Obligatory accident insurance may clarify self-employed workers' status

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From January 2000, insurance for work-related accidents and occupational illnesses will be obligatory for Portugal's numerous self-employed workers, many of whom work in the construction sector where the level of accidents is the highest. The new legislation is one more step towards defining the status of self-employed workers, but the trade unions see it as a means of applying pressure to clarify the status of workers in situations of bogus self-employment.

A 1997 law setting out a new legal regime covering work-related accidents and occupational illnesses - Law no 100/97 of 13 September - has since been going through the process of implementation. Most recently, Decree-Law no. 159/99 of 11 May 1999 requires self-employed workers to carry insurance against accidents and illnesses as from January 2000. As provided for in article 3 of Law 100/97, workers who are self-employed or who work as "independents" must carry insurance that will guarantee the minimum payments laid down in that law and in succeeding legislation. The aim is that self-employed people and their families will be able to receive the same compensation and payments to which other workers are entitled in the event of a work-related accident or illness. Independent workers whose production is only for personal and family use or consumption are exempted from the new insurance requirement. If a worker is both self-employed and employed by another party, any accident will be presumed to have occurred as a result of the regular employment unless there is evidence to the contrary.

What the new insurance entails

The main provisions of the new accident and illness insurance regime for self-employed and independent workers are as follows:

  • workers may choose the amount of insurance they wish to carry, provided that the amount is no less than 14 times the national minimum monthly wage, which in 1999 stands at EUR 306;
  • the insurance must cover a period of at least one year;
  • accidents covered by the insurance must include those taking place in the workplace, on the route between the worker's normal or temporary place of residence and the workplace (even if this route is deviated from in order to meet understandable needs of the worker, or due to an "act of god" or chance occurrence), on the route to wherever the worker may be taken for medical care or treatment in the event of an accident, or between the workplace and the place where the worker takes meals;
  • cost-of-living increases to worker or family pensions will be made in accordance with those set for non self-employed workers, using the insured amount of annual pay as the starting point; and
  • the insurance is valid for any and all parts of the national territory. For other EU Member States where the worker might exercise his or her profession, the insurance is valid for a period of up to 15 days unless the coverage has been extended by prior contractual agreement to include all or some other Member States.

The trade unions' positions

For some time now, the trade unions have been calling attention to the need to protect self-employed workers, particularly those whose are in situations of bogus self-employment. Although these workers are active in all sectors of the economy, they are heavily concentrated in the construction and metalworking industries (PT9702107F). It is precisely these sectors that have the highest rate of accidents - they are in first and second place in the Portuguese statistics on work-related accidents. A report released in August 1999 (General Labour Inspectorate Report, 1st Semester, 1999) shows that the number of fatal work accidents rose from 79 during the first half of 1998 to 92 during the first half of 1999 - a very worrying trend. Of these 92 fatalities, 77 were in the construction sector, where there is said to be "grave lack of risk prevention management and a generalised culture of non-compliance with work safety regulations".

According to the General Confederation of Portuguese Workers (Confederação Geral dos Trabalhadores Portugueses, CGTP) and the General Workers' Union (União Geral de Trabalhadores, UGT), the new law is a very positive step. However, at the same time it places self-employed workers, or rather those "falsely self-employed," in an unfair situation in relation to regular employees who share the same workplace. The self-employed workers:

  • must contribute 32% of their wages to social security, this rate being much higher than that for regular employees; and
  • will now be required to pay for their own work-related accident insurance, while regular employees are covered by the employer's insurance.

UGT believes it would have been preferable if the government had gone ahead with legislation to address the "false self-employment" problem. A draft law on the subject got as far as debate in the legislature, but was never transformed into law.

The union confederations and specialists in labour law believe that the new insurance obligation may turn out to be a vehicle for clarifying the employment contract situation for workers. In cases where companies consent to pay for the new insurance, this fact may be used as evidence that supposedly self-employed workers are in fact regular employees and thus entitled to a normal employment contract.


The new law will have wide-reaching effects. According to the union confederations, there are about 900,000 self-employed workers in Portugal, 500,000 of whom are in a situation of false self-employment because they are performing the same job, in the same place and under the same level of supervision as regular employees. According to statistics, Portugal is second only to Greece as the Member State with the most workers of this type.

The objective of redesigning the self-employed worker relationship and of improving protection for independent workers in Portugal is primarily to protect workers in situations of false self-employment or those who are part of a "secondary labour market" that is marked by job insecurity, though not necessarily low wages. However, these workers have borne, and will continue to bear, all the risks associated with their occupations as they are required to pay for all of their social protection themselves.

The new legislation was seen by the Ministry of Finance (the ministry that produced the decree-law) as providing an improvement in benefits for the self-employed. The trade unions, however, view it for the most part as a means of rectifying a situation where there was an absence of rights. It may turn out to be a step towards a new legal framework and professional status for these workers who have, until now, been excluded from protection under labour laws because they do not have traditional, wage-based work status. The government's position became clear when it set out to require that these self-employed workers be covered by the social security system. Nevertheless, the law is seen by the unions as a transitional phase on the way to a contractual employer-employee work relationship. (Maria Luisa Cristovam, CEU)

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