Proposals to restrict use of fixed-term contracts

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In January 2001, the Portuguese parliament examined a number of proposals from left-wing political parties for legislation aimed at restricting the growing use of fixed-term employment contracts (which affect 13.9% of the labour force).

In late January 2001, the Portuguese parliament considered a number of proposals aimed at amending the current legislation regulating the use of fixed-term employment contract s. These proposals were submitted by the ruling Socialist Party (Partido Socialista, PS), the Communist Party (Partido Comunista Portugês, PCP) and the Left-wing Bloc (Bloco de Esquerda, BE). The current legislation - Decree-Law No. 64-A/89 of 27 February 1989 - has been heavily criticised by trade unions, notably because it allows companies to renew fixed-term contracts twice, while it is claimed that some companies use this type of contract to a degree beyond that provided for by the law

Two of the draft amendments considered by parliament propose that:

• fixed-term contracts should be subject to the principle that a permanent function within a company should imply a standard contract (of indefinite duration). Fixed-term contracts should be used only for types of work that are, by nature, temporary; and

• young or long-term unemployed persons should not be hired on a fixed-term contract

The third proposal also aims to clarify the situations in which such contracts can be used and proposes that, in cases where they are misused, the contract can be annulled. The various proposals seek to make it more difficult to evade the law in this area and to oblige the Labour Inspectorate to be more efficient in enforcement.

The various drafts were discussed by the parliamentary Social Security and Labour Commission and by the social partners. The political parties who put the proposals forward consider that they are not final and can be discussed further. The government took an active part in the debate and opposes changing the law radically, on the grounds that this would cause the labour market to shrink. It considers that there is merely a need to clarify those situations in which fixed-term contracts can to be used.

The priority given to job security in the proposals on reforming fixed-term contracts is a reflection of the growing concern for stable employment in Portugal. Fixed-term contracts cover 13.9% of the labour force and the figure has been constantly rising - up 0.8 percentage points in the year to August 2000, for example (according to Estatísticas do Emprego, 2º trimestre de 2000). Women account for 54.3% of employees on fixed-term contracts and this proportion has grown steadily - while the proportion of male employees on fixed-term contracts fell by 1.1 points in the year to August 2000, the proportion of women rose by 2.4 points. As part of the general category of "precarious employment" - which also includes temporary agency work, outsourcing and subcontracting and other non-standard forms of employment - fixed-term contracts are one of the priority issues on trade union agendas.