Social partners evaluate implementation of Strategic Concertation Pact

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The Portuguese Government issued an assessment in July 1998 of its implementation of the priority measures in the 1996-9 tripartite Strategic Concertation Pact. Trade unions and employers generally find that implementation leaves something to be desired.

At the end of July 1998, the social partners evaluated the progress of the 1996-9 tripartite Strategic Concertation Pact (Acordo de Concertação Estratégica, ACE), on the basis of a document submitted by the Minister of Economy, who is responsible for the strategic part of the agreement. Labour legislation was the most controversial point of the Pact itself, and has received the most negative assessments from the social partners.

The Strategic Concertation Pact's measures

The first part of the Pact, which was signed in December 1996, lays down the general foundations (agreed goals and principles) for the agreement. The second part contains binding commitments under 10 headings:

1. the multiannual macroeconomic scenario and the definition of points of reference;

2. the goal of increasing employment;

3. the goal of improving competitiveness;

4. the economy and companies;

5. productivity; working conditions and participation;

6. active policies on employment, education, training and the information society;

7. reform of social protection;

8. restructuring the taxation system;

9. modernising and reforming the public administration; and

10. incomes policy.

After the most recent ministerial reshuffle in October 1997, the Government decided to make an effort to meet by July 1998 all the deadlines for commitments it had undertaken as part of the Pact. A document published by the Government in February 1998 thus provided for the implementation of measures concerning the following issues:

• social dialogue and participation;

• finance (fighting tax evasion, reorganising the taxation and customs services and tax credits for employment);

• planning and administration of the territory (housing and participation in managing the Community Support Framework);

• the economy (implementing action programmes in various economic areas);

• education;

• health;

• agriculture and fisheries;

• labour and solidarity (24 measures for implementation);

• wages guarantee funds;

• flexible retirement ages;

• revision of the system of penalties for infringing labour regulations (PT9802168N);

• incentives encouraging part-time work (PT9806181F);

• promoting sectorial and regional talks on modernisation, qualification and employment (more than 13 measures in this area);

• revision of the law governing holidays and temporary work;

• equal opportunities in the area of health and safety; and

• the implementation of the participation of employers in drawing up labour legislation (not currently provided for in Portugal).

Social partners' positions

The social partners had considered the above points a priority for the first six months of 1998. At the end of July, the two main trade union confederations - the General Workers' Union (União Geral de Trabalhadores, UGT) and the General Confederation of Portuguese Workers (Confederação Geral dos Trabalhadores Portugueses, CGTP) - said that they had been informed about the proposals, but that very few concrete measures had been implemented.

The secretary general of the UGT said, in a public statement, that the implementation of the measures in the Strategic Concertation Pact was far behind schedule and that many of them had not been implemented at all, as was the case in the areas of social security (PT9805178F), labour legislation and education. He said that the incomes policy would not be implemented either because the goal was a 2% pay rise, and there would in fact be a real growth of only 1%-1.5% and purchasing power had gone down.

The secretary general also supported a correction in personal income tax (Imposto sobre Rendimento Singular, IRS) for employees, thus reducing their tax burden - in terms of rates, taxation brackets, deductions, and transformation of tax reductions into tax deductions. A reduction in the IRS has been a central point in the UGT's incomes policy proposals for some time, and it has expressed regret that measures on the subject to be included in the state Budget have not yet been discussed (PT9711149N). The UGT considers that IRS reform is one of the main ways of raising pay, especially the lowest levels, given expected inflation of 2.4% or 2.5%. It feels that, where labour laws are concerned, the Portuguese legislative system is complex, which will mean that it will take some time to implement the proposed reforms. The secretary general also mentioned the absence of measures to create jobs in the agricultural sector and to combat illegal and clandestine labour. The UGT's assessment of the Pact is, on the whole, positive, provided that the commitments it lays down are kept.

The CGTP, on the other hand, did not sign the Strategic Concertation Pact and does not participate in the supervisory committee which oversees it (PT9712155F). It opposes the labour legislation under preparation, based on the Pact (PT9807186F). CGTP claims that the legislation is being drawn up disjointed way and that, at the moment, there are 27 laws under discussion, though the plan was for a single framework for changes to labour laws. The confederation also criticises the proposed restructuring of the social security system and the proposals for the wages guarantee fund, lay-offs (PT9806182N) and part-time work. It hopes that these and other measures under preparation will not be approved in their present form. CGTP has been affirming its position with protest measures which should continue in September, when the Portuguese Parliament reconvenes.

The Confederation of Portuguese Industry (Confederação da Indústria Portuguesa, CIP) and the Confederation of Portuguese Commerce (Confederação do Comércio e Serviços de Portugal, CCP) consider that the Government's assessment of progress under the Pact is highly "disorganised". The CIP still insists that very little has been done to change labour legislation that is totally inadequate for today's situation. It also disagrees with the law on penalties for labour offences and feels that they are too severe. The CIP fears a greater tax burden, which would make it more difficult to attract foreign investment and which will only take the form of subsidies. It says that nothing has been done to adapt to the forthcoming euro single currency, and it feels that Portugal is not ready for the new economic situation after joining the single currency and that nothing will be done before the general elections in 1999. The CCP, for its part, also says that tax and labour reforms have not been prepared.

The Government's assessment is positive, stating that many measures have already been implemented and that a substantial part of the remainder is ready for discussion and approval by Parliament. This is the case with the labour legislation planned for the beginning of the next parliamentary session.

Commentary

The fact that the Government has presented the social partners with a document taking stock of the implementation of the Strategic Concertation Pact constitutes a development in the social dialogue in Portugal and is intended to prepare the planned "Europact", aimed at adapting Portugal to Economic and Monetary Union (PT9803171N) . As a result, there will now be regular talks between the social partners and the Government on essential issues such as those under discussion relating to the revision of labour legislation and social security. (Maria Luisa Cristovam, UAL)