Unions slam employer proposal to freeze wages in insurance

In Portugal’s collective bargaining rounds, the employer organisation in the insurance industry rejected the trade unions’ demand for a 3% pay rise, instead proposing a zero increase. While the employers attribute their position to the impact of the economic crisis, the trade unions highlight the high profits that insurance companies registered in 2009. The federation of the financial intermediation sector also rejects the employers’ position.

The Portuguese Insurance Employers’ Association (Associação Portuguesa de Seguradores, APS) responded to the trade unions’ initial request for a 3% pay rise for 2010 by proposing a zero increase instead. According to APS, insurance workers have been earning far above the negotiated wage scales, mainly from 2000 onwards, and were favoured by the negative inflation observed in 2009.

The collective agreement that is being negotiated between the trade unions and APS covers the majority of insurance workers, totalling 11,000 persons. Three trade unions took part in the negotiations – the Trade Union of Insurance Workers (Sindicato dos Trabalhadores da Actividade Seguradora, STAS), the Insurance Trade Union of Portugal (Sindicato dos Profissionais de Seguros de Portugal, SISEP), both affiliated to the General Workers’ Union (União Geral de Trabalhadores, UGT), and the National Trade Union of Insurance Professions and Similar Occupations (Sindicato Nacional dos Profissionais dos Seguros e Afins, SINAPSA).

Strong trade union opposition

The three trade unions reacted strongly to the APS proposal of a wage freeze in 2010, issuing a joint statement on 30 March 2010 in which they criticised the attitude of APS as inadmissible: although the industry experienced a downturn in its huge profits in 2008, the sector recovered in 2009 with profits above €240 million. The communication issued by STAS, SISEP and SINAPSA highlights that:

It is also regrettable that, after more than 15 years without social conflicts in the insurance sector, and during which we had the channels of dialogue open on collective bargaining, we are now confronted, due to the intransigence of the APS, to embark on a process that we do not want, that we have not brought about, but in which we firmly stand in defence of the legitimate interests of workers.

The strong reaction of the trade unions is understandable, particularly in a year in which the excellent performance of the insurance industry is expected to continue. The overall negative result of €16.78 million in losses for 2008 has already been surpassed in 2009 and, according to provisional data by the supervisory authority the Insurance Institute of Portugal (Instituto de Seguros de Portugal, ISP), profits will reach between €230 million and €260 million. The insurance industry is the leading institutional investor in Portugal, with a market share of around 30% and a share in gross domestic product (GDP) of 9.02% in 2008.

Furthermore, the trade unions representing insurance workers argue that in the banking sector, the trade unions received at least an initial proposal of a 0.5% wage increase. As banking along with insurance make up the financial intermediation sector, the trade unions argue that there is no justification for a pay freeze since, ultimately, the holders of capital share in banks are practically the same as those in insurance.

Support from finance federation

The Finance Sector Federation (Federação do Sector Financeiro, FEBASE), affiliated to UGT (PT0711039I) and representing more than 80,000 workers, supports the insurance trade unions’ demand for a 3% pay increase. FEBASE views the position of APS to be unacceptable.

Maria da Paz Campos Lima, Dinâmia