Portugal: Latest working life developments – Q3 2017
A clear recovery in GDP growth and the unemployment rate, boost in collective bargaining figures, and unprecedented strikes at Portugal Telecom and Volkswagen’s Autoeuropa car assembly plant are the main topics of interest in this article. This country update reports on the latest developments in working life in Portugal in the third quarter of 2017.
GDP growth and unemployment rate: positive trends
According to Statistics Portugal (INE), GDP growth was 2.8% in the second quarter of 2017, the same as in the first, thus ensuring the best semi-annual growth since 2000. There was also an overall improvement in the main indicators of the labour market. This trend is visible not only in the continued decline of the unemployment rate, but also in employment growth. The unemployment rate decreased by 1.3 percentage points compared with the previous quarter – from 10.1% to 8.8% (men 8.4%; women 9.3%) and 2 percentage points compared year on year with 2016. This is the lowest unemployment rate since the first quarter of 2009 when the employment rate amounted to 8.9% (men 8.4%; women 9.3%). Additionally, between the first and second quarters of 2017, the youth unemployment rate fell from 25.1% to 22.7%, decreasing by 2.4 percentage points. The number of those employed increased from 4.66 million to 4.76 million, representing a growth of 2.2%.
Collective bargaining recovers but coverage remains low
A report by the Directorate-General of Employment and Labour Relations (DGERT) focused on collective bargaining in the first six months of 2017 and shows that, for the first time, the number of collective agreements negotiated (109) exceeds the number of agreements in the same period of 2011 (101) when austerity policies eroding collective bargaining were launched. The policies led to a decline in the number of collective bargaining agreements, which reached a record low in 2012 and 2013 with only around 45 collective agreements for each year.
However, the potential number of workers covered by those collective agreements (and by extension ordinances and other mechanisms), despite the continued recovery in the first six months of 2017 (29.5% more than in 2016), still remained very low, encompassing only 251,769 workers. It is important to remember the dramatic decline (in similar periods) of collective bargaining coverage, from 1.274 million workers in 2008 down to 551,739 in 2011, reaching a record low of 100,246 in 2014. Recent measures on extension criteria might contribute to accelerate the recovery of coverage.
Strikes at Portugal Telecom and Autoeuropa
On 21 July 2017, workers at Portugal Telecom (PT) staged a national strike, the first in 10 years, over the transfer of 155 workers from the telecommunications operator to outside service providers of the Altice Group, which bought PT in January 2015. The strike was supported by all eight unions in PT, who asked the socialist government and the parliament to intervene to stop the transfer. The Labour Inspectorate (ACT) examined the transfer process and concluded that the rights of information and consultation had not been respected by PT and the acquiring companies. In parliament, the left-wing political party Left Bloc, presented a proposal to amend the legislation on transferring workers’ contracts, arguing that the present legislation is not clear enough to prevent such situations.
On 30 August 2017, workers at the Volkswagen car assembly plant Autoeuropa staged a one-day strike over company plans to introduce a mandatory working Saturday, with no rights to customary rates of overtime, a rotating weekly day-off and a fixed day-off on Sunday, as well as three daily shifts. The company argues these measures are required for the production of 240,000 cars in 2018, which will also mean the recruitment of an additional 2,000 people. The strike followed the decision by a majority of the workers to reject the ‘pre-agreement’ negotiated by the management and the works council. The pre-agreement comprised a monthly additional payment of €175, as well as a 25% shift subsidy and one additional vacation day. Workers argued that this would compromise their work–life balance, their family life, as well as their health and well-being. The strike was decided in meetings attended by 3,000 workers and was supported by the most representative trade unions at the company.
According to the Trade Union of Workers in Manufacturing, Energy and Environment in the South (SITESUL), one of the two most representative unions, the main reason for the strike was the workers’ opposition to being obliged to work on Saturdays with only two consecutive days off every three months. Following the strike, the works council resigned. After 3 October there will be elections for a new works council, and discussions will continue on the company plans. The company envisages the new timetable will come into effect in February 2018.