Conciliation report highlights need for innovation in bargaining

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The need to innovate collective bargaining has been on the Portuguese social partners' agenda for some time. The issue is highlighted in a report on conciliation activities from 1995 to 1999, published by the Institute for the Development and Inspection of Working Conditions (IDICT) in early 2000. The report stresses the sharp decrease in the number of cases of conciliation in 1999, and opens the way for reflection on why other mechanisms of dispute resolution, such as mediation and arbitration, are not being used.

In Portugal, the mechanisms provided for in law for resolving labour disputes are conciliation, mediation and arbitration, with the social partners seeming to prefer conciliation to the other mechanisms. Conciliation involves negotiations between the parties in the presence of a third party, the conciliator (a government representative or individual independent expert), whose task is to help them overcome any difficulties that arise in reaching an agreement. Recourse to conciliation is voluntary, since no kind of precedence exists between the three dispute-resolution procedures provided for. Conciliation may be initiated at any time by mutual agreement between the parties involved, or one party may initiate it unilaterally by submitting a formal request to the Ministry of Labour and Solidarity (Ministério do Trabalho e da Solidariedade, MTS). The Ministry may provide the conciliation services if the social partners do not choose their own conciliator.

IDICT conciliation service

The conciliation service provided by Institute for the Development and Inspection of Working Conditions (Instituto para o Desenvolvimento e Inspecção das Condições de Trabalho, IDICT) - part of MTS - is the only general conciliation procedure for collective conflicts that exists in Portugal. A recent report from IDICT's Lisbon industrial relations office describes conciliation as a kind of assisted negotiation where a third party participates. According to the legislation, the social partners are at liberty to use the services of IDICT or to abandon the conciliation process as they see fit. IDICT is responsible for promoting direct dialogue, assisting the parties to come to an agreement and helping prevent a prolonged impasse. The negotiating parties retain control over the process. The conciliators play a specialised and active role, closely following the direct negotiating process and establishing contacts with the social partners and the appropriate ministries when state-owned companies are involved, as well as with MTS departments as needed.

Conciliation in practice

A recent report from IDICT examines 558 cases referred to conciliation between 1994 and 1999. It main findings are that:

• between 1994 and 1998, 76.3% of all cases of conciliation and negotiation took place in Lisbon;

• in 58.7% of cases, the outcome of the conciliation process was total agreement. In other words, the objectives of conciliation were achieved;

• the number of requests for conciliation has declined in recent years, while the number of collective agreements which have come into effect during the same period has remained stable. This decrease was substantial in 1999 (92 requests were made in 1997, 101 in 1998 and 59 in 1999), though this may relate to the life-cycle of collective agreements, which is not always annual although wage negotiations nearly always are;

• the proposed objectives of conciliation ranged from resuming (or initiating) direct negotiations to reaching agreements between the parties on specific matters under negotiation. The number of cases in which the parties resumed direct negotiations has decreased slightly - between 1995 and 1998 these represented 30%-40% of the total number of successful conciliation outcomes, while the figure for 1999 was 28.6%;

• the number of new collective agreements (rather than revisions of existing ones) has declined in the past few years, and new agreements (or global revisions of existing accords) represent only a tiny proportion of the total number of conciliation cases;

• pay issues account for 80.2% of cases, while the second most common issue is the scope of application of agreements (sectoral, geographical or occupational, or in terms of time), which accounts for 7% of cases; and

• however, in 1998 and 1999, the variety of issues referred to conciliation has increased considerably, especially with respect to definition of job functions.

The report also found that the conciliation cases that most commonly result in non-agreement involve the issue of which parties are present at the negotiating table and the existence of parallel negotiations involving both the trade union and employers' sides. The fact that there may be more than one organisation representing employees' or employers' interests can complicate conciliation considerably. Conciliation may not prove successful because one of the parties may have reached an agreement with another organisation - this occurs both on the union and employer side, through more commonly the former. In the years analysed, pay was invariably the subject over which agreement was not reached in these cases. However, only 50% of the cases of failed conciliation were related to direct wages, with the remaining 50% having to do with pecuniary matters that were tied to questions of flexibility or to a global agreement involving other issues. However, the problem caused by this rivalry between competing organisations is more apparent than real in practice, as state intervention through extension directive s frequently means that the workers covered by negotiations in which conciliation has failed receive the same wage increases and working conditions as set out in the sectoral agreement negotiated by competing parties.

In the remaining cases of non-agreement, 51.6% of the reasons were pay-related, while legal, organisational or status questions represented 18% of all cases of non-agreement.

IDICT report conclusions

The IDICT report ends by identifying a need to adapt the whole process of collective bargaining, of which conciliation can be a phase. A comparison of the past few years indicates that the economic and social situation has tended to become more complex. Therefore, improving the process of conciliation has to be analysed within a broader economic and social context. Changes in employment relations at the level of the workplace is one of the points to be addressed. Yet the report also highlights the fact that the role of collective bargaining has often taken second place in defining employment conditions, which are increasingly being set unilaterally by companies by means of "management initiatives".

Commentary

Conciliation has been a strong link in a fragmented bargaining process. However, since neither mediation nor arbitration are a regular part of collective bargaining in Portugal, the dispute-resolution process stops at this point if the workers do not decide to strike. In Portugal strikes may be called at any moment: the right to strike operates independently of any external system of dispute resolution and there is no requirement to follow bargaining procedures prior to exercising this right. The threat of strikes acts primarily as a form of pressure during negotiation.

In Portugal there is significant intervention on the part of the state in defining the individual rights of workers, which are laid down in law (eg holidays and working time). There have been some tentative steps in the direction of giving more freedom to the parties involved in collective bargaining. The transition has been difficult to the extent that collective bargaining was designed to negotiate improvements in relation to the law and now it must become free collective bargaining in a broader and more detailed sense. 1999 saw less conciliation, more regulatory intervention by the state and the same amount of collective agreements (PT9912177F). Perhaps the reduction in the number of requests to the MTS for conciliation means that negotiating parties have more completely taken on the role of negotiators.

There has not been much research done in Portugal in this area for many years, so it is possible only try to make some logical deductions from the limited statistical information available and from the self-evaluation of the services involved. (Maria Luisa Cristovam)