Greatest change to labour laws since the 70s

by CHRIS GRAEME [email protected]

One of Portugal’s two largest unions, the CGTP, agreed to fight what has been called the biggest retrograde in labour legislation since the 1970s.

An agreement reached between the Government and social partners including the UGT union means less protection at work, less generous unemployment conditions and benefits, fewer public holidays and end to stretching out bank holidays using ‘pontes’ or bridges.

In the blueprint for the radical shakeup in the country’s labour legislation laws, companies come off better in a move which the Government says aims to make Portugal more competitive and productive.

The Government did give way on one sticking point: an additional half-an-hour to the working day which the unions refused to budge on.

Even so, the unions could hardly hide their displeasure at signing the three-party agreement which in its broadest outlines is the same blueprint which the PS government of José Sócrates had agreed with the ‘troika’ in the spring.

One positive point did come out of the agreement for all sides involved: the fixing of a maximum ceiling of 1.5% on energy price increases for the period 2012-2015.

The measure will be attained or offset by beefing up energy efficiency by 25% over the next eight years, a review of Energy Purchasing Contract costs and other energy price guarantees, a reduction in power station generating costs, and the application of receipts from the sale of carbon emission licenses.

The Prime Minister, Pedro Passos Coelho, stressed the importance of the agreement, both internally in Portugal and abroad in terms of Portugal’s image, playing down the CGTP union’s vehement refusal to remain at the table to the end of the meeting because it considered the document a “complete sham”.

The unions, their representatives and the various ministers in each sector involved met in the morning on Monday before engaging in a detailed and heated discussion over the 45-page document which had been sent to them by the Ministry of the Economy on Friday.

The document had already been debated over the weekend by most of the parties involved except the CGTP.

The unions have made it clear that they will use all means at their disposal in fighting what they believe to be a direct attack on workers’ rights.

New labour legislation:

Employment Security – Under the terms of the document it will be easier for bosses to sack employees either because they have reduced their productivity or failed to achieve the objectives laid out in the contract.

Compensation Payouts – The newly contracted have the right to 20 days pay for each year of service. A maximum ceiling of 12 salaries, or €116,400, has been established. For those in existing contracts, they will receive 30 days pay for each year of service until the new law comes into force.

The Shortest Term Contracts are now fixed at 15 days.

Holiday Entitlement goes from 25 working days a year to 22 working days.

Bridges or ‘Pontes’ – while the ‘troika’ agreement is in force, companies can close on Monday and Friday when a bank holiday falls on a Tuesday and Thursday. From then on, workers will have to negotiate with their bosses at the start of each year which bank holidays can be taken with bridges. Those who don’t turn up on a ‘bridge day’ risk losing two days of their pay. An employee who works on a ‘bridge day’ will see this day discounted from his/her holiday allowance.

Bank holidays – employees lose four: two civil and two religious holidays.

Layoffs – made easier for those companies who are up-to-date with their tax and social security payments. An employee cannot be fired during a layoff period or in the subsequent 30 to 60 days.

Overtime – overtime up to 250 hours per year per collective contract is allowed with the agreement of both the boss and employee, up to a limit of two hours per day and 50 hours per week. Overtime will cost companies less: 25% for the first hour and 37.5% for each subsequent hour, 50% on a bank holiday.

Unemployment benefit – can continue receiving half of their unemployment benefit if they succeed in getting a job where they earn less than that benefit. This only goes for 12 months.

Compensation days off in lieu for working on public holidays – this has been scrapped.