Pay dispute at Petrogal

Download article in original language : PT9806183NPT.DOC

Over May-June 1998, a pay dispute resulted in a number of strikes at Petrogal, the Portuguese petrochemicals company.

Petrogal is a oil-refining and petrol-supply company with a number of establishments throughout Portugal and 2,600 workers in its employ. The average age of workers is 44.5 and the average number of years of service is 18.6.

Since the beginning of May 1998, Petrogal workers have been putting forward a series of demands, backed up with industrial action, aimed at:

• renegotiating the company-level agreement to upgrade pay. In June, the demand was for a monthly pay increase of at least PTE 7,500 for all workers. This adjustment would mean an increase of at least 6% for the lowest pay scale - compared with a national average increase in 1997 of 3.4%. The issue of bonuses is still under discussion, as is am examination of career paths;

• creating a system of danger and hardship pay;

• introducing an additional month's bonus ("15th month");

• reducing working time - workers are demanding a 35-hour work week; and

• improving safety conditions in refineries, an issue related to the "outsourcing" that has taken place in some departments. Workers are of the opinion that a number of refinery fires have been due to faulty maintenance, arising from the fact that Petrogal uses outside maintenance service providers that are allegedly lacking in technical know-how. Due to this outsourcing, 750 jobs have been lost since 1997, 300 of which are in Porto.

The dispute has included a number of strikes in May and June and meetings with officials of trade unions belonging to the two main confederations (UGT and CGTP) and of independent unions, and with the workers' commission.

One of the reasons behind the dispute is that in 1997 bonuses were attributed in what workers saw as a discriminatory manner. It is alleged that there is a climate of deep discrimination, which is causing general dissatisfaction among workers, including senior executives.

In the current context of economic expansion and increased productivity, workers are seeking a share in the distribution of the gains. However, the negotiation of differentiated pay rates has been difficult. Portugal has the lowest wages among the countries participating in EU Economic and Monetary Union. Keeping wages low as an incentive to outside investment while trying to bring wages closer to European levels is a balance that will be hard to strike.