Official inspection task force to fight submerged employment

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A protocol agreement was signed in Portugal on 1 October 1997 between the labour inspection, social security and taxation services. The protocol aims to coordinate action to fight the ever-growing level of clandestine or unregulated labour.

As yet there are no precise statistics on the amount of clandestine labour (which takes place outside the framework of the law) or unregulated labour (service in the employ of others, masked as self-employment) in Portugal. However, it is known that both types have increased over the last few years. The situation, which has had a number of negative repercussions, has been criticised by trade union confederations.

Not only are labour laws and collective agreements (and, as a result, working conditions and labour protection) being ignored, but serious effects are also being experienced by the social security system. Receipts for social security either do not come in at all (in the case of clandestine labour), or are lower than they actually should be, since the social security contributions of the self-employed are lower than those owed in cases where there is an employment contract. The tax authorities also suffer a loss, since the income taxes duly owed by salaried employees are not being collected or because the only income tax being collected is for that of a self-employed person, in which case opportunities for tax evasion and fraud increase.

This background explains the signing of a cooperation protocol, on 1 October 1997, between the Labour Inspectorate-General, the Directorate General for Taxation and the Regional Social Security Centres. The protocol aims to coordinate joint activities that will combat clandestine and unregulated labour and curb tax and parafiscal fraud and evasion.

Up until now, the inspection activities of the labour administration authorities, the tax administration and the social security services had been carried out separately, that is, without coordinated joint efforts on the part of all three.

The protocol sets up a system for collaboration amongst the inspection services of the Ministries of Labour (Ministério para a Qualificação e o Emprego), Finance (Ministério das Finanças) and Social Security (Ministério da Solidariedade e Segurança Social). It is the result of special tripartite social concertation negotiations - the Strategic Social Pact (Acordo de Concertação Estratégica) signed on 20 December 1996, between the Government and the General Workers' Union (União Geral dos Trabalhadores) and all the employers' confederations..

The protocol provides for coordinating efforts amongst the three inspection systems at the central level. For this purpose, a coordinating group is to be set up which will contain members selected by each one of the three systems. It will be the central group's task to programme and evaluate joint actions of a nationwide scope and present the respective ministries with decision-making proposals it deems suitable. Cooperative efforts are also to be established at the district and regional level.

Also planned is the periodic exchange of information amongst the three inspection systems and joint efforts stemming from the activities of other independent entities when such activities come into the inspection services' legal sphere of action.

Another important feature of the protocol is cooperative efforts that will involve training inspection agents. Avenues for cooperation will be set into motion for initial and continuing training programmes for employees belonging to the three services. The main objectives will be to promote greater mutual understanding of aims and methodology and to increase areas of action wherever a common interest exists.