Debate over the National Action Plan for employment

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Portugal's National Action Plan for employment, in response to the EU Employment Guidelines for 1998, was drawn up with a substantial input from the social partners. The partners negotiated a joint declaration on the Plan in April 1998, which establishes a direct link between economic growth and employment.

The EU Member States have drawn up National Action Plans (NAP s) on employment in response to the EU Guidelines for Member States' employment policies 1998, which are to be submitted to the Cardiff European Council in June 1998. Portugal's NAP was launched for public discussion in March 1998 prior to approval by the Council of Ministers. A preliminary version of the NAP was submitted to the social partners, who sought a number of amendments. When the Plan was subsequently approved in the Council of Ministers, it had achieved consensus among the social partners.

The Portuguese NAP is comprised of two parts. The first, introductory in nature, presents the macroeconomic situation in Portugal, the labour market, and the characteristics of the Portuguese labour force. The labour force is not particularly well qualified nor does it have much "adaptability" potential. Supply and demand do not always match and there are profound differences from region to region within the country. The plan outlines strategies, bases, and objectives dealing with this point.

The second part presents what are considered to be priority measures based on the four "pillars" set out in the EU Employment Guidelines (employability, entrepreneurship, adaptability and equal opportunities).

Critiques of the proposed plan by the social partners

In an overall evaluation of the NAP, carried out by the Standing Committee for Social Concertation (Comissão Permanente de Concertação Social) - part of the Economic and Social Council (Conselho Económico e Social) - the social partners claimed that there is a lack of specific information regarding the financing of the NAP. Furthermore, the NAP does not, in the partners' opinion, contain a schedule for implementation. In addition, some of the measures contained in the proposal are not expected to have much impact in Portugal. The responses of the main social partner organisations to the draft NAP were as follows.

  • General Workers' Union ( União Geral de Trabalhadores, UGT). The NAP diverges somewhat from the spirit and the letter of the relevant European Council resolution. It also lacks a framework for coordination with macroeconomic and labour policies and with the current tripartite Strategic Concertation Pact and collective bargaining (especially with regard to reduction of working time). The NAP is more oriented towards education and vocational training than towards job creation. The training programmes lack content, while the Plan is not very specific in its aims and some measures are very generic. The UGT also states that there is excessive regionalisation in that the plan is to be piloted in 12 areas, none of which includes an urban area experiencing major problems with unemployment.
  • General Confederation of Portuguese Workers ( Confederação Geral dos Trabalhadores Portugueses, CGTP). The Plan does not resolve problems because it does not include goals for economic development and job creation. Jobs will be created through policies of investment in economic development and a reduction in working hours (stimulation of sector and company-level collective bargaining), and through specification of how the Plan will be put into action and how much it will cost. CGTP does not agree with the distinction between active versus passive policies, and wants the Plan to include measures relating to legal protection of work. CGTP rejects the concept of "employability" and continue to prefer a focus on the idea of a work position or job (posto de trabalho). The Plan is seen as a simple declaration of principles which contains no measures to reduce job insecurity. Nor does it consecrate the principle of division of working time into production time and vocational training time, with adequate pay rises and career development to make the trouble of training worthwhile.
  • Confederation of Portuguese Commerce ( Confederação do Comércio e Serviços de Portugal, CCP). While considering employability important in Portugal and believing that the problems of qualification are more of a priority than jobs, CCP does not consider the plan balanced. The part relating to companies is not treated very thoroughly and lacks concrete measures. It also neglects to address the issues of eliminating financial obstacles to hiring permanent workers and the reduction of direct and indirect labour costs.
  • Confederation of Portuguese Industry ( Confederação da Indústria Portuguesa, CIP). CIP does not have much faith that that this is the way to deal with the problems in this area. Its view of the NAP is positive overall, but it considers the Plan short term and transitory. The NAP should deal more directly with the issue of the company as the location where job creation really takes place. Europe is thinking more on a social level than about real development. Sectors need to be prepared for competition through modernisation of labour laws. Employers' organisations await the revision of labour legislation and the creation of incentives for companies to create new jobs.

Response to the criticisms

The social partners presented 127 proposals for altering the draft NAP, some of which were integrated into the final text of the Plan.

The Government has stated that the NAP budget will be PTE 211 billion - made up of PTE 135 billion from the European Social Fund, PTE 45 billion from the state budget, and PTE 18 billion from the increased budget of the Institute of Employment and Vocational Training (Instituto do Emprego e Formação Profissional, IEFP). It has also stated that the problem in Portugal is not short-term unemployment, but rather the low level of training among workers.

The Government stands by the commitment it made in the 1996-9 Strategic Concertation Pact to create 120,000 jobs over the three years. It has also promised an annual increase of 10% for vocational training programs for young people, 25% for widening the scope of vocational training for adults and long-term unemployed people, a doubling of the number of people in apprenticeship programmes, and an increase of 10% in the level of qualification of the Portuguese labour force.

The process will be overseen by a special NAP follow-up commission in which the participation of the social partners will be promoted by the Standing Committee for Social Concertation, while the Ministry of Labour and Solidarity will encourage organisations to promote the plan.

Negotiation of a joint declaration

The social partners met to try to agree on a joint position on the NAP, but initially were unable to come to a consensus. There did, however, able to discuss some trade-offs between reduction of working hours and continuing vocational training, flexibility and reductions of social security contributions (thus cutting labour costs).

When the Plan was submitted, a joint declaration was signed in April 1998 by both the union confederations - CGTP and UGT - and the employers' organisations - CIP, CCP and the Confederation of Portuguese Farmers (Confederação dos Agricultores de Portugal, CAP). In the opinion of some commentators, the conclusion of their declaration (which was annexed to the Plan) meant that the NAP had managed to address all the proposals formulated by the organisations involved. The main points of the declaration are as follows:

  • job creation depends on significant economic growth, which is, in turn, based on investment and increased domestic consumption, export, and company competitiveness. In order for this to be achieved there must be coordination and coherence between economic policy and the promotion of employment. Thus, special attention must be given to the role of fiscal policy and reforms in the areas of social security and public administration;
  • cohesion policies must continue to help overcome deficiencies in the areas of education and training and reduce social inequality among regions and citizens. To achieve this, the social partners are planning to draw up agreements regarding vocational training, promotion of equal opportunity and non-discrimination, rules governing recruitment, probationary periods and work placements, and other concerns that meet the needs of businesses. The negotiations will go hand in hand with the promotion of work/training schemes - a year of job training leading to a qualification after students complete their basic educational requirements - and increased incentives for continuing education among the employed population;
  • the social partners stress their participation in bodies and initiatives such as IEFP, "territorial employment pacts", regional employment networks, the Institute for Innovation in Training (Instituto para a Inovação na Formação, INOFOR), the National Certification System (sistema nacional de certificação), the National Committee on Learning (Comissão Nacional de Aprendizagem), the Community Support Framework's Monitoring Committee, the European Social Fund, and the Standing Committee for Social Concertation;
  • the partners underline their wish to develop the social dialogue on issues such as incomes policy, working time organisation, job descriptions, and career paths; and
  • the partners agree to negotiate at different levels in order to work toward modernising work organisation and revitalising the process of collective bargaining, especially with regard to reducing working time.

The social partners have also expressed their intention of being part of the ongoing evaluation of the NAP.

Commentary

Although the unemployment rate in Portugal is not very high, there is some fear that it will increase in the not too distant future due to the low level of qualification of the workforce. Thus, improving employability is an important issue. Although some studies continue to show a drop in the unemployment rate, tensions in the labour market are likely in the next five years.

Because of this, in addition to improvement in qualification levels, the social partners have established a direct link between economic growth and employment through the idea that sustained economic growth must be guaranteed. The general idea is that the labour market must be revitalised in the direction of full employment, but that this must be done through renovation of structural policy, reorganisation of working time, and improvements in qualification and competitiveness in more or less traditional areas like the textiles industry. (Maria Luisa Cristovam, UAL)

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