Portugal // On course to the end of labor rights: corporations and company agreements~ 6 min

By Simone Vieira

Workplace rights are the result of many struggles that have occurred since the industrial revolution. In Portuguese law, they take the form of a Labor Code. The Code was created around Law 7/2009 and it was envisioned as a way to mediate the unequal balance of power between workers and employers; since the latter are usually the strongest part of the labor relation. Labor law mandates rights for workers, but the protection of those rights is only realized through the courts and requires a legal representative – a lawyer. In other words, in the case of litigation (conflict) between both parts, law theory states that either both parts reach an agreement or they will have to solve the conflict in court; which implies costs that the worker may not be able to support if he/she is not unionized or in case he/she doesn’t meet all the requirements needed to benefit from Social Security support.

Meanwhile, one diffuse figure has emerged in the labor market: company agreements. It’s argued that these agreements are collective labor agreements, even if the law is not totally clear on that point. Collective labor agreements usually take the form of collective labor contracts and they’re applied by activity sector: the automotive sector has a collective labor agreement, as well as the banking sector, for instance. In these cases, unionization is mandatory. A company agreement is the result of a negotiation between the unions of a specific sector and one employer from that same sector, which may be represented by one company or several companies which are part of the same group; it is not applied to the whole sector but only to those parts which have negotiated it. In these cases, unionization may not be mandatory. A division is created: one activity sector ceases to be covered by a single general labor convention and becomes divided between one or several company agreements.

If one company or a group of companies from the same sector decides not to apply for a collective labor agreement but opts instead to negotiate a company agreement, that same company agreement may be applied automatically and all the workers will be forced to accept an agreement that was negotiated between the employer and unions in which the workers were not unionized. After negotiations, and as soon as the company agreement is published in the Work and Employment Bulletin, the workers may be required to unionize but only if the union demands it or in case the workers want to have access to certain benefits.

Now imagine that a multinational like the BNP Paribas Securities Services bank, encouraged by tax incentives and low salaries, arrives in Portugal in 2007 and opts not to join the collective bargaining agreement. The bank is registered as a financial institution at the Bank of Portugal and at the Committee on Markets and Securities, but doesn’t recognize its workers as bank clerks, granting them only the category of financial transactions technician when they are hired.

Then, in 2018, showing a total lack of transparency, BNP Paribas Securities Services decides to internally push the idea that everyone it employs will have the opportunity to sign a new company agreement; which is actually not new because it is in place since 2015. But instead of a company agreement, the company presents the workers with a contract for cession of contractual position and to change the employment contract for a plurality of employers, hiding the fact that by signing this contract, the workers are automatically included in the already existing company agreement of the new entity. The figure of cession of contractual position means that they are now linked to a new entity and the figure of the plurality of employers ensures that, while switching to the new entity, the workers continue to work for the former entity, although the salary is not increased to reflect this additional responsibility. For example, an employee of BNP Paribas Securities Services who is transferred to the BNP Paribas SA must now answer to both entities and, instead of keeping the individual employment contract, he/she is automatically covered by the enterprise agreement that already exists in the new entity that has been imposed on him; even if the worker was not unionized in the trade union(s) that negotiated the agreement and therefore does not feel represented by it.

Thus, legal figures are confused and the workers are deceived so that they don’t realize that they’re actually being transferred to another entity where the business agreement is already in force, while not being given any other option: either they accept the transfer to the new agreement by signing the contract of cession of contractual position or they do not sign and thus the employer has legal cover to fire the worker without having to pay compensation or unemployment benefits. This would not happen if the business agreement was presented directly as a new contract which the employee could refuse if he/she felt it was disadvantageous, while maintaining the right to receive compensation and unemployment benefits if he/she was fired; and even then, in order to enforce these rights, the employee would probably have to go to court.

Facing this, what can workers possibly do in case they do not understand what is going on and have doubts about joining the company agreement? Since they are not unionized, the unions that negotiated the agreement themselves cannot represent or defend them. Since the workers’ committees are not part of the negotiation for these kind of agreements, they cannot represent them in the new entity or defend them either. Since the Labor Conditions Authority (ACT) only has 314 inspectors for an employed population of around 4.6 million, it has no means to help. Workers in this type of situation are thus at the mercy of what the ACT itself calls the “white zone”, an area where workers’ committees are powerless, where unions cannot enter and where the ACT cannot act. A white zone from which corporations take advantage to decide whether or not to respect the labor code and, since they are entities that employ thousands of people, as is the case of BNP Paribas, it suits them just fine that the State has no capacity to oversee them.

In a world where more and more corporations like BNP Paribas steal the margins for negotiation that workers have spent centuries fighting for, it is urgent to rethink our forms of labor organization, so that those who produce can regain the control over themselves and their rights.