Pressure mounts to protect standard employment relationship

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Some Portuguese sectors have been characterised by a widespread move away from standard, regular and permanent jobs towards temporary forms of employment, including irregular and casual work, homeworking and certain forms of self-employment. These developments are the result of an interplay between macroeconomic conditions, company strategy and labour legislation. However, pressure is mounting amongst the social partners to counter further fragmentation of standard employment statuses.

The legally protected contract of indefinite duration has traditionally represented the typical model for the employment relationship in Portugal. However, the employment relationship has now fragmented within organisations to such an extent that the notion of a single universal standard is no longer valid as the model, since other forms of employment status and contract have greatly multiplied. Examples include fixed-term contract s (regulated by Decree-Law No.64A, 27 February 1989, and amended by Law No.21/96); temporary-employment agency work (regulated by Decree-Law No.358, 17 October 1989); and homeworking (regulated by Decree-Law No.440, 14 November 1991). Legislation on part-time work is currently being looked at.

Trade union claims

Trade unions have been stepping up their activity in an attempt to reduce what they see as the excessive and inappropriate use made of temporary and seasonal work and self-employment, or the use made of overtime outside the conditions laid down in the legislation. The unions oppose these forms of increasingly precarious employment, as well as failure to comply with employment legislation.

Recently some building workers' trade unions, particularly in Porto and Braga have drawn attention to the fact that some enterprises have an extremely limited number of workers employed on indefinite contracts (as low as 20% in some cases) and also to the existence of certain enterprises acting as temporary employment agencies. These enterprises have an irregular status, hiring workers and sending them to other European countries where, it is claimed, they are subjected to degrading conditions: the workers often do not receive the appropriate payment for their work, or are entered into further subcontracting arrangements. In the short run, the trade unions intend to meet the various organisations responsible for this situation.

The unions representing hotel and catering workers say that there have been abuses in the use made of fixed-term contract, while the Bank Workers' Trade Union has noted an increase in overtime and weekend work without the workers receiving the corresponding payments established by collective bargaining. Large supermarkets and shopping centres also recruit some of their workforce on a self-employed basis, working without a fixed rota and obliged to perform a variety of different tasks.

The Labour Inspectorate (Inspecção Geral do Trabalho, or IGT) recently announced that it was cracking down on irregularities in the wording of contractual arrangements both in the building sector and in enterprises where there are a high number of unpaid working hours, such as banks.

Labour market conditions and flexibility

According to research published by the Ministry for Training and Employment (Ministério para a Qualificação e Emprego), 38.5% of workers have non-standard forms of employment. There is, for example, a growing number of self-employed workers (26.1%) in sectors such as building, wood and furniture, hotels and catering, transport and repairs.

The research also reveals an increase in the number of small enterprises (nine employees or fewer) and in the number of workers employed by them. Between 1990 and 1993, these enterprises rose from 75.1% to 77.7% of the total number of enterprises, and are particularly concentrated in textiles, metalworking, building, transport and company services (Employment Records, MQE (Statistical Department of the Ministry for Training and Employment), Lisbon (1993)).

A recent study ("New forms of work in Portugal", ML Cristovam and others (1996)) shows that these new forms of employment are to be found in very different areas and include skilled and unskilled workers in occupations such as metalworking, textiles, plastics, company services (such as maintenance, catering, security, cleaning and transport). They are also found amongst secretarial staff, translators and telephonists, media, tourism and health service workers and consultants. These new forms of employment are particularly noticeable in large supermarkets and shopping centres, large-scale industries and in the building and hotels and catering sectors.

These numbers clearly indicate disguised employment and the use of labour on a subcontracted basis. Although these workers are considered self-employed and working under the contract for services system, they are contracted to work normal working time under the directions of an employer, generally on the premises and using the equipment of the enterprise. Only in some cases is work taken home or done exclusively at home. Payment is made on an hourly or piece rate. The research did not uncover many cases of part-time work (3.1%) or weekend work.

As noted above, there exists a certain amount of employment legislation in Portugal governing fixed-term contracts (with or without exact expiry dates) and contracts of indefinite duration, full-time and part-time contracts, temporary-employment agency work, homeworking, employment involving special relationships, apprenticeship contract s and work experience situations.

Enterprises justify the use of these forms of employment by referring to their advantages. Such forms of employment are seen as necessary for controlling labour costs, rationalising work organisation and regulating the labour market (by reducing absence, introducing greater flexibility into the application of labour legislation and collective agreements and promoting consultation within enterprises). In addition, they reduce rigidities in labour market conditions by introducing functional flexibility and greater stability into the supply and demand for labour, and help to redistribute income through a reduction in excessive overtime and cutting social security contributions.

The trade unions say that these forms of employment introduce some rationalisation of production as well as working time and pay flexibility, but that they do not always mean a reduction in costs and frequently conceal a decline in the status of the employee, the creation of a docile workforce and the introduction of certain free market ways of thinking, as well as a trend towards a deterioration in all forms of management.

Commentary

The tripartite Strategic Social Pact signed in December 1996 draws attention to the fact that the:

"quality of employment and the conditions of competitiveness between enterprises are negatively influenced in Portugal by the existence of different forms of non-compliance with labour regulations. Some of the most important of these are dissimulation or changes in the nature of the contract of employment, the existence of clandestine employers, the non-declaration by legalised employers of the recruitment of workers, the payment of undeclared pay supplements, the customary extension of daily and weekly working hours and the use of undeclared labour ... In view of this, the Government and the social partners signing this agreement agree upon the need to promote a series of planned and integrated actions to normalise, prevent and inspect illegal employment, such as legislative measures relating to independent contract work, subcontract work and contracts for services, and legislative measures designed to prevent recourse to false self-employment." (Strategic Social Pact, Chapter V, Section 3, The fight against illegal employment).

In order to normalise current practice: irregular situations must be taken into consideration and allowed to become fixed-term contracts; a review must be undertaken of the system of penalties for infringements of the law as well as of ways to promote preventive action (such as information and drawing public attention to irregularities); and there must be an increase in the rate of inspection. This last action will involve the joint intervention of the Labour Inspectorate, social security services and the tax inspectorate.

Trade union campaigns and active state policies have been introduced with the aim of protecting those workers who find themselves working under these new forms of employment. It is, however, a very complex and diversified situation, which, as can be seen, has led to increasing vulnerability at work, especially with respect to legal rights and social security. Self-employment may be a way of concealing a certain level of disguised unemployment.

The trade unions, which prefer a global approach to these problems, as contracts with indefinite duration do not lead to chronic insecurity at work, say that they aim to keep defending their line of "a job and a non-fixed-term contract for everyone".

This position is not, however, acceptable from the point of view of enterprises. From their point of view, it is important to understand the difference between: a real adjustment on the part of the enterprise to the new needs of production systems and new forms of employment, based on the flexibility of both the workplace and working time; and the existence of more or less concealed situations in which the sole aim is to try and fragment the employment relationship and break up what is seen as the typical employment relationship. (Maria Luisa Cristovam)

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