Sectoral bargaining problems in the vehicle industry

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At the end of 2002, Portugal's complicated and often overlapping system of collective bargaining is highly topical, as the government's proposal for labour law reform (in the form of a new Labour Code) seeks to overhaul some of the existing bargaining mechanisms. The situation is illustrated by the vehicle industry, where negotiations over a new sectoral agreement are at a stalemate, against a background of multiple agreements covering various groups of workers, sometimes with more than one agreement applying to the same group.

Here we examine the current complicated situation of collective bargaining in the Portuguese vehicle industry, and the problems in negotiating a new sectoral agreement during 2002.

Collective bargaining in the vehicle industry

The various collective agreements for the Portuguese vehicle industry have quite wide-ranging sectoral coverage, encompassing as they do employees of manufacturers and dealers, as well as small repair garages. These agreements are signed by five employers’ associations, notably: the Vehicle Manufacturing Industry Association (Associação da Indústria de Montagem de Automóveis, AIMA); the Portuguese Vehicle Trade Association (Associação do Comércio Automóvel de Portugal, ACAP); and the National Association of Vehicle Trade and Marketing Companies (Associação Nacional das Empresas de Comércio e Representação Automóvel, ANECRA). A relatively large number of trade unions have signed the various existing agreements, in particular: the Federation of Commerce and Service Workers' Unions (Federação dos Sindicatos dos Trabalhadores de Comércio e Serviços, FETESE), affiliated to the General Workers' Union (União Geral de Trabalhadores, UGT); the UGT-affiliated Office, Services and Commerce Employees Union (Sindicato dos Trabalhadores de Escritório, Serviços e Comércio, SITESC); the Portuguese Federation of Commerce, Office and Service Unions (Federação Portuguesa dos Sindicatos do Comércio, Escritórios e Serviços, FEPCES), affiliated to the General Confederation of Portuguese Workers (Confederação Geral de Trabalhadores Portugueses, CGTP); the CGTP-affiliated Federation of Metalworking Industry Unions (Federação dos Sindicatos dos Trabalhadores da Indústria Metalúrgia); and the UGT-affiliated Union of Metalworkers and Allied Trades (Sindicato dos Trabalhadores da Indústria Metalúrgica e Afins, SIMA).

In Portugal, sectoral collective agreements tend to be 'vertical' in nature. In other words, they apply to all companies covered by those employers’ associations that have signed the contract, and all employees, irrespective of their category, provided that they are represented by trade unions. Their job or category is irrelevant, as long as it is covered by the union’s statutes and falls within the categories for which the agreement has been negotiated.

The following are amongst the main sectoral agreements currently applicable to the vehicle sector:

• the two most recent agreements were signed in the commerce and services area in 1999, and published in the Ministry of Social Security and Labour's Labour and Employment Bulletin (Boletim do Trabalho e Emprego 4/1999). They were negotiated by ACAP and other employers' associations and by FETESE, SITESC and FEPCES respectively on the trade union side. Their main content related to the revision of wages. The FETESE agreement was extended by ministerial extension directive to all employees in the sector working for companies not covered by the employers’ associations. Furthermore, in 2002, an adoption agreement was signed to include the Electrical Industries Union (Sindicato das Indústrias Elécticas) in this agreement;

• in manufacturing, a sectoral agreement between the vehicle sector employers’ associations and the Federation of Metal Industry Unions was negotiated in 1982, and underwent numerous alterations, especially concerning wages, until 1997. Since that date it has remained in force, without amendments; and

• an agreement between employers’ associations and SIMA was signed in 1996 and amended in 1998.

In the trade and services sector, amendments to the SITESC agreement agreed in 2002 (published in Labour and Employment Bulletin 8/2002), provided for the possibility of annualising working time, which is one of the main aims of employers in the sector, as it may help solve the problem of peaks of demand in the industry. Initially, this agreement applied only to the north of Portugal, which is the geographical area covered by SITESC. However, employers’ associations successfully requested an extension directive extending it to the whole country, as they felt that its limitation to the north might create unfair competition. Some of the other unions representing employees in the sector strongly opposed this move.

Company-level application

Given the way in which the industrial relations system works in Portugal, any of the abovementioned sectoral agreements can apply to vehicle manufacturing and trade companies provided that they have employees represented by the unions that have signed the agreement, and provided that the companies are members of the signatory associations.

In the vehicle manufacturing sector, companies negotiate agreements with workers' commission s, normally affiliated to CGTP. These agreements have no formal legal force. There is also a tendency to continue to implement the sectoral agreement signed with metalworkers' trade unions in 1982, not with regard to wages, but in terms of the rules most favourable to the employee, such as those on the payment of overtime or the organisation of working time.

Current difficulties

Negotiations over a new agreement, involving the Union of Office, Commerce, Service and New Technology Workers' Unions (Sindicato dos Trabalhadores de Escritório, Comércio, Serviços e Novas Tecnologias SITESE) - a member of the UGT-affiliated FETESE - have been at stalemate since August 2002. The union sees the situation as follows:

• there should be separation between vehicle manufacturing industry, on the one hand, and trade and services on the other;

• the points to be negotiated should be closer to the industrial relations reality of companies, in order for the agreements to be truly effective. This situation is particularly noted in the manufacturing sector; and

• companies do not want to negotiate just wage increases, but want to review the agreement as a whole, in order to find ways of achieving greater flexibility, offering some incentives in return, and they also want negotiations to involve a larger number of unions.

Commentary

The framework within which negotiations in the vehicle sector are currently taking place adds weight to the debate on collective bargaining mechanisms that has been underway for a number of years in Portugal (PT0108162F and PT9711147F) The case of the vehicle sector clearly demonstrates the challenges that bargaining mechanisms will have to face in the future, in order to find solutions to the following issues:

• the 'parallel' nature of sectoral agreements, which results in different rules being applied to different employees of the same company, depending on which union they belong to, which can even be the case within the same work categories and for the same job. This situation can conflict with the constitutional principle of non-discrimination, and, according to the employers, creates problems within companies regarding the applicability of sectoral agreements; and

• the lack of any criteria in Portugal for analysing the representativeness of trade union organisations has led to an increase in the number of agreements covering the same sector. Establishing such criteria would make negotiation easier.

Some of these issues relating to bargaining mechanisms are addressed in the government's proposal for a Labour Code ([Código do Trabalho](http://www.governo.gov.pt/pt/Conselho de Ministros/Documentos/20021212DossierCodigoTrabalho.htm)) (PT0210102F), which is due to be debated in parliament in early 2003 (PT0212104F). (Maria Luisa Cristovam, UAL)