Portugal: Latest working life developments – Q2 2017

Efforts to improve equality and social cohesion, softening the cut in unemployment benefit, early retirement without penalties for long service and union calls for an end to wage and promotion freezes in the public sector are the main topics of interest in this article. This country update reports on the latest developments in working life in Portugal in the second quarter of 2017.

Efforts to improve equality and social cohesion

Effective from 18 May 2017, Resolution 82/2017 (PDF) repeals the regulations set up by the government of the centre-right coalition Social Democratic Party and the People’s Party (PSD/CDS), prompted by the Memorandum of Understanding (MoU) with the Troika. The regulations introduced criteria of representativeness for employers’ associations to extend collective agreements – Resolution 90/2012 (PDF) and Resolution 43/2014 (PDF).

The new resolution requires collective agreement extensions to promote social equality and gender equality and the constitutional principle of 'equal pay for equal work'. Extension decisions will be based on the following indicators: the effect on the wage bill and economic impacts; the level of wage increase; the impact on the wage scale and on the reduction of inequality; the percentage of workers to be covered (in total and by gender); and the proportion of women that will benefit. In addition, the new resolution sets a deadline of 35 days for analysis, public consultation and issuance of extension orders. It also puts in place new mechanisms to implement the measure, including the creation of a permanent technical committee, which involves the Directorate-General for Employment and Industrial Relations (DGERT) and Office of Strategy and Planning (GEP) departments of the Ministry of Labour.

Softening unemployment benefit cuts

Effective from 31 May 2017, Decree-Law 53-A/2017 (PDF) amends the legal regime of social protection in unemployment, restricting the 10% reduction in the amount of unemployment benefit after 180 days; this reduction will apply only to benefits higher than €421.32 (the value that corresponds to the Social Support Index, IAS).  It also establishes that unemployment benefit cannot be lower than the IAS. The 10% reduction, introduced in 2012, was one of the requirements of the MoU. The largest trade union, the General Federation of Portuguese Workers (CGTP), protested that the amendment did not do enough to restore an adequate level of social protection and argued that all reduction of unemployment benefit should be repealed.

‘Regime of requalification’ replaced

Effective 30 May 2017, Law No. 25/2017 (PDF) replaced the so-called ‘regime of requalification’ law created by the PSD/CDS government. A new ‘regime of professional development’ takes its place. The regime of requalification targeted civil servants whose roles had been lost due to restructuring; it set out defined wage cuts (40% in the first year and 60% thereafter) and left them open to the possibility of dismissal. The new ‘regime of professional development’ eliminates these two measures and promotes, instead, a process of training and skills upgrading aimed at professional integration.

Early retirement without penalties

Labour Minister José António Vieira da Silva announced legislation on 27 June 2017 that will make it possible for workers with many years of long service to retire early without being penalised. The measure will cover workers aged 60 or over who have paid 48 or more years of contributions, and those who have paid contributions for 46 years or more and who began to pay social security contributions before the age of 15. The CGTP and the General Union of Workers (UGT) argue that early retirement, without any type of penalty, should be granted to all workers of 60 years of age and with 40 years of service.

Unions urge lifting of public sector wage and promotion freezes

In the second quarter of 2017, after a long wage and promotion freeze since 2010, trade unions in the public sector put increased pressure on employers, demanding improvements in conditions. They also want an extension of the 35-hour week to all workers in the public sector, in particular those with individual contracts in the health sector. While the agenda of the CGTP and UGT unions in the public sector is similar, their strategies are different. Trade unions UGT, Union Federation of the Public Administration (FESAP) and Technical Civil Servants’ Union (STE) signed an agreement with the government on 5 May 2017 on the calendar of negotiations, including unfreezing of  promotions (July), precariousness in public employment (October), recruitment (November) and health and safety at work (December). In contrast, on 26 May, trade unions CGTP and Common Front organised a national strike of public sector workers to put pressure on the government to speed up the process of negotiations and reach a swift resolution.

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