Business associations vow to continue to press for labour market reform

“Great disappointment” and a “missed opportunity for the country.” were among the reactions from business associations and employers’ confederations to the decision by some political parties to vote down the government’s labour package in Portugal’s parliament on Friday.

After the most sweeping package of labour reforms seen in the country in a generation was rejected, the Portuguese Business Confederation (CIP) vowed that it would push again for controversial reforms which would make Portugal’s existing labour laws more flexible, paving the way for companies and workforces to be more agile, productive and competitive, before the summer parliamentary recess, at the next meeting with unions. However, one of Portugal’s largest unions, the UGT, has already rejected the idea.

This weekend, CIP leader Armindo Monteiro (pictured)  told Antena 1 radio that he will propose a timetable and plan to reach an agreement at the next meeting with the unions which should take place before the summer holidays.

Armindo Monteiro said that the Portuguese economy needed a change in labour law, arguing that it cannot remain hostage to partisan political interests.

According to the public radio station, the UGT (General Union of Workers) has already announced that the discussion on the labour code is closed.

On Friday, the labour package was rejected in Portugal’s parliament, the Assembly of the Republic, after the far-right populist party Chega voting alongside the parliamentary left to block the reform supported by the Government.

The labour reform package had been under negotiation for nine months with unions, and in a statement the CIP promised to continue working to increase companies competitiveness and raise wages in Portugal.

The confederation says it wants to level up salaries in Portugal with the European Union average.

CIP president, Armindo Monteiro, insisted that employers do not want to take away workers’ rights, but the goal was to “create jobs and wealth for the country”.

CIP pointed out that the current labour law “is outdated and needs to change because of teleworking and the digital world.

The argument gained more traction after Portugal dropped three places in a world competitiveness ranking”.

“Great disappointment”

In statements to business daily Jornal Económico, the president of another business association, the Portuguese Farmers Association (CAP), Álvaro Mendonça e Moura, stressed that it was “very committed to contributing to increasing the country’s competitiveness and productivity,” an objective which, he argued, involves modernising labour laws.

“By not reforming labour legislation, we are, in a way, delaying the country’s development,” he stated, adding that the failure of the proposal does not eliminate existing structural problems. “The rejection of this reform does not make the problems disappear,” he emphasised.

Among the main concerns of the agricultural and forestry sector is the shortage of labour, which, according to Mr. Mendonça e Moura could have been partially mitigated with the proposed changes.

Álvaro Mendonça highlighted measures such as adjusting the limit on overtime hours, greater flexibility in training adapted to micro and small businesses, and strengthening the voluntary individual time bank.

“Those who don’t want to reform these matters are contributing to the problem not being solved,” he stated, making up for the lack of workers continues to be one of the main obstacles to agricultural activity.

The president of CAP also insisted that the absence of a political agreement does not resolve the fundamental issue.

“The problem persists, and the country will have to solve it sooner or later if we want to increase competitiveness and productivity,” he warned.

in a sector debate in the Portuguese parliament broadcast by the parliament’s TV channel ARTV before the vote on the labour reform package, the Minister of Agriculture and the Sea, José Manuel Fernandes said it was useful for the sector given the labour shortage and climate change, in addition to promoting better wages.

The Minister of Agriculture argued that “the objective of the labour reform is to achieve better wages, but also to allow for short-term contracts, which he noted were “essential,” particularly for the agricultural sector.”

“Need for urgent reforms in the country”

The Portuguese Tourism Confederation (CTP) also regretted the rejection of the labour law revision, calling parliament’s decision “another lost opportunity for the country.”

In a statement, the entity led by Francisco Calheiros recalled the many meetings with unions but that they could never reach an agreement due to “the intransigence of the UGT union.”

“After many meetings with the unions, which unfortunately did not lead to the signing of an agreement because of the intransigence of the UGT, we now expected that the Labour Law Reform could be passed in Parliament, but that didn’t happen. With this rejection, the government’s bill does not move forward, and so another opportunity to carry out this important reform is lost,” says Francisco Calheiros.

In the same document, the CTP again warned of the need for urgent reforms in the country to guarantee more productivity, more growth, and increased wages.

“A new labour law remains essential to achieve these goals, therefore, with the rejection of the government’s proposal in parliament today, another opportunity is lost,” it reads.

“Lost opportunity for the country”

The CCP – Confederation of Commerce and Services of Portugal – also regretted that it was unable to reach an agreement in parliament to approve the labor reform proposal, considering that an opportunity to improve the country’s productivity was lost.

In a statement, the confederation expressed its dissatisfaction with the result of the vote in the parliament.

The CCP called it a “profoundly negative” move that missed an opportunity to “update the labour law”.

“The rejection of the bill presented by the government is a missed opportunity for the country,” stated the president of the CCP (Confederation of Portuguese Commerce and Services), Gustavo Paulo Duarte, pointing to news “about productivity in Portugal being the fourth lowest in the European Union, at a time of global instability with the well-known repercussions on the economy and with a high risk that it could get worse .”

“This is a red flag warning,” he continued for what it means in terms of the ability to reach a consensus in Parliament, especially looking at future reforms.

The statement also speaks of a frustrating “inability to reach an agreement (…) which is indicative of the difficulties the country will face in dealing with the various problems that society and businesses face and will continue to face in the future,” underscoring a lack of optimism regarding the future that Friday’s decision entailed.

Unions applaud rejection

Immediately after the labour law was rejected in Parliament, the General Union of Workers (UGT) called the vote “a victory for all workers and for Portugal,”

The UGT, which had threatened a new general strike if the law had been passed in Parliament, emphasised that the rejection represented “a victory for the trade union movement and for all those who, during the negotiations and during the General Strike of December 11, had remained united and showed politicians that rejecting this path was the only solution”.

Tiago Oliveira, general secretary of the CGTP, who became emotional in the Parliament galleries where he watched the parties vote, told journalists that the rejection of the labour reform in Parliament was “a great victory for the world of work and for workers” and that “the Government was completely defeated throughout this process.”

Underscoring that the reform “did not address the real problems of the country.” The union leader argued that “the workers were decisive” not only in “influencing the voting of some parties in the Assembly of the Republic,” but also in the two general strikes on June 3 and on December 11 last year (organised with the UGT).

Sources: Jornal Económco/Notícias/ECO