In April 1998, preliminary draft legislation was presented to revise Portugal's system regulating the "suspension or reduction of workers' services" (lay-offs and short-time working).
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In April 1998, preliminary draft legislation was presented to revise Portugal's system regulating the "suspension or reduction of workers' services" (lay-offs and short-time working).
To increase protection for employment and workers, the Government has drawn up preliminary draft legislation to revise the lay-offs and short-time working scheme, known as "suspension or reduction of workers' services" (suspensão ou redução da prestação de trabalho). This reform was one of the points set out in the 1996 tripartite Strategic Concertation Pact (Acordo de Concertação Estratégica, ACE). The proposed legislation, issued on 9 April 1998, would alter Decree Law No. 398/83 of 2 November, which currently governs this issue and permits an enterprise temporarily to reduce its workforce. Under the scheme, the employer continues to pay part of the workers' wages, with the remaining portion paid out of social security funds.
The new draft bill would make the following amendments:
the employer's share of the wage compensation to be paid (governed by article 13 of the decree law) will be 30% (or 15% when the workers concerned are retrained) and the remaining 70% (or 85%) will come out of the social security budget;
during the period of lay-off or short-time working, workers will attend vocational training courses geared to improving the viability of the enterprise;
the employer will be free to choose either lay-off or short-time working (revoking paragraph 3 of article 5), eliminating any legal preference for one or the other of the two measures, though this will be subject to scrutiny by the appropriate authorities; and
information and consultation will be provided to workers regarding the training provided and the reasons behind the lay-off or short-time working, so as to increase workers' participation in the process (addition to article 15-A).
This draft legislation has already been submitted to the social partners for their consideration through the Economic and Social Council's Standing Committee for Social Concertation (Comissão Permanente de Concertação Social). The General Confederation of Portuguese Workers (Confederação Geral dos Trabalhadores Portugueses, CGTP) holds an unfavourable opinion of the wage compensation scheme, which "seems directed at benefiting employers while burdening the social security budget." It does agree, however, with the point regarding vocational training courses for workers aimed primarily at improving the viability of the enterprise.
The Confederation of Portuguese Commerce (Confederação do Comércio e Serviços de Portugal, CCP) agrees with the proposed revocation of paragraph 3 of article 5 (leaving the choice of lay-off or short-time working to the employer). CCP highlights, however, the need to clarify the point regarding wage compensation, which it believes is not in keeping with the content of the Social Concertation Pact. According to the Pact, the employer's share should be reduced by a third to 20% (of the compensation), or as low as 10% "when there are duly approved plans for worker training." Finally, CCP claims that the scope of the revision is unnecessarily broad because of the provisions on worker information and consultation.
Eurofound recommends citing this publication in the following way.
Eurofound (1998), Lay-off scheme to be revised, article.
