Portugal job reform deal signed, but top union balks

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Portugal job reform deal signed, but top union balks

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Portuguese employers and some unions have agreed major changes to the labour market.

A controversial proposal to increase the length of the working day by half an hour to eight and a half hours was dropped.

In return, unions agreed easier firing and hiring as well as fewer holidays and lower compensation for workers being laid off.

Economy Minister Álvaro Santos Pereira said: “Portugal is showing the world and the financial markets, that, once again, we are managing to overcome our differences and that we can be united in difficult times.”

Those difficult times include a likely deficit next year of 5.4 percent of GDP, the economy predicted to shrink by 1.8 percent and unemployment at 13.4 percent of the workforce, according to IMF and Portuguese government forecasts.

The labour reforms are intended to help boost Portugal’s competitiveness so it can meet the terms of an European Union/International Monetary Fund bailout.

However the country’s biggest union — the CGTP — did not sign the deal and criticised the changes as a backward step which suggests anti-austerity protests will continue and grow.

Joao Proenca, head of the second-largest union UGT, which did sign, also said the terms were bad for workers, but added that “it was important for the country to have a deal as it faces the most serious crisis”.