Minister of Labour mystified by union opposition to individual time banks

Portugal’s Minister of Labour reiterated her defence on Tuesday of three measures in Portugal’s labour law reform that have generated the most controversy from unions: outsourcing, individual time banks, and the restriction on reinstatement after dismissals deemed unlawful.

Speaking at the International Club of Portugal, Maria do Rosário Palma Ramalho stressed that the country now has a “golden opportunity” to create the conditions for companies to be more productive and, as a result, for wages to rise above the bottom of the European rankings.

“Why demonise individual time banks? It is mutually beneficial for both parties, making companies more productive and allowing them to save on contextual costs, and enabling a better work-life balance,” the minister stressed at the ICPT luncheon-debate at the Sheraton Lisboa & Spa hotel.

“We don’t understand the demonisation of the individual time bank, which, incidentally, is requested by many workers,” reinforced Palma Ramalho.

The individual time bank is a system that was abolished in 2019 (effective from 2020), but employers have long been clamouring for its return, a request that was accepted by the Government in the preliminary draft in July.

This is, however, one of the measures that the UGT (General Union of Workers) has most criticised in the negotiation of the revision of the Labour Code.

Before an audience of business leaders, the minister also defended outsourcing, arguing that the outsourcing of labour is a “consequence of the specialisation” of companies.

“Take the case of Palmela. Without the use of outsourcing and cooperation between companies, the Autoeuropa cluster in Portugal, which sustains thousands of direct and indirect jobs and is one of the main pillars of the country’s exports, would not exist,” she stated.

Currently, companies that carry out collective dismissals or dismissals due to job elimination are prohibited from using outsourcing for 12 months.

In the draft bill presented in July of last year, the Government proposed the repeal of this restriction, which was contested by the unions.

The proposal has evolved, and in the most recent version, it is foreseen that this restriction will be reduced to six months and will only apply to the core activities of companies.

On the other hand, in her 20-minute speech at this luncheon-debate, the Minister of Labour also took the opportunity to comment on the possibility of companies asking the courts to prevent the reinstatement of a worker after a dismissal considered unlawful.

Maria do Rosário Palma Ramalho highlighted that only in Italy does reinstatement follow a model similar to the Portuguese one, that is, it is mandatory.

“The country has a golden opportunity today, which it should not waste, to create the conditions for companies to be more productive, the economy to be more competitive, and for workers to no longer have the low wages that are at the heart of Europe,” emphasised the minister, who noted that the government of Luís Montenegro, in addition to labour reform, is also working on tax reform and state reform.

“Labour reform alone is not enough to increase company productivity and economic competitiveness, but without it, neither can be achieved,” she stated.

Regarding Artificial Intelligence and Industry 4.0 – the main themes of her presentation at the event – ​​Palma Ramalho identified four key areas: employability, with the disappearance of many jobs; the “unavoidable” transition to more “agile and diversified” work models; the “ethical imperative of effective human supervision of digital tools”; and the strengthening of digital literacy, “because it impacts all work relationships across the board.”

Source: Essential Business; Image: ICPT, Fernando Bento.