Unions force government back to table on working time

Trade unions opposed the Portuguese government’s plans to increase daily working time by half an hour without pay. Ignoring their protests, the government sent a draft bill to parliament without discussing it with the social partners. Employers were not enthusiastic about the proposal, with the exception of the Portuguese Confederation of Industry. After trade union protests and escalating criticism, the government returned to tripartite negotiations on the issue.

Background

During the presentation of the state budget proposal for 2012, in October 2011 the Portuguese government announced its intention to increase daily working time in the private sector by half an hour without giving workers any financial remuneration, arguing that this would increase the country’s competitiveness.

Negotiations on a financial bailout for Portugal, concluded in May 2011, led to a Memorandum of Understanding (289Kb PDF) agreed with the European Commission (EC), the European Central Bank (ECB) and the International Monetary Fund (IMF). A demand in the Memorandum to reduce employers’ social security contributions provoked strong opposition, and the government believed that increasing working time without pay could replace it without any negative effect on the social security budget, while also having a positive impact on competitiveness.

The proposed increase in working time would only apply in the private sector, with the government justifying it by saying private sector employees had not been subject to the wage and bonus cuts of public sector employees. It presented this argument against a background of protests from public sector trade unions about the unfairness of cuts there, arguing that public employees were being discriminated against.

Government’s draft bill proposes increased working time

The proposal to increase working time was one of the main issues that mobilised two trade union confederations, the General Confederation of Portuguese Workers (CGTP) and the General Workers’ Union (UGT) to call for a joint general strike on 24 November 2011 (PT1110019I).

On 28 November 2011, the government held a meeting at the Standing Commission for Social Concertation (CPCS), a committee of the tripartite Economic and Social Council (CES), where it promised to discuss the working time increase. But a week later, on 7 December 2011, the Council of Ministers approved a draft bill on the increase in working time, without the promised discussions with the social partners.

On 16 December 2011, draft bill No 36/XII was presented to parliament. It was expected that the bill would be voted upon by the end of January. Following Portuguese legislative procedures, public discussion on the draft bill was open from 16 December until 18 January 2012.

The draft bill proposed that increased working hours in the private sector would remain in force for the full three years covered by the Economic and Financial Support Programme, from 2011–2014. The increase would be applied proportionately to part-time workers. Specific groups are exempted, such as pregnant women, minors, student workers and people with a disability or chronic disease. The bill also includes an ‘anti-abuse’ clause, which states that a company many not make use of the extra time clause within 30 days of any job losses. The increased working hours apply to current and future employment contracts.

Trade union reaction

For the trade union confederations, the question of increased working time was not even open to debate. The fight for a maximum 40-hour working week has been long and arduous and it was only in 1996 that statutory weekly working hours were capped at this level in Portugal. As a result, the increase of this threshold is seen as an unacceptable step backwards by both the CGTP and UGT.

Furthermore, the trade union confederations stressed that the measure could push already high levels of unemployment even higher by causing massive redundancies.

The CGTP called for a national demonstration on 18 January against the increase in working time, while the UGT stressed that the draft bill prevented the possibility of any compromise on growth, competitiveness and employment.

A study by the economist Eugénio Rosa, published in December 2011, estimates that the proposed increase in the weekly hours of full-time employees would amount to 315.7 million hours of free work per year. This would correspond to €1.76 billion that workers would not receive in remuneration.

The increase in weekly working time of 2.5 hours per worker would effectively be equal to a 5.9% cut in hourly wages, which would mean that all workers would receive less both for overtime hours, and for any type of work for which payment is calculated on the basis of the value of one working hour. The study added that the increase in working time of 315.7 million hours in the private sector would make it possible for more than 183,000 workers to be considered ‘surplus’ by employers, paving the way for thousands of redundancies. The study quoted Eurostat figures showing that Portuguese employees already work an average 1,719 hours a year, compared to 1,655 hours in Germany.

Employer reaction

Among the employer confederations, the Confederation of Portuguese Industry (CIP) was most interested in increasing working hours. CIP represents companies in the manufacturing sector, where in general the collectively agreed weekly working time is 40 hours. However, manufacturing companies currently have more production capacity than demand, and by increasing weekly working time and reducing hourly wages, they would be able to cut jobs and reduce overtime expenses.

The other employer confederations represented at the CPCS, namely the Portuguese Trade and Services Confederation (CCP), the Portuguese Confederation of Farmers (CAP) and the Portuguese Confederation of Tourism (CTP), were not enthusiastically in favour of the increase but equally had no major objection to it. They took the view that increasing workers’ maximum annual hours ‘accounts’ would be more useful to companies that needed to respond to fluctuations in demand.

Return to tripartite dialogue on working time increase

The presentation of the draft bill without previous discussion with the social partners at the CPCS angered trade union confederations and was seen as a unilateral decision undermining workers’ rights.

The opposition parties, including the main opposition Socialist Party (PS), also protested at the proposed increase and have criticised the government’s attempts to make decisions without social dialogue. On 9 January the National Secretariat of PS demanded the government withdraw its working time proposal and discuss labour reforms at the CPCS.

After a period of bilateral meetings with the social partners the government decided to present a final proposal on the Compromise for growth, competitiveness and employment to the CPCS on 16 January 2012.

The proposed increase in working time was among the issues put forward for discussion. The government was prepared to back down on the issue to secure the return of social partners to the negotiating table. It was aware that trade union confederations would not discuss any other issues unless the issue of working time was reopened at the CPCS.

Maria da Paz Campos Lima, Dinâmia