Mixed reaction to new law on employment contracts in the public sector

On 27 August 2008, the President of the Republic promulgated a Bill defining a new employment contract system in the public sector. The Bill, approved by the parliament on 18 July 2008, was the result of a previous agreement between the socialist government and the UGT-affiliated public sector trade unions. However, the approval of the Bill in the parliament, as well as its promulgation by the President of the Republic, has generated controversy. The resulting legislation, Law No.º 59/2008, published on 11 September 2008, will come into force in January 2009, and by then the regulations regarding public sector employment will be much closer to the ones that govern the private sector.


On 27 May 2008, the socialist government reached an agreement on the an employment contract system in the public sector (Regime de Contrato de Trabalho em Funções Públicas, RCTFP) with the Trade Union Front of Public Administration (Frente Sindical da Administração Pública, FESAP) and the Technical Civil Servants’ Union (Sindicato dos Quadros Técnicos do Estado, STE) affiliated to the General Workers’ Union (União Geral de Trabalhadores, UGT). The Common Front of Public Administration Unions (Frente Comum dos Sindicatos da Administração Pública, FC), affiliated to the General Confederation of Portuguese Workers (Confederação Geral dos Trabalhadores Portugueses, CGTP) did not sign the agreement. On 29 May 2008, the Council of Ministers approved a draft Bill no. 209/X, on the RCTFP and presented it to parliament (PT0806029I).

Developments and controversy

On 18 July, parliament approved the Bill, with assenting votes from the socialist majority. The centre and right wing parties abstained and the left wing parties voted against the Bill.

From the trade union side, the reactions to the approval of the draft Bill were mixed. As expected, the FC/CGTP was strongly opposed and demanded that some of the provisions of the Bill be examined for unconstitutionality – it asked the President of the Republic to send it to the Constitutional Court for evaluation.

UGT trade unions were, however, divided. FESAP welcomed the draft Bill and its approval, but the STE/UGT, one of the two trade union signatories of the agreement with the government, made various critical comments. STE highlighted that, contrary to what had been agreed, the draft Bill proposed to apply various currently Labour Code (LC) rules to public sector employees, before the ongoing revision of the Labour Code was completed, a highly critical issue, particularly in relation to the system governing dismissals. In addition, STE complained that, in relation to various issues of the RCTFP, the trade unions have little participation and their rights are undermined in comparison with the private sector. They also stressed that the working time adaptability framework is too open.

The president of the Republic, Anibal Cavaco Silva, passed the Bill on 27 August, without considering FC/CGTP’s proposal to send it to the Constitutional Court. FC/CGTP and STE/UGT criticised, directly and publicly, this decision. STE/UGT criticised the ‘bad timing’ of the promulgation, as the revision of the LC is still under discussion. According to this trade union, the LC revision should be approved first and only afterwards should the public sector regime be adapted. FESAP/UGT welcomed the move, stating that the new law will contribute to a more modern and efficient public administration.

In one area, the timing of this bill seems particularly critical: the legal possibility to dismiss public employees on the grounds of ‘failure to adapt’, in accordance with the present LC. Dismissal on these grounds was introduced five years ago in the private sector by the 2003 Labour Code and generated strong controversy. During the ongoing process of LC revision, the government withdrew the proposal on this issue in order to obtain the agreement of UGT on the reform of labour relations on 25 June 2008, when the tripartite agreement for a new system of regulation of industrial relations, employment policy and social protection was signed (PT0807019I; PT0809019I). Therefore, trade unions in the public sector had the legitimate expectation that the government retreat in this matter in the private sector might have consequences in the public sector framework. However, this was not the case as it did not influence at all the content of this new law for the public sector.

From January 2009, the only difference between the public sector dismissal based on the ‘failure to adapt’ and the private system as defined by the Labour Code (before revision) is that when it comes to technicians and senior technicians who have not met ‘the goals fixed in advance and formally accepted’, this dismissal in the public sector takes into account performance evaluation.


Despite the promulgation of Law No. 59/2008, the controversy does not seem to be over. Above all, the timing of this process raises some questions. First, the approval and promulgation took place in the period when most public sector employees were on holiday. Therefore, it is possible that the autumn return to work might bring further tension. Secondly, and substantially more importantly, the law aimed at adapting the legal framework governing the employment contract system in the public sector, bringing it into line with the private sector system, was approved and promulgated before the process of the revision of the LC was finished. Law No. 59/2008 was published on 11 September, a week before the announced date for the beginning of the parliamentary debate on the LC draft bill, on 18 September. As, in the meantime, the LC draft Bill will be approved, one can expect that in the near future it will have consequences in terms of the the adjustment of the public sector legal framework, which has now been promulgated.

Maria da Paz Campos Lima, Dinamia

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