Observation (CEACR) - adoptée 1998, publiée 87ème session CIT (1999)

With reference to its previous comments, the Committee notes the information supplied by the Government in its report and the comments of the General Confederation of Portuguese Workers (CGTP-IN), appended to the Government's report. It notes the new information provided by the Government on 16 November 1998. The Committee wishes to draw the Government's attention to the following points.

1. Part IV (Unemployment benefit), Article 23 of the Convention. In its previous comments, the Committee requested the Government to provide explanations as to the reasons for fixing a relatively long qualifying period of a minimum length of 540 working days of salaried employment over the last 24 months (section 12 of Legislative Decree No. 79-A/89 establishing the unemployment insurance scheme of the general social security scheme) for entitlement to unemployment benefit, taking into account the fact that Article 23 provides that the qualifying period shall not exceed the length considered necessary to preclude abuse. In this context, it also requested the Government to specify the reduction in the duration of the qualifying period decided upon in accordance with Decision No. 6/97 of the Council of Ministers for workers who are in involuntary unemployment in the textile and clothing industry, and to indicate whether similar measures have been taken or are envisaged in respect of the workers protected in other economic sectors.

With regard to the reasons for the determination in the national legislation of a qualifying period of 540 days of salaried employment, the Government states in its report that these were related to several factors, including the need to establish a minimum period of employment and to adapt the unemployment protection scheme to the context of a labour market which is characterized by a certain rigidity, with contracts without limit of time being predominant and fixed-term contracts (a situation in which the completion of this qualifying period would raise even more serious problems) being of an exceptional nature. According to the Government, since the situation with regard to contracts of employment in Portugal is fundamentally stable, the qualifying period in question is not very difficult to complete. Furthermore, the basic criterion for entitlement to benefits is related to age. Finally, the Government considers that the relatively long duration of the periods of protection, which are intended in particular to protect older workers, have to be counterbalanced in terms of the payment of contributions. With regard to the measures adopted in the textile and clothing industry under the terms of Decision No. 6/97 of the Council of Ministers of 15 January 1997, the Government confirms that, in the context of the new development programme for the sector, the qualifying period for entitlement to unemployment benefit has been reduced from 540 days of salaried employment over the past 24 months to 270 days of salaried employment over the last 12 months preceding the date of unemployment. It adds that reductions in qualifying periods as a measure of social protection are not recent and have already been applied by virtue of Legislative Decree No. 291/91 of 10 August 1991 establishing additional protective measures for sectors undergoing restructuring and in certain geographical regions affected by the economic and social restructuring of one or more local enterprises with a significant volume of employment. In addition to the textile and clothing sectors, these measures have been applied in the cases of the enterprises LISNAVE, SETENAVE and SOLISNOR (shipyards), as well as in the context of the restructuring of the glass sector in 1994. However, the Government emphasizes that these are temporary and exceptional measures. Finally, the Government also emphasizes the existence of a social allowance for unemployment for which the required qualifying period is substantially lower, since the unemployed person must have completed 180 days of work during the 12-month period immediately preceding the date of unemployment. This benefit, which is intended in particular for precarious and unstable employment relationships, is combined with a condition relating to earnings to justify the existence of a more favourable system.

In its comments, the CGTP-IN considers that, from the point of view of the provisions of Article 23 of the Convention, the qualifying period of 540 days is excessive since it has the effect of excluding from the protection a considerable number of workers who, due to the current precariousness and instability which characterize the labour market, do not succeed in completing this period. According to the CGTP-IN, this situation is in violation of the principle of the universality of protection set out in the Convention. With regard to the social allowance for unemployment which is designed to replace or supplement unemployment benefit, the CGTP-IN emphasizes that the number of persons covered is smaller because it is subject to an earnings condition.

The Committee notes this information. With regard to the reasons underlying the determination in the national legislation of a qualifying period for unemployment benefit, as set out in section 12 of Legislative Decree No. 79-A/89, and particularly those related to the predominance on the labour market of employment relationships without limit of time, age and the level of contributions paid in exchange for a relatively extended period of protection, the Committee recalls that Article 23 only authorizes such qualifying period as may be considered necessary to preclude abuse. It also notes that, while the completion of a qualifying period may be relatively easy under the conditions of a fundamentally stable system of employment relations, as described by the Government, the same does not apply in the current labour market which, according to the CGTP-IN, is characterized by increasing precariousness and instability in employment. Even workers with contracts without limit of time are increasingly affected by economic restructuring, with the effect that measures to reduce the qualifying period may prove to be necessary in certain sectors in order to protect those who are made unemployed without having completed the full qualifying period set out in the legislation. With regard to workers with fixed-term employment contracts, whose numbers appear to be very substantial according to the information supplied by the CGTP-IN in the context of the application of the Termination of Employment Convention, 1982 (No. 158), the completion of the current qualifying period of 540 days of salaried employment during the last two years has become particularly difficult. In this respect, the Committee notes, for example, that in accordance with the regulations governing fixed-term contracts introduced recently in the conditions of service of the National Health Service by Legislative Decree No. 53/98 of 11 March 1998, a copy of which was provided by the Government, public health establishments are authorized to recruit one-third of their staff under fixed-term contracts, which may not exceed a total duration of two years. Finally, the Committee wishes to emphasize that the social allowance for unemployment, for which the qualifying period would appear to comply with the provisions of Article 23, cannot be considered a method of protection which gives effect to Part IV of the Convention, since the social allowance does not comply with the criteria set out in Article 21(b) as regards its scope (all residents whose resources during the contingency do not exceed limits prescribed). The Committee however notes that the Government refers in its thirteenth annual report on the application of the European Code of Social Security to the coming into force in the near future of a legislative decree totally revising the legal framework of unemployment insurance. It hopes that on this occasion the Government will reconsider the question of the qualifying period for entitlement to unemployment benefit established by section 12 of Legislative Decree No. 79-A/89 which, as the Government recognizes, is relatively long, in the light of the provisions of Article 23, taking into account the above comments. In any event, the Committee would be grateful if the Government would continue supplying information on any new measure adopted to reduce the qualifying period for unemployment benefit in specific economic sectors.

2. Part VI (Employment injury benefit). (a) Article 36, paragraph 1 (in relation to Article 65, paragraph 10). The Committee notes the information provided by the Government in reply to its previous comments concerning the legislative provisions determining the methods for the adjustment of benefits for employment injury and occupational diseases and the statistics on the adjustment of these benefits for the period 1997-98. With reference to the provisions which are in force (Legislative Decree No. 668/75 of 24 November 1975, as amended by Legislative Decree No. 39/81 of 7 March 1981), the Government states that pensions for invalidity of a degree that is lower than 30 per cent are not affected by the rules for the adjustment of pensions. It adds that the draft regulations under Act No. 100/97 of 13 September 1997 establishing the new legal framework for employment injury (which has not yet come into force) includes a chapter on the adjustment of pensions which recommends the adjustment of these pensions under the same terms as the pensions provided by the general social security scheme.

On this subject, the CGTP-IN alleges in its comments that the method for the adjustment of employment injury pensions is not in conformity with the provisions of Article 65, paragraph 10, of the Convention since: (1) the adjustment does not apply to all pensions; and (2) the indirect method used for adjustment, under which increases in the level of benefits are determined by a new method of calculation based on the minimum wage fixed each year, do not ensure the maintenance of the real value of the pension in relation to fluctuations in the cost of living.

The Committee recalls that current periodical payments provided in the event of employment injury and occupational diseases, covered by Article 36, paragraph 1, of the Convention (with the exception of those covering temporary incapacity for work), shall be reviewed following substantial changes in the general level of earnings -- and not the minimum wage -- where these result from substantial changes in the cost of living, in accordance with Article 65, paragraph 10, irrespective of the degree of invalidity. It hopes that when it adopts the draft regulations under Act No. 100/97, to which it refers in its report, the Government will ensure that full effect is given to the Convention on these two points. The Committee requests the Government to provide a copy of the text when it is adopted.

(b) Article 38 (in relation to Article 69(f)). In its previous comments, the Committee raised the question of the conformity of Part VI, section 1(a) and (b), of Act No. 2127 of 1965 establishing the legal framework for employment injury and occupational diseases and section 12 of Order No. 642/83 approving the regulations of the National Insurance Fund for Occupational Diseases with the above provisions of the Convention. Under Part VI, section 1(a) and (b), of Act No. 2127 of 1965, accidents caused by fraud or resulting from an action or omission by the victim while that person was violating, without good reason, the safety rules, as well as accidents resulting from the serious and inexcusable fault of the victim, are not subject to compensation. Furthermore, section 12 of Order No. 642/83 also provides that serious and inexcusable fault excludes entitlement to compensation for occupational diseases. In view of the fact that Article 69(f) authorizes the suspension of benefit only in the case of the wilful misconduct of the person concerned, the Committee requested the Government to indicate the manner in which these provisions are applied in practice. In its report, the Government provides a résumé of judicial decisions on cases which occurred between 1995 and 1997 and emphasizes that these cases are relatively rare.

The Committee has examined the extracts of judicial decisions provided by the Government. It notes in particular that, in accordance with the case-law of the Supreme Court of Justice, serious and inexcusable fault presupposes the existence of inexcusable foolhardy behaviour, and not merely imprudence or lack of attention, lacking in an elementary attitude of prudence and constituting the unique cause of the accident. In this respect, the Committee considers that such a definition of serious and inexcusable fault would not appear to assimilate it in all cases to wilful misconduct within the meaning of Article 69(f) of the Convention, since the above concept of serious and inexcusable fault would not necessarily appear to take into account the intention of the author of the act. Furthermore, the application of this case-law in the various cases supplied by the Government shows that, in certain cases, serious but not intentional fault has resulted in the disqualification of the accident for the purposes of compensation.

The Committee therefore hopes that the Government will be able to re-examine the matter in the light of the above comments when preparing the regulations to be issued under Act No. 100/97 of 1997 establishing the new legal framework for employment injury and occupational diseases so as to limit the suspension of the benefits due in the event of employment injury to cases of wilful misconduct, in accordance with this provision of the Convention.

3. Part VII (Family benefit), Article 43. In its previous comments, the Committee noted that section 15 of Legislative Decree No. 133-B/97 establishing the legal framework for family benefit under the general social security scheme makes entitlement to family benefit, with the exception of beneficiaries of pensions, conditional on the completion of a qualifying period of six months' wages, received either on a continuous or interrupted basis, in the 12 months preceding the second month prior to the application. In view of the fact that, under the terms of Article 43, the qualifying period must not exceed three months of contribution or employment, or one year of residence during the prescribed period, the Committee requested the Government to indicate the measures which have been taken or are envisaged to give full effect to this provision of the Convention. In its reply, the Government recognizes that the qualifying period set out in section 15 of the above Legislative Decree is not in accordance with the Convention and states that the legal framework of family benefit, which is under review, will be improved, including the issue of the qualifying period. For its part, the CGTP-IN states that this qualifying period is in manifest violation of the provisions of Article 43 and constitutes a retrogression in relation to the previous scheme, which did not set any qualifying period. The Committee therefore hopes that the appropriate measures will be taken in the near future to bring the national law and practice into full conformity with the Convention on this important point.

[The Government is asked to report in detail in 1999.]