Restructuring continues at Portugal Telecom

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The liberalisation of the telecommunications sector in Portugal, which took a further step in January 2000, has gone hand in hand with a restructuring of employment at Portugal Telecom. While the past two years have seen the recruitment of an appreciable number of young people, nearly 20% of the company's workforce has departed. Trade unions have highlighted the growing "atypical" basis of employment at the company and the fact that a number of collectively agreed issues, such as career paths, are no longer relevant in the present context.

The telecommunications sector has recently been going through a period of fierce competition in Portugal. In January 2000, another step toward liberalisation of the sector was taken when Portugal Telecom (PT) lost its exclusive rights as a telecoms service provider. This ushered in all-out competition, with new fixed-network operators joining a sector which for decades had been a monopoly. PT has entered its fourth stage of privatisation, and has also made a number of strategic alliances and invested heavily in Brazil.

PT is also redistributing a large portion of its services throughout companies in which it holds shares and among licensed service firms, and through outsourcing. In addition, it is condensing its regional services and closing social services, such as bars, in a move to terminate all non-strategic activities, while it reorganises areas such as its fixed-network communications operation.

While PT has been attempting to move closer to the needs and demands of the "information society", with its potential for generating new jobs, it has simultaneously been cutting jobs, with the 16,000-strong workforce reduced by 6,000 since 1995. According to a recent company report, between 1998 and 2000, Telecom lost 20% of its workforce as a result of a programme aimed at increasing efficiency. Most of the job loses have been in fixed-network telephone services. As part of a commitment made as part of the fourth stage of privatisation, in 1999 all the workers who were slated to depart over a three-year period left the company. Nearly 2,800 employees, aged 45 years or older, have left the company through early retirement and voluntary contract termination. At the same time, close to 200 recent graduates have been hired for the commercial area, basic PT service infrastructures and PT Prime advanced services for businesses. This pattern of hiring is expected to continue through 2000.

According to a manager in the company's human resources department, the efficiency programme has had many advantages: the number of full-time workers is now more suited to the needs of the company; social tensions have been avoided, as participation in the programme has been voluntary; motivation has been kept high among remaining workers, since any fears of an uncertain future have been removed; and PT has saved on physical working space and on allowances, bonuses and other types of expenditure.

According to an information bulletin put out by the company, the amount spent in compensation for departing employees has been fully made up by the stock market sale of part of the shares in the PT-owned company, Portugal Multimedia.

The National Union of Telecommunications and Postal Workers (Sindicato Nacional dos Trabalhadores dos Correios e Telecomunicações) - affiliated to the General Confederation of Portuguese Workers (Confederação Geral dos Trabalhadores Portugueses CGTP) - has highlighted some controversial points of the PT programme:

1. employees between 45 and 48 years of age and those with 25 years of company service were given the option to suspend their contracts while continuing to receive full wages until retirement age. This scheme took in nearly 2,000 employees whose jobs had become obsolete in the aftermath of technological progress. As part of this contract suspension programme, employees continue to receive their basic pay and allowances related to length of service, plus a five-year cost-of-living increase. Those 48 years of age or older, or employees with 28 or more years of company service, keep their basic pay without the cost of living increase; and

2. a group of close to 400 employees from the computer section were outsourced to two companies for a period of one year. The union asserts, however, that there is no guarantee that these workers will be able to return to the parent company, since their former job positions no longer exist. According to the new arrangement, the employees will be covered by the PT company agreement for 12 months, after which they will be subject to the new company's regulations or general labour law. In any case, fewer rights will be guaranteed.

According to a number of organisations representing workers, the departure of 6,000 PT employees since 1996 has been accompanied by the recruitment of many new workers under precarious contracts: 80% of the employees working in on-line customer services are on temporary contracts.

The current PT company-level agreement was negotiated in 1996 and signed by 22 unions. In 1999, the Democratic Union of Telecommunications and Postal Workers (Sindicato Democrático dos Trabalhadores das Telecomunicações e Correios, Sindetelco) - affiliated to the General Workers' Union (União Geral de Trabalhadores, UGT) - and 13 other unions negotiated changes to the agreement's provisions on job descriptions, the transfer of employees, vocational training, working hours, maternity leave, time off and pay.

According to the National Union of Telecommunications and Postal Workers, the recent PT restructuring has fundamentally changed the former identity of the company, emptying the company-level agreement of meaning, especially with regard to career advancement, qualifications, allowances and other types of pay.