Collective bargaining in Portugal in the aftermath of the crisis: trends and prospects

• Date: 01 November 2019
• Author: Isabel Távora
• Published date: 01 November 2019
• DOI: http://doi.org/10.1111/irj.12273

Collective bargaining in Portugal in the

aftermath of the crisis: trends and prospects

Isabel Távora

ABSTRACT

This article examines the decline of collective bargaining in Portugal during the recent

economic crisis and why, following significant improvements in the economic and po-

litical contexts, the number of collective agreements published each year remains

lower than before. Drawing on theoretical work on institutional change by Streeck

and Thelen (2005) and Baccaro and Howell (2017), it argues that industrial relations

institutions in Portugal have been subject to an incremental but transformative pro-

cess of liberalisation. The analysis of national data and in-depth interviews with key

informants reveals that serial legal amendments since the 1990’s weakened unions,

converted bargaining into a mechanism to introduce flexibility and wage austerity

and reduced incentives for the parties to conclude agreements. While these changes

were gradual, their consequences became clear during the crisis. By improving under-

standing of recent developments in Portuguese collective bargaining, the article en-

riches knowledge of processes of liberalisation of industrial relations in Europe.

1 INTRODUCTION

The sovereign debt crisis was a period of intense labour market reform in Portugal,

especially after the involvement of the troika in 2011. The amendments to labour

law in this period were associated with a significant disruption of collective bargaining

and a concurrent decline in the coverage of published agreements (Campos Lima,

2013; Cruces et al., 2015; Currie and Teague, 2017; Rocha and Stoleroff, 2014;

Távora and González, 2016; Visser, 2016). With the end of the adjustment pro-

gramme, an improvement of the economic outlook, the emergence of a political cli-

mate more supportive of bargaining and the reversal of some of the most disruptive

measures, there was an expectation that collective bargaining would resume its nor-

mal operation. However, while a recovery is taking place, the pace has been slow,

and the levels of coverage of new agreements are still far from pre-crisis levels. This

article takes a closer inspection of the circumstances that led to the decline of collec-

tive bargaining in order to provide an understanding of why bargaining figures

remain relatively low.

To that end, the article relies on two main sources of data. The first one consists of

Portuguese national sources of collective bargaining indicators. Data on Portuguese

collective bargaining have improved considerably since the crisis, particularly with

❒Isabel Távora, Alliance Manchester Business School, University of Manchester. Correspondence to:

Isabel Tavora, Senior Lecturer in Human Resource Management, University of Manchester, Alliance

Manchester Business School. E-mail: isabel.tavora@manchester.ac.uk

Industrial Relations Journal

ISSN 0019-8692

© 2019 Brian Towers (BRITOW) and John Wiley & Sons Ltd

50:5

–6, 548

–563

the creation of the Centro de Relações Laborais.

1

The reports published by this tripar-

tite body, by the Ministry of Labour’s DGERT

2

and by UGT

3

configure a valuable

and detailed source of data on Portuguese collective bargaining. This is examined

alongside studies covering the case of Portugal in international and cross-national re-

search. The second source of data consists of 12 in-depth interviews conducted in

May and June 2018 with key informants from Ministry of Labour’s DGERT (two),

trade union organisations (six) and employer associations (four). The interviews were

conducted by the author, in person, except for three telephone interviews. The

interviews with union organisations comprised the two national union confederations

(UGT and CGTP), four sectoral union federations (two UGT and two

CGTP-affiliated, two in services and two in manufacturing). The employer associa-

tions covered both manufacturing and services and comprised one of the five national

employer associations and three sector-level organisations. The interviews with union

and employer organisations involved key informants that were or (in one case) had

been in leadership positions and directly involved in sectoral bargaining or national

social dialogue. The interviewees from DGERT were two employees who were in-

volved in mediation and conciliation processes. Further details of the interviewees

are withheld to protect their anonymity.

The analysis draws on theoretical work on institutional change by Thelen (2003)

and Streeck and Thelen (2005) as well as on Baccaro and Howell’s (2017) thesis of

neoliberal

4

convergence to argue that, along with other political economies of

Western Europe, industrial relations institutions in Portugal have been subject to a

transformative liberalisation process, the latter conceptualised as an expansion of em-

ployer discretion in wage setting, hiring and firing and work organisation. Baccaro

and Howell (2017) argue that since the 1970s, employer discretion has expanded,

and the balance of class power has shifted against labour everywhere in Europe.

Intensified competition, market liberalism and a reinvigorated project of European

integration that has institutionalised a deflationary and deregulatory logic created a

labour-unfriendly environment and put real pressure on industrial relations institu-

tions (Baccaro and Howell, 2017; Streeck and Thelen, 2005). The full implications

of this path of European integration became clear during the economic crisis and have

been particularly noticeable in the labour market reform carried out in southern

European countries (Baccaro and Howell, 2017; Marginson, 2014). However, as this

article will show, the transformation of Portuguese collective bargaining was not an

abrupt process nor did it take place merely as a response to the pressures of the crisis.

As Streeck and Thelen (2005) have taught us, institutional change towards

liberalisation most often proceeds slowly and tends to take place through gradual in-

cremental changes, which, over a period of time, can lead to major institutional trans-

formation. This may not be recognisable in the structure of institutions because the

stability in institutional form can hide significant change in their uses, functions and

1

The Centro de Relações Laborais, created in 2012, provides data on and to support collective bargaining

(Decreto-Lei 189/2012). It has produced regular reports since 2015.

2

Direção-Geral do Emprego e das Relações de Trabalho

3

União Geral de Trabalhadores, one of the two national union confederations.

4

In this perspective, neoliberalism is understood as the use of state power to create a market order in soci-

ety, in which individuals coordinate their interactions through the principles of competition and the associ-

ated price system; it is linked to a strategy of economic reform involving trade and financial liberalisation,

fiscal discipline and disinflation and, in the sphere of employment relations, labour market reform that ex-

pands employer discretion (Baccaro and Howell, 2017).

Collective bargaining in Portugal: Trends and prospects 549

© 2019 Brian Towers (BRITOW) and John Wiley & Sons Ltd