

• Chapter IV contains material regarding infringements, sanctions and judicial proceedings.

Continuities and changes in transposition and the effects on industrial relations

Law no. 40/99 follows the content of the Directive closely, although the subjects covered are organised somewhat differently and some subjects are addressed in an appendix rather than the body of the text. On some points, the law diverges from the Directive, for example:

• it applies to all sectors, thereby not taking up the option in the Directive to exclude the merchant navy;

• the law expressly states that it applies in some respects to non-EU Member States as well, thereby broadening the area of coverage (eg representatives of workers outside the EU may participate as observers in the special negotiating body); and

• it does not define "consultation", "European Works Councils" (conselhos de empresa europeus), or "special negotiating body".

During consultation of the social partners, special attention was given to the composition of the special negotiating body (SNB) and of the European Works Councils (EWC s) themselves, as well as to the obligation on management to negotiate. Despite their different points of view, the social partners were able to reach a consensus on the following points.

• Workers' commission s and workplace union representative s are considered to be key parties in setting up EWCs.

• The importance Portugal places on getting negotiations underway for EWCs is illustrated by article 15 of Law no. 40/99, which - following the terms of the Directive - makes the establishment of statutory EWCs based on the Directive's subsidiary requirements obligatory in the following cases:

  • when it is agreed between the central management of the company and the SNB;

  • if the central administration refuses enter into negotiations within a six-month period following a request for the start of negotiations on the part of workers or worker representatives; or

  • when there is still no agreement three years after a negotiation initiative is launched by the central administration, or from the time a request for negotiations is made by the workers or worker representatives, unless the SNB has decided either to not begin negotiations or to terminate them.

• Members of SNBs and statutory EWCs may be selected in one of the following ways:

  • by mutual agreement between workers' commissions and trade unions, or by agreement among unions collectively representing at least two-thirds of the workers concerned, or by agreement among unions each representing at least 5% of the relevant workers (if the two-thirds majority cannot be verified). If there are no trade unions present, members may be chosen by consensus among the workers' commissions;

  • by direct, secret ballot among the workforce, if agreement cannot be reached among the workers' commissions and unions, or if there are no representatives, unions or workers' commissions, or if at least one-third of the workers request elections.

The EWCs are a third type of employee representative structure within Portuguese companies, alongside workers' commissions and workplace union representatives - one with a specific scope of activity and specific powers. The General Confederation of Portuguese Workers (Confederação Geral dos Trabalhadores Portugueses, CGTP) sees the new structure as maintaining continuity by incorporating existing forms of representation. The General Workers' Union (União Geral de Trabalhadores, UGT) views EWCs as an innovation that will increase the Europeanisation of labour relations.

EWC negotiations in Portuguese companies

In December 1999, a few months after Law no. 40/99 into effect in July 1999, workers at some Portuguese-owned companies that meet the Directive's requirements stepped up the process of negotiations and forming EWCs. This has occurred primarily in the banking and chemicals sectors. At the Caixa Geral de Depósitos, which had begun the process even before the Directive was transposed, workers' commissions have already been in contact with their counterparts in other Member States and have delegated members to an SNB. There are plans to negotiate a similar arrangement at Banco Pinto e Sotto Mayor. At the same time, however, the restructuring that is taking place in the Portuguese banking sector may have an effect on the process, particular on the naming of company representatives.

Commentary

The transposition of the Directive into Portuguese law is an important moment for the country's system of industrial relations, because it is a first step toward regulating the information and consultation process in Portugal. Despite the fact that the Portuguese Constitution provides for employee information and consultation, regulations had not yet been fully established in this area.

Some features of the transposition reflect the fact that it is being incorporated into a system where there a need is often felt to preserve and guarantee rights from the outset (in advance) through administrative intervention. Requirements related to negotiations are no exception. Thus, the law requires - as it does in other cases, such as workers' commisions - that a copy of EWC agreements be sent to the Ministry of Labour and Solidarity (Ministério do Trabalho e da Solidariedade), along with the names and countries of origin of each member of the EWC, and the procedures to be used for information and consultation. If the company's headquarters are in another Member State, the Ministry must be advised of the names of the designated workers' representatives in Portugal. The Ministry of Labour and Solidarity can also intervene in the designation of members of the SNB or the statutory EWC by regulating election procedures for selecting worker representatives, if these are to be elected directly by secret ballot.

Although unions credit EWCs with the potential to improve workers' rights and representation in companies, in Portugal neither scientific research nor the social partners' agendas have focused very much on this new body. (Maria Luisa Cristovam)