Government’s budget proposals will stifle economic activity

Some of the proposed additional last-minute changes to Portugal’s labour law outlined in the State Budget for 2022 will be a serious stumbling block to economic development in Portugal.

This is the opinion of António Saraiva, the President of the Portuguese Industrial Confederation (CIP) who does not believe that proposals announced after the last meeting of the Council of Ministers after pressure from left-wing parties in the coalition will either develop the economy or encourage job creation. He says the Government is caving in to demands from the left to simply get the budget voted through.
António Saraiva says in an opinion piece published by Dinheiro Vivo today that the new proposals do nothing to “help the context of uncertainty in which we live today”.
“It puts the principle of freedom to collective negotiation at risk, creates more costs and unjustified expenses for companies and calls into question a minimum of that vital internal flexibility which is so important for a rational management of working hours”.
Saraiva adds that the employment confederations had been supportive of a balanced and sensible discussion on many of the goals which were generically laid out in the ‘Agenda for Decent Work and Appreciation of Young People in the Workplace’.
António Saraiva adds that these include combating non-declared work, appreciation of young people in the work place, fostering a healthy work-personal life balance and boosting collective contracting.
“But he says the latest additions have not taken into account any of the proposals that were suggested by business organisations, were lumped together at the last minute with concessions that had already been publicly announced to align with the demands of other partners (meaning the left-wing parties in parliament) which are not social partners (meaning unions and employees associations).
“This discussion has recently been contaminated by the Budget question, now having to meet the calendar of the Portuguese parliament and party-political agendas which are focused on secondary questions which contribute nothing to what we should be focusing on right now: “passing reforms to get the country growing”.
“It is unacceptable to validate an Agenda which is clearly hostile to private initiative,” said António Saraiva, president of CIP – the Portuguese Industrial Confederation.
The left-wing Bloco de Esquerda wants bring back the 30 says compensation paid to staff for dismissal that had been in force in the Portuguese Labour Law until 2012.
The government states “there was a increase in compensation to 24 days per year in the case of termination of fixed or temporary contract – a principle that is already in the proposed labour law as part of the Agenda for Decent Work’.
In relation to another of the proposals from the Bloco in the labour area, the Government says that it has advanced towards putting back the amounts paid for overtime that had been in force up until 2012, although now only from 120 hours a year extra: “First hour on working days will have an addition of 50%; from the second hour, 75%; on weekends and holidays (100%). Up until 120 hours the current regime stays the same.