Unions set out demands for 2003

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In September 2002, Portugal's two main trade union confederations presented their demands for 2003, at a time when the government is seeking to control the public deficit against the background of a sluggish economy, and when a fierce battle is underway over proposals for labour law reform. The unions' agendas include real increases in pay and pensions, 'quality' employment, improvements in social security and measures to combat fraud and tax evasion..

In September 2002, Portugal's two main trade union confederations - the General Confederation of Portuguese Workers (Confederação Geral dos Trabalhadores Portuguese, CGTP) and the General Workers’ Union (União Geral de Trabalhadores, UGT) - announced their demands for 2003. They cover pay rises, the 'quality' of employment, health, social security and tax policies.

The context is one in which the coalition government of the centre-right Social Democrat Party (Partido Social Democrata PPD/PSD) and the right-wing People's Party (Partido Popular, CDS/PP) is seeking to combat the country's mounting budget deficit (PT0205101N), in order to meet the criteria of the EU Economic and Monetary Union stability pact, while economic activity is proving slow to recover from its slowdown. At the same time, a fierce battle is under way over the government's recent proposal for a new Labour Code, which would replace most current labour legislation by bringing existing provisions together in a single text, while amending some of them (PT0208101N).

Both union confederations state that Portugal is not experiencing an economic crisis and draw attention to: the consequences of the government’s macroeconomic policy choices; the need for economic activity to recover; and the fact that low productivity and labour costs are not the fault of labour legislation inflexibility alone. The unions believe that:

• the government's present efforts to control the public deficit cannot be the only priority for economic policy, as currently appears the case, nor can these be carried out at the cost of cutbacks in public social expenditure. Controlling the deficit should, rather, run parallel to efforts to develop the national economy. The current economic data are disturbing and suggest that economic activity is paralysed;

• the structural weaknesses of the Portuguese economy should be eliminated, while business reorganisation is decisive if productivity is to increase. Adaptability is an essential element in motivating and integrating workers and low pay must not persist. Productivity has risen more in Portugal than in most European countries; and

• special care must be taken to draw up accurate economic forecasts and thus prevent workers suffering losses that cheat them of income when pay levels are revised (ie where pay rates are increased in the light of inaccurate inflation forecasts).

CGTP agenda

The CGTP document setting out its demands policy for 2003 stresses the importance of:

• a national strategy based on a model of economic development that invests in the productive sector and in exports - ie areas in which competitiveness is based on innovation and a qualified workforce, and not on low pay and low-quality employment;

• strict ethical standards and efforts to combat fraud and tax evasion; and

• modernising the public administration and put a halt to the privatisation process in public services (PT0209102N).

The key demands of CGTP for 2003 include:

• a 5.5% pay increase, with a minimum monthly increase of EUR 30, and a national minimum wage of EUR 378 per month;

• 'quality' in employment, with attention given to personal development and the upgrading of workers’ capacities, equality of opportunity, the abolition of precarious employment; the legalisation of the position of immigrant workers, and more intensive inspection, in particular with regard to accidents at the workplace;

• a reduction in the working week to 35 hours, an increase in paid annual leave to 25 working days and the upgrading of the workforce’s skills;

• a real attempt to combat fraud and tax evasion, reinstatement of VAT at 17%, subsidised housing loans and other tax measures;

• an improvement in family allowances and pensions - which should converge with the national minimum wage - and revision of measures relating to disability benefits and the list of recognised occupational diseases; and

• the promotion of local basic care services for citizens, and the definition of rules to separate the public health system from the not-for-profit and private system.

UGT agenda

UGT states that over the past year workers’ incomes have been seriously harmed by the fact that the inflation forecasts that provided the basis for pay and pension increases have been unrealistic. UGT considers it necessary, by means of social dialogue, to negotiate a 'reference rate' of inflation and an incomes policy, with particular attention being paid to the minimum wage, retirement and disability pensions and the principal allowances. UGT proposes for 2003:

• a 5% pay increase - the rate of inflation forecast by the Bank of Portugal (Banco de Portugal) is between 2% and 4% - though this figure should be adjusted by way of collective bargaining to real conditions in the different companies and sectors, plus a rise in the national minimum wage to EUR 370 per month;

• measures to recoup losses in the value of pensions. For pensions that are calculated on the basis of real earnings or with reference to the national minimum wage, an increase of 6.3% is proposed;

• combating illegality at the workplace, which means increasing labour inspections and the sanctions applied in cases of abuse, addressing the high rate of accidents at work, promoting a policy of integration for migrant workers and combating trafficking in labour;

• guaranteeing that workers have the right to at least 20 hours’ training per year in 2003, rising to 35 in 2006;

• guaranteeing that workers aged 16 to 18 and without compulsory schooling or an initial qualification spend at least 40% of their working time in training; and

• a taxation policy that does not severely penalise dependent workers, but combats fraud and tax evasion.

Future developments

The governor of the Bank of Portugal has reiterated two proposals which were previously made in relation to the 2002 bargaining round, but met with little response from the two trade union confederations, namely:

• aligning pay increases to the rise in costs in the 'euro zone';

• the introduction of two-year pay agreements

In response, the union confederations state that government institutions are not capable of estimating the course of inflation more than six months in advance, and that the situation in Portugal does not develop in the same way as in Europe as a whole.

The two confederations have been in regular contact to assess the current economic and political situation and are calling for the government to review its various current reforms. Although they state that no joint action is planned, both unions have threatened a general strike, particularly in connection with the government's proposals for a Labour Code. The unions are calling for the social partners to participate more intensively in defining policies and reforms, with the UGT demanding greater use of the Standing Commission for Social Concertation (Comissão Permanente de Concertação Social). On various occasions, the government has referred vaguely to the need to draw up a national stability pact .

Commentary

The trade unions' claims for 2003 seem to be integrated into a broader array of debates, especially that on the proposed Labour Code, pushing the debate on incomes policy into the background. (Maria Luisa Cristovam, UAL)