Delay in renewal of collective agreements

Despite the bilateral agreement signed in 2005 by all confederations in relation to delays in renewing collective agreements, the number of workers covered by renewed agreements remains at a level far below the average of previous years. At present, the majority of delayed negotiations are in the manufacturing sector. In the context of the Labour Code, agreements that have not been renewed for one year are at risk of losing validity. This may result in a period of conflict in certain sectors.

The 2003 Labour Code (PT0305101N) abolished the rule – known as the sobrevigência – that guaranteed the validity of collective agreements until they were substituted by a new agreement signed by the same partners. At present, collective agreements are due to expire if they are denounced by one of the parties and if they are not renewed. If a collective agreement loses its validity, employees who have been covered by it maintain the respective rights and benefits as part of their individual work contracts. However, workers who are hired after the expiration of the collective agreement come under the protection of the Labour Code, which generally guarantees lower standards than the collective agreements.

Risk of decline in coverage

After the collapse of a number of collective agreements in 2004, on 7 January 2005, the confederations represented at the tripartite Standing Committee for Social Concertation (Comissão Permanente de Concertação Social, CPCS) signed a bilateral agreement to deal with the situation. This gave way to a partial revival in negotiations during 2005: the number of signed agreements increased from 162 agreements in 2004 to 253 agreements in 2005, and the number of employees covered grew from 600,000 to one million employees. Despite this positive trend, one third of the workers who are currently covered by agreements (i.e. 500,000 workers) remain at risk of not being covered by any conventional regulation.

Collective bargaining coverage in Portugal has traditionally been at a high level, representing about 90% of workers in the private sector. However, if the current situation does not improve, this rate may fall considerably. It is difficult to give an exact estimate, because some of the agreements (such as in the chemicals industry) maintain a clause guaranteeing the sobrevigência, which keep their validity in principle even if they are not renewed.

Views of the social partners

On 7 March 2006, the General Confederation of Portuguese Workers (Confederação Geral dos Trabalhadores Portugueses, CGTP) organised a demonstration in front of the headquarters of the Confederation of Portuguese Industry (Confederação da Indústria Portuguesa, CIP), protesting against what it considers an employers’ boycott of collective bargaining in some sectors. CGTP called for a change in employers’ attitude and an intervention from the Ministry of Labour.

Employers do not share the unions’ view on the situation. CIP considers that the Labour Code opened the way for a profound revision of the conventional framework, particularly in relation to the organisation of working time, functional flexibility and fixed-term contracts.

Delays in sectoral agreements

Negotiations have been delayed mainly in the manufacturing sector. Union confederations report that negotiations are being obstructed in a broad set of manufacturing branches (chemicals, paper production and printing, textiles and clothing, shoe manufacturing, metal and steel, car manufacturing, electric and electronic equipment, ceramics), and also in some services sectors, such as road transport and private healthcare.

The obstruction process generally begins with employers formally denouncing an agreement. So far, no agreement has effectively expired, due to conciliation and mediation procedures. However, given the current divergences between the parties, these mechanisms of resolution can hardly succeed. As unions do not accept the expiry of the agreements, a period of considerable conflict may be imminent.

The crisis has already produced some discernable results. According to an analysis of the first quarter of 2006 by the General Workers’ Union (União Geral dos Trabalhadores, UGT), there is a clear trend for an increased proportion of company agreements in the collective bargaining system, although serious problems are reported in the renegotiation of sectoral agreements.

Commentary

Collective bargaining at sectoral level in Portugal has been extensive, both in terms of the range of issues and in terms of coverage; however, as a process of renegotiation and re-regulation, it has been largely static for decades. For the time being, it is not possible to predict the final outcome of the current stand-off between employers and unions. Nonetheless, it seems certain that this marks the beginning of important changes being made in collective bargaining and, thus, of changes in the overall Portuguese industrial relations system.

Maria da Paz Campos Lima and Reinhard Naumann, DINÂMIA

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