Labour inspection targets temporary work agencies and illegal work

In May 2007, the Portuguese General Inspectorate of Labour (IGT) launched a large-scale operation to examine the activities of temporary work agencies. As a result, IGT cancelled the activity of 195 temporary work agencies, on the grounds that they did not comply with the law, and a further 60 agencies decided themselves to suspend or stop their activity. The IGT has also investigated the issue of illegal work, in cooperation with the police authorities.

New law enables more flexible use of temporary agency work

The new Portuguese law on Temporary Agency Work – Law No.19/2007 – allows a more flexible and extensive use of temporary employment contracts by enterprises, compared with the previous legislation (see EIRO thematic feature on temporary agency work in Portugal (138Kb MS Word doc)). In particular, the law makes it possible to extend the duration of temporary work contracts up to 24 months rather than 12 months as previously, even in the absence of a temporary or exceptional increase of company activity.

Furthermore, an initial proposal, which was included in the draft bill – obliging the companies to have a certain minimum number of open-ended employment contracts in order to hire temporary workers – was withdrawn, thereby granting even more scope for businesses to avail of temporary agency work. The two trade union confederations, the General Confederation of Portuguese Workers (Confederação Geral dos Trabalhadores Portugueses, CGTP) and the General Workers’ Union (União Geral de Trabalhadores, UGT), were very concerned about and opposed to such a level of flexibility.

Stricter monitoring of workers’ rights

Nevertheless, the new law is more rigorous regarding the operating conditions and licensing of temporary work agencies, in particular reinforcing their obligations in respect of the workers’ rights to wages, insurance and social security. It is worth recalling that the new law generated considerable controversy when the draft bill was first presented, and that employers were against the licensing requirements for temporary work agencies (PT0609029I).

Already, in the first half of 2007, the General Inspectorate of Labour (Inspecção Geral do Trabalho, IGT) inspected 144 temporary work agencies, and began 81 processes which could result in penalties amounting to €25,000. According to the General Inspector of IGT, Paulo Morgado de Carvalho, the main infractions found were agencies operating illegally as temporary work agencies, as well as agencies that were not paying the deposit towards the Institute for Employment and Vocational Training (Instituto do Emprego e Formação Profissional, IEFP).

In fact, since the new law on temporary agency work was published in May 2007, IGT has been following temporary work agencies very closely and launched a large-scale operation to examine their activities and check their compliance with the law. The result of this assessment was the closure of 195 temporary work agencies, many on grounds that they did not comply with the current legislation. Moreover, 60 agencies cancelled their activity on their own initiative. At present, according to the IEFP, 264 temporary work agencies are operating according to the law.

Reasons for agency closures

IGT reported that the work agencies in question were closed because they did not renew the obligatory deposit payment in favour of IEFP – the institution responsible for their registration and licensing. This annual payment represents 200 months of the statutory minimum wage plus the corresponding Single Social Tax (Taxa Social Única), and amounts to a total of €100,000. The new legislation defined this sum in order to create a fund to guarantee the responsibility of temporary work agencies for the payment of wages and social security contributions on behalf of the temporary workers.

Furthermore, other reasons were brought forward for cancelling the activity of the agencies concerned, such as the fact that they did not include temporary workers in the social security scheme, that they did not have insurance covering accidents at work, and also because of the fact that some of them were more than 30 days late in paying wages.

Combating illegal work

During the same period, IGT also launched an operation to inspect illegal work practices by analysing recruitment advertisements. IGT examined, in particular, anonymous job advertisements which only mention a telephone contact or a workplace, suspecting that these are related to illegal recruitment practices of workers. The cases were presented to the criminal police authorities for further investigation.

Moreover, the Portuguese criminal police, in cooperation with their Spanish counterparts, are investigating the increase of anonymous advertisements to recruit Portuguese workers to work in foreign countries under exploitative conditions. In recent months, Spain has received thousands of Portuguese workers. Since January 2007, the Trade Union of Construction Workers of the North (Sindicato dos Trabalhadores da Construção do Norte), has also highlighted situations of illegal recruitment of Portuguese workers in the construction sector in Spain.

Maria da Paz Campos Lima and Reinhard Naumann, Dinâmia