The Portuguese Government has presented a draft ordinance, published in the “Boletim do Trabalho e do Emprego (Bulletin of Labour and Employment, in English), which provides for an approximate 8% increase in the gross salary of an estimated 90,000 workers who provide services in private sector companies. Starting from the premise that these are not covered by a collective agreement. Along with the wage increase, the meal allowance also provides for a 10% increase, corresponding to 6 euros per effective working day.
Foreseen to apply retroactively to April, the ordinance sets minimum wages for a number of professions (more precisely, 60 professions covered), from housekeeping workers with a minimum wage of 760 euros to service directors with a minimum salary of 1201.97 euros. This seeks to regulate the working conditions of these workers given the lack of collective bargaining instruments.
However, the ordinances are not negotiating instruments, but are administrative in form; the final decision is made by the Portuguese Government, assisted only by a technical commission during the process, which seeks to obtain and convey the needs and interests of the workers concerned.
Companies that do not increase salaries by at least 5.1%, that do not widen the salary range between those earning more and those earning less, and that have dynamic collective bargaining, will be eligible for the corporate income tax benefit of 50% of the expenses with the salary increase.
However, if these requirements are not recorded cumulatively, this increase dictated by the Government leaves in doubt who will actually bring about the increase. Will it be the Government or the private sector?
Another fact is that this increase only applies to raise the minimum wage standard, and may have less impact, since many companies record wages higher than the values tabulated in the proposal.
Joana Vaz Silva @ DCM | Littler
