Privatisation reforms human resource management at Lisnave shipyards

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Portugal's major Lisnave shipyards are being privatised. New industrial readjustment and work organisation strategies are reforming human resource management and training standards. However, in a company that has strong trade union traditions, discussions with employee representatives on restructuring have been conducted in a relatively formal and institutionalised way, with little participative input from the employees concerned themselves.

Restructuring Lisnave

The Lisnave shipyards, which were nationalised in 1975, are located in the former industrial zone of the Setúbal peninsula near Lisbon. They have historically played a very important role in the development of the Portuguese labour movement and trade union strategies, particularly since 1974. Lisnave is currently undergoing restructuring, the company being already the result of a merger with Setenave (another shipyard).

The restructuring agreement now entered into provides for the creation of three companies: one is involved in shipbuilding and ship repairs; another in managing infrastructure based on the concession for the Mitrena and Lisnave yards; and the third, in which the state will have a majority holding, will provide human resources from which the group now being set up guarantees to buy labour.

The new plan for the company foresees the state retaining a very low percentage of the capital. It will have as a partner Grupo Mello, and 15% will be bought by the Blomm und Voss group, the leading German shipbuilder, which will enable it to enter new markets. The company to be created will be Portugal's leading shipbuilding and ship repair company.

Human resources policy

The company currently has about 3,000 employees. Since 1994, 3,100 people have already left and the aim is to continue that reduction. Restructuring is expected to lead to a fall in the company's workforce to between 1,200 and 1,500 employees, although at the shipyard there may be as many as 6,000 if subcontracted employees are included. Subcontracting exists in many sectors, such as cleaning, security and transport.

However, many subcontracted workers and companies also carry out the same jobs as the full-time directly employed workers. Their number varies greatly, and between 200 and 300 small companies are involved, some of them tiny. Such workers work the same hours as those directly employed by Lisnave, and are essentially Lisnave employees, since Lisnave makes available washrooms and other services, though under different conditions. Pay is also much the same. Generally speaking, these workers are inducted and overseen by Lisnave supervisors. However, there are subcontractors who fail to abide by the social security regulations.

At the time of restructuring, it was suggested that the state set up a "social company" to take up the excess, and Lisnave would contract them as and when necessary.

The 2,000 employees belonging to the human resources company can be employed on public works and in the area of the shipyards, for example, modernising the railway to make it internationally competitive without forcing the others into unemployment.

The position of workers' representatives

The Southern Union of Metal and Mechanical Industry Workers is contesting Lisnave's restructuring process. It is opposed to the splitting up of Lisnave into three companies, because it is allegedly prejudicial to the country and to the company's employees. According to the union, the agreement reached between the Government and Grupo Mello will increase insecurity of job tenure, and it feels that "in this deal, the profitable elements go to Portuguese and foreign capitalists, and the Portuguese state is left to manage the social problems arising from the deal and anything that cannot be turned to profit".

The union also condemns the ruling Socialist Party's zeal for privatisation, and is making known its displeasure that this process has been carried out without the involvement of workers' representative organisations. It demands that workers' views be heard in all cases relating to them, and where the law so requires. It also demands that legal and contractual rights be maintained, specifically the maintenance of jobs. It undertakes to take all steps to achieve that aim.

The company's workers' commission (comissão de trabalhadores- a statutory enterprise-level employee representative body) is also against the creation of a new company. In its view, "the Government's planned demerger is harmful, particularly in the case of the human resources company". Law 46/79 provides for involvement of a company's workers' commission in any restructuring process, but according to a memorandum that was issued, Lisnave employees were presented with a fait accompli. According to employees, there is also a failure to comply with the previous plan, and they are currently preparing a response to the Government. The workers' commission states that at the meeting that was held, the Prime Minister's representative and the lawyer mediating the negotiations justified the Government's intervention.

The social aspects of the restructuring plan will be the subject of further meetings with the workers' representatives whose organisations are contesting the demerger of the company, and which accuse the Minister of the Economy of failing to fulfil the undertaking to involve employees. They are threatening to hold rallies at the shipyards by way of protest.

During the crisis in the shipbuilding industry in the 1980s, the Lisnave workers' commission negotiated the only company agreement to have been reached to this day in Portugal in which employees undertook to abide by a no-strike clause.

The chair of the Parliamentary Labour Policy Commission believes that the state should have established the conditions for Lisnave's workers, executive staff and small shareholders to be able to take a more active role in the restructuring plan and in the company's capital. He has also stated that the role played by foreign investors is still unclear.


This is yet another phase in the life of the Lisnave company, which for a time was held up as a shining example in the history of trade unionism and the workers' movement in Portugal. It now acts as an indicator of trends in human resource management. The changes brought about by international competition have led the company, even with state capital, into introducing a wide range of contractual arrangements, with a segmented internal labour market and unplanned working conditions.

It is true that the trend is towards greater labour flexibility, but as a nationalised company is concerned, labour unions and the workers' commission have had their say too, although almost as a formality and as a means merely to maintain the institutional equilibrium. (Maria Luisa Cristovam, UAL)

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