Pay agreement in the garment industry

In spring 1998, a new pay agreement was signed in the garment-making industry, one of the lowest-paid sectors in Portugal.

A 1998 pay agreement for the garment-making industry has been concluded between the Federation of Textile, Woollens, Garment, Footwear, and Fur and Leather Workers' Unions (Federação dos Sindicatos dos Trabalhadores Têxteis e Vestuário, FESETE) and the Portuguese Association of Garment-makers (Associação Portuguesa dos Industriais de Vestuário, APIV). The deal provides for a pay increase of 3.3% - a figure above that suggested by the public authorities (something that has not happened since 1991).

The agreement did not follow the normal formalisation procedure for collective agreement s because, although it was agreed with assistance of conciliation by the Ministry of Labour and Solidarity (Ministério do Trabalho e Solidariedade, MTS), the text was not officially published. A full collective agreement for the sector has not been negotiated since 1986.

Garment-making employs approximately 122,440 workers, which represents 15% of the country's industrial workforce ("Quadros de Pessoal - 1995", Departamento de Estatística, MTS (1997). Minimum pay rates in the sector are not much above the national minimum wage and, in the lowest categories, they affect an enormous number of workers. This makes the agreement an important reference point for companies engaging in subcontracting (very numerous in this sector). Some commentators say that the fact that the new agreement was not officially published does not detract from its effectiveness: its implementation in enterprises in these circumstances is an example of creating "social harmony" and good faith in bargaining.

According to APIV, the employers would like to see more "respectable" pay levels in the garments sector. In previous years, pay increases have been presented as unilateral decisions by APIV, which were subsequently put into effect in the enterprises. Pay bargaining is important as a means of leveling the intense competition among companies in the sector. Nevertheless, the industry is so reliant on intensive, unskilled labour that there is little hope that pay rates or levels of qualification will rise much. Currently, though, there are some enterprises that manage to be quite competitive by going for higher quality (medium- and high-range) products and emphasising market location and "just-in-time" distribution.

In the negotiations, issues such as length of working time were not addressed. The companies in this sector had set the working week at 45 hours in 1990, and at 44 hours in 1991. When the working week is reduced to 40 hours under current legislation (PT9712154f), the way that working time is calculated must be changed to a measurement of "effective length". This means that certain periods, such as break times, cannot continue to be counted as part of the normal work period. There are several other important issues to be negotiated such as occupational categories, a new annual holiday and absence regime and working time variation around an average ("adaptability").