The Portuguese labour movement and industrial democracy: from workplace revolution to a precarious quest for economic justice

Abstract

German

French

This article explores the relevance of various conceptions of industrial democracy to the modern Portuguese labour movement. It seeks to explain the movement's tendency to limit such conceptions to the institutional practices of collective bargaining and concertation. The article also examines the general lack of demands for participation and the movement's shared politicized approach to economic democratization as a struggle for economic justice. It first looks at how the struggles of the revolutionary period decisively narrowed the parameters of industrial democracy in the democratic political regime, excluding a radical pursuit of workers’ control. It then looks at various structural constraints on the development of industrial democracy, taking into account changes in the context of industrial relations through the periods of crisis, recovery and European integration. It assesses industrial democracy by explaining the realities of worker representation in the workplace in terms of the presence of unions and workers’ commissions and, finally, examines the consequences for industrial democracy of the present crisis and ‘adjustment’, arguing that its precarious situation has restricted the labour movement to politicized strategies for economic justice.

Keywords

Portuguese labour movement industrial democracy workers’ control economic democracy

For those who, whether through memory, reading or documentaries, still have a vivid notion of the working class mobilization that took place in Portugal in 1974–1975, the rapid reappearance of employer unilateralism and managerial hegemony, as well as the disorganization of its working class, may be hard to fathom.¹ Certainly, the massive mobilization throughout 1974–1975 of the industrial workers for fundamental democratic labour rights and their workplace-based assemblies, with the demands for purges of collaborationist managers, wage increases and, especially, workers’ control, are among the most memorable – if not the defining – characteristics of the social revolution that initially propelled the country’s democratic transition. These events are among the most spectacular examples of workplace revolt in recent European labour history alongside the events in France in 1968 and in Italy in 1969–1970. Here was a situation in which all the possible questions regarding the relationship between democracy, class and work were raised in a movement and politicized, not only in the streets but in the factories as well.

Within two decades of the revolution, Portugal’s labour relations were rated as among the least participatory in Europe, at least with regard to workplace participation and direct democracy (Sisson, 2000),² and unionization had fallen by around 50 per cent (ILO, 1997), to below one-third of the workforce (Stoleroff and Naumann, 1994). In light of this, it makes sense to ask why so little revolutionary élan was preserved in the consolidated institutions of industrial relations and real social relations in the democratic era. Should not the experiences of direct rank-and-file democracy in the struggle have given lasting impetus to employee and union participation within the industrial relations pattern that emerged?

Though reasonable, such expectations run counter to what historical analyses of the revolutionary period and its dénouement reveal. In fact, it can be argued that, rather than sustaining the participatory dynamic unleashed by the revolution of 1974, diverse political logics – including internal conflicts within the labour movement itself – converged effectively to snuff out the rank-and-file movement that could have been the agent of less bureaucratic and more participative labour relations later on. On the other hand, we should point out, in order to avoid a one-sided argument, that Portuguese employers, for their part, have not exactly been enthusiastic promoters of participatory labour relations, at least beyond the forms of employee involvement that are useful for contemporary human resource management.³ Moreover, it can also be argued that adverse economic (labour market) and political contexts have undermined the social and subjective conditions necessary for an active working class movement, thereby limiting the options of the labour movement.

Nevertheless, the question remains concerning how this progression – or rather regression – proceeded. What were the internal dynamics of revolution, democratization and institutionalization that left the industrial relations system in such a vulnerable state, paving the way for a protracted hollowing out of institutions and organizations that, in the end, crumbled with the crisis-imposed ‘adjustment process’, as we shall see? In addition, it could be asked whether there remain any traces of a more generally organized past or whether there are sustainable cases of newly organized employment relations that are pushing the limits of the industrial democracy that was established with the institutionalization process? What concerns us here in particular is the status of industrial democracy and the approach of the labour movement to workplace and economic democratization.

Since the arduous struggle against the corporatist dictatorship, the word ‘democracy’ has been ubiquitous in framing the goals and orientations of all sides in the ideologically divided labour movement that emerged in Portugal (Optenhogel and Stoleroff, 1985; Barreto and Naumann, 1998; Stoleroff, 2000). To begin with, the general struggle for political democracy necessarily went hand in hand with the workers’ struggles for basic industrial citizenship – free union representation, collective bargaining and the right to strike – and workers were very aware of just how much their struggle for decent living and working conditions depended on the advent of political democracy. However, given the general deprivation of the working population and, above all, the dictatorship’s successful suppression of anarchist influences within the labour movement, political democracy came to be associated fundamentally with the struggle for economic and social justice, the acquisition of social rights and economic security, while industrial democracy was focused on the rights to free labour representation, bargaining and industrial action within a fundamentally capitalist political economy. This association of political and industrial democracy opened up an opportunity to apply the concept of democracy to a vast range of positive citizenship and class rights, pushing the limits of democracy beyond political representation and even formal rights to union representation and collective bargaining. This, however, was not to be the case for very long, as the logic of the Cold War political struggle held sway, over the course of the democratization of the Portuguese state, and over the development of the trade union movement, splitting it and thereby contributing to produce a common political locus within industrial relations that has tended to reduce workplace industrial democracy to collective bargaining.

This article seeks therefore to explore the relevance of the diverse conceptions of industrial democracy to the modern Portuguese labour movement, from its emergence in the post-authoritarian era, passing through the democratic period and European integration, and finally reaching the recent phase of crisis. As can be gleaned from the article’s title, the career of industrial democracy within the Portuguese labour movement has involved contested and changing perspectives and programmes. The radical quest for workers’ control lost out to a paradigm of industrial democracy largely confined to distributive and redistributive issues and, in the present context of crisis and labour market ‘adjustment’, even this limited level of democracy has become precarious. This article therefore also seeks to place the career of industrial democracy within the changing economic and political contexts of Portuguese industrial relations. It starts with the revolutionary period in order to determine how its struggles conditioned the parameters of industrial democracy within the democratic political regime. It then looks at structural constraints on the development of industrial democracy, taking into account changes in the contexts of industrial relations throughout the different phases of crisis, recovery and European integration. It evaluates the realities of worker representation in the workplace in terms of the presence of unions and Workers’ Commissions. Finally, it looks at the consequences for industrial democracy of the present crisis and ‘adjustment’.

The diverse foci of industrial democracy and the Portuguese labour movement

As most articles on this topic point out, the concept of industrial democracy, coined by the Webbs to highlight the advent of collective bargaining and commonly associated with TH Marshall’s suggestive idea of ‘industrial citizenship’, has had a problematic career within industrial relations (Müller-Jentsch, 2008). It has been translated in diverse ways within the strategies of the labour movement and, as a result, tends to be a fairly imprecise reference. Industrial democracy can be taken, for example, as the range of ideas and schemes that Sturmthal (1977: 13), long ago, said ‘reaches from workers’ self-management via consultation and co-determination to collective bargaining, and in passing picks up such diverse notions as job enrichment and autonomous work groups’. Poole later defined industrial democracy in a broad sense as ‘the exercise of power by workers or their representatives over decisions within their places of employment, coupled with a modification of the locus and distribution of authority within the workplace’ (Poole, 1979; Poole et al., 2001). Poole’s definition prudently refers to power (or countervailing power), and it is noteworthy that Sturmthal’s discussion had already usefully eliminated from the topic those concepts and schemes that derive from management strategies whose aim is to increase productivity through the manipulation of worker involvement. He therefore considered the concept as pertaining to those goals that ‘aim at changes in the power structure of the enterprise concerned.’ However, these discussions notably leave aside the more radical but historically equally important – if not divergent – concept of workers’ control (Gunn, 2011). The concept of workers’ control – as opposed to industrial democracy – has radical anti-capitalist, if not revolutionary implications (because it aims at workers’ democracy within transformed relations of production) and frequently involves problematic – if not contradictory – relations with trade unionism (Mandel, 1973; Ness and Azzellini, 2011).

As we will see, any historical exploration of this topic in the Portuguese case requires that we take into account the full gamut of these distinctions, because all have been vitally important for the practical development of Portuguese industrial relations and the strategies of each fraction of Portugal’s ideologically divided labour movement over time.⁴

Equally relevant therefore to this discussion of the Portuguese case is the reference to economic democracy, an equally problematic concept that dovetails that of industrial democracy. The reference to economic democracy as a byword for objectives aimed at limiting the autonomous power of capital in economic activity and the enterprise, in particular through some sort of workers’ participation, is not very far from some usages of the term ‘industrial democracy.’⁵ As distinct from socialism or workers’ control, economic democracy here refers to the struggle for an increase in employees’ influence – largely through union representation – over decision-making regarding capitalist economic processes and development, especially through participation in control and capital (employee stock ownership), as well as for mechanisms of increased sharing by workers in the dividends of economic activity, especially through profit-sharing. On the other hand, various notions of economic democracy also refer to the diverse programmes for achieving a more economically ‘just’ and egalitarian or inclusive capitalist economy and society that can be achieved as much or even more so through political action (including both union/party alliances on the political left and tripartite neo-corporatist type arrangements) as through labour market activity, specifically collective bargaining.

As already mentioned, the generic reference to democracy – ranging from political democracy to democracy as a process based upon the input (voice) of the rank-and-file (or their representatives) and including especially the various notions of democracy that seek economic ‘justice’ – has always been crucial to the Portuguese labour movement. However, beyond their more superficial and rhetorical uses, democracy and democratization have had divergent connotations. On the whole, the dominant currents within today’s labour movement in Portugal have relegated the radical notion of workers’ control – and the struggle for it – to the past, while either neglecting or rejecting the perspectives on industrial or economic democracy that imply participation of unions and workers in managerial decision-making. Although direct company-based employee representation, in the form of Comissões de Trabalhadores (Workers’ Commissions), establishing rights to information and control of management, came into being under democracy and still exists, rarely – if ever – do unions or employees seek to intervene in regular company decision-making through them. They have also largely neglected the quest to ‘democratize capitalism’ (profit-sharing or employee shareholding, as in Poole and Jenkins (1990)), which was used by some governments as a tactic in facilitating privatization schemes. Today the Portuguese labour movement – which is still configured in ideological and political terms as it emerged from the democratization processes at the end of the 1970s – is largely focused upon such existential questions as maintaining employment, the sine qua non of any project for industrial democracy in the near future. Thus, even when unions or Workers’ Commissions engage in defensive struggles to influence restructuring strategies, they generally direct their priorities towards saving jobs without attempting to make incursions into corporate power and decision-making, except perhaps in the very specific sense of resisting privatization or plant closures. Furthermore, even before the current economic crisis, in the Portuguese experience of ‘social concertation’ – in which unions do seek to influence policy at the tripartite level – the issues of managerial prerogative or working life have been pretty much left out; the union confederations have at most demanded a ‘partnership’ role with regard to employment and training, health and safety, and social security.

It is our view that this common general stance within the predominant currents of the Portuguese labour movement derives from the level of their politicization and their focus on what Müller-Jentsch (2008), discussing the Webbs’ analysis, referred to as the external dimension of industrial democracy, notably collective bargaining, to which I would add social concertation. On the one hand, its highly politicized character tends to put the locus of industrial democracy at a political level, treating economic and social policy as its levers, and at the same time produces its common references to demands for economic justice. Its objectives are directed towards statutory regulation or ‘legal enactment’ (although in the present crisis phase, defensive judicial recourse has been as – or even more – important than political action).

Although the strategies of both union confederations in the most recent conjuncture of crisis and austerity have maintained their divergence, their programmes and practices in this period have reconfirmed these traits (Costa, 2012; Stoleroff, 2014).⁶ They remain fixed on a polar opposition between a redistributive/adversarial or oppositional approach and a distributive/integrative or partnership approach, while the political locus of labour strategy and action is associated with a neglect of the internal dimension of industrial democracy (procedural rank-and-file union democracy), as well as of the concern for the Wirtschaftsdemokratie that shapes the perspectives of the German and Nordic labour movements. The focus of union action is rather on collective bargaining or concertation. Social concertation has sought to establish parameters for collective bargaining but has also aimed at establishing social and regulatory outcomes through the mechanisms of tripartite negotiation (Lima and Naumann, 2011). But labour’s goals – although each confederation has pursued its own guidelines – have been largely restricted to wages and conditions; the external aspects of the capital/labour relations rather than the internal relations of production and questions of countervailing power. Thus, what is left of economic democracy – although in diverging models and bereft of the goals of workplace democracy – is an orientation that brings together the common aspects of the Portuguese labour movement’s strategies.

Portuguese union confederations and industrial democracy

The revolutionary process of Portugal’s redemocratization following the military coup of 25 April 1974 had such fundamental consequences for the labour movement that would emerge and its perspectives on industrial democracy that it is necessary to look at some of its history in some detail before moving on.⁷

During this period, the burgeoning labour movement was deeply engaged in the fights over the character of the democratic political project, the state and class relations. While political battles were being waged in the halls of government, streets and military barracks, workplace labour relations were the object of contention of unions and various other forms of worker association. In this context the frontiers and specific roles of the new forms of working class organization – free trade unions and various forms of workers’ assemblies and committees, as well as the cells of political parties – were ill-defined and intertwined within workplaces; their goals and functions were subject to the strategies of the political forces contending for leadership within them.

The labour movement was almost entirely encompassed, at the outset, by the Intersindical directorate of trade unions (Optenhogel and Stoleroff, 1985).⁸ The former corporatist sindicatos nacionais (national unions) were taken over and reconverted and new unions were created for groups that had formerly been prohibited from organizing. The Portuguese Communist Party (PCP), benefiting from its vast experience of clandestine work within the sindicatos nacionais, was able to mobilize the resources of a single apparatus and succeeded in establishing itself as the hegemonic force within Intersindical. It thereby assured itself of the organizational means to influence the working class struggle in accordance with its political strategy, which generally sought to limit workplace militancy under the guise of not wanting to provoke the counter-revolution (Optenhogel and Stoleroff, 1985; Varela, 2010).

However, throughout 1974 and 1975, the trade unions were equalled, if not eclipsed, by non-institutionalized rank-and-file mobilization. Together with demands for workers’ self-management or co-management, in the midst of a significant movement, in numerous workplaces, large and small, there emerged struggles for workers’ control (Santos et al., 1976; Patriarca, 1976; Hammond, 1981; Varela et al., 2014). These struggles had a revolutionary dynamic and at various points during this period, the trade unions came into conflict with the rank-and-file movement (Optenhogel and Stoleroff, 1985; Varela, 2010).⁹ This became very clear when Intersindical, which had been established by law as the exclusive union confederation,¹⁰ opposed the massive strike movement of summer 1974. In this phase of pro-communist governments, Intersindical subordinated itself to the state and its early repudiation of strikes and support for the ‘battle for production’ were symptomatic. With the nationalizations following 11 March 1975, Intersindical acted as if Portugal had already set out on the road to socialism and further sought to utilize its position to discipline the working class in line with the PCP’s perspective on the transition (Optenhogel and Stoleroff, 1985; Varela, 2010). In effect, the revolutionary impetus of the movement for workers’ control was itself controlled and channelled into struggles for industrial and economic democracy largely controlled from above (Lomax, 1983).

As a consequence of the political struggles of this very formative revolutionary period of 1974–1975, a focus upon the political-institutional and economic levels of regulation came to prevail (and has consistently prevailed) over the workplace level in the perspectives on industrial and economic democracy of the predominant currents within the Portuguese labour movement. The question is thus where the workplace level of industrial democracy – understood as something beyond the exercise of formal rights to union representation and collective bargaining – has stood in the programmes of Portuguese unions since then.

In the case of the Confederação Geral dos Trabalhadores Portugueses (CGTP-IN), the larger of the two confederations, whose leadership still has a communist majority, democracy is (and remains) above all a class concept. Having achieved fundamental political liberty with the fall of the dictatorship, the prime concern of labour – at the societal level – became economic democracy in the second sense that I referred to above. This connotes the goals of an organized economy, grounded in a public sector and (rationally) planned by the state, that provides public and social services in an egalitarian manner.¹¹ The ideological currents aligned in the CGTP together tend to believe that Portugal obtained the political-organizational basis for such a social economy through the ‘conquests’ of the 1974–1975 revolution (especially the establishment of the public enterprise sector that followed the nationalization of the commanding heights of the economy) and have made resistance to its dismemberment a priority. At the workplace level the redistributive function of unions is seen as being achieved through collective bargaining. This is compatible with its class perspective, which leads it to emphasize an adversarial relationship with capital and to reject schemes of participation or co-management that may lead to the integration of the working class within capitalist relations of production.¹² Therefore, with regard to the Workers’ Commissions, it privileges their rights to information and consultation and does not seek to extend those functions to co-determination or self-management. It is through collective bargaining that the balance of class forces is expressed and collective bargaining, as stipulated in labour legislation, is seen by it as the purview of unions. Although the CGTP unions invested in obtaining and preserving acordos de empresa (single enterprise agreements) in the large nationalized enterprises (while they existed), in general it has resisted decentralization of collective bargaining, seeking sectoral or branch-wide regulation. With privatization, it has sought to maintain the previously existing enterprise agreements as representing established rights.

The foundation of a second union confederation, the União Geral dos Trabalhadores (UGT), in 1978, as a ‘democratic’ rival to the CGTP, ushered in a logic of ideological and political competition that became endemic to the emerging pattern of industrial relations in Portugal (Optenhogel and Stoleroff, 1985). As already suggested, this pluralism shifted the locus of trade union concerns away from the workplace level, politicizing industrial relations, including collective bargaining.

Due to the circumstances of its origin in the struggle against trade union unicity and the purported communist dominance of Intersindical, the reference to democracy for the UGT, whose leadership is equally divided between socialists and social democrats, while signifying the goals of a coordinated social market economy and welfare state in which social dialogue and concertation prevail, is very strongly associated with political democracy, especially in the sense of the right to form political tendencies within the labour movement. Without relinquishing its distributive trade union functions, the UGT emphasizes the integrative, indeed ‘modernizing’ role of trade unionism, collective bargaining and the ‘social concertation’ that was instituted in Portugal in 1984. In some senses, the UGT’s focus on the higher political levels of negotiation and regulation derives from its organizational weakness at the workplace level in all but a few branches. Historically, the UGT has taken advantage of the representative function attributed to unions within Portuguese labour law (regardless of their representativeness at company, branch or national levels) in order to obtain results that it would be hard put to achieve at the rank-and-file, workplace level. And in this sense, the UGT has asserted its partnership role with capital and governments. The UGT is not only not against forms of decentralization of bargaining but defends the complementarity of bargaining at sectoral and company level, proposing the introduction into sectoral agreements of procedures for subsequent negotiation at company level. The UGT’s programmes over the years have contained references to the need to promote participation in enterprises, with regard to information, consultation and negotiation, and its discourse on participation corresponds to its partnership approach more generally, but it has not substantially developed its perspective on these matters.

The importance of trade union organization and presence at the workplace and collective bargaining are, of course, key to the views that overlap these two confederations’ perspectives, but, in both cases, the conceptions of democracy relegate direct workplace participation to a low level of priority and for this and other motives tend to minimize the role of the Workers’ Commissions, for example, except in specific situations where they are useful in defending employment against threats of closure.

In short, the two confederations share a predominantly political view of trade unionism that emphasizes indirect participation.

The Portuguese industrial relations system and industrial democracy

In the 40 or so years following the fall of the dictatorship on 25 April 1974, Portuguese industrial relations have undergone a rapid and constant evolution in response to political and economic changes. The initial, effervescent phase of democratization provided a basis for optimism regarding the possibility of expanding the domains of industrial democracy; the following phases of institutionalization and European integration demonstrated contradictory tendencies; the most recent phase of development, however, saw the near collapse of collective bargaining and the shrinking of coverage, which put the basic pillar of industrial democracy in Portugal in jeopardy.

The most significant structural factor underlying and propelling the quest for industrial democracy in Portugal in modern times has been what Marxism would refer to as the process of concentration of capital. There is a clear association between the growth and concentration of an industrial workforce and the vitality of the labour movement; the corollary is also true. Industrial restructuring and decline – and consequent disaggregation of the industrial working class – can be associated with the weakening of industrial democracy.¹³ The industrialization of the 1960s produced major concentrations of industrial workforces in large enterprises and conglomerates (Baklanoff, 1979; Lopes, 1996) that provided a critical mass of social support, and accelerated the pressure for the democratic struggle, specifically through the demands for worker representation and collective bargaining rights. The culture of the new industrial concentration provided the environment for the birth of a militant workers’ movement. Such pressure led the dictatorship to attempt a liberalization of the labour regime in the late 1960s and it was in this context that the new representative trade unionism of the Intersindical group of unions emerged (Barreto, 1990; CGTP, 2011). The spatial concentration of class formation of proto-‘Fordist’ industrialization in the Lisbon-Setubal region was, to some extent, also a relevant factor in shaping the struggles in this period.¹⁴ Subsequently, further industrial concentration took place through the revolutionary nationalizations of 1975 that expanded the state enterprise sector, a short-lived bastion of industrial enterprises – home to an industrial ‘proletariat’ – that were the context for the emergence of today’s labour movement and trade unionism (Lopes, 1996). Therefore, the break-up of this structure, that is, the general decrease in size of employment units and deconcentration throughout the late 1980s and 1990s – and the consequent dislocation of its workforce due either to early retirement or other activities – was of critical importance and correlates with the decline in unionization and mobilization (see Table 1).

Table 1.

Union density, Portugal, 1978–2010 (’000).

	Union membership	Wage and salaried employees	Union density (%)
1978	1486.8	2447	60.8
1980	1460.0	2663	54.8
1985	1225.0	2746	44.6
1990	920.0	3289	28.0
1995	800.0	3154	25.4
2000	783.0	3617	21.6
2005	804.2	3785	21.2
2010	738.7	3820	19.3
2012	665	3597	20.5

Sources: Jelle Visser, ICTWSS Database at http://www.uva-aias.net/208; OECD.stat at https://stats.oecd.org/Index.aspx?DataSetCode=UN_DEN.

Following the recovery from the crisis of 1983–1985, industrial restructuring and subsequent privatization succeeded, to a large extent, in breaking up the concentrated industrial bastion of class trade unionism. Launched by the governments of the centre-right social democrats in the context of their programme of ‘structural reforms’ of the economy, privatization between 1989 and 1996 effectively dismantled the nationalized sector of heavy industry, as well as liberalizing the banks (Martins and Vieira, 1997). This was a lever for industrial and managerial change in general, though preparatory restructuring often anticipated privatization in the large enterprises of the public sector. The first phase in the privatization process would typically consist of granting managerial autonomy to public companies, leading to downsizing and dismemberment of the large, multi-divisional firms created by the nationalizations through outsourcing of non-core activities and job reductions, largely through contract termination with compensation and early retirement. (It is worth noting that, at its Seventh Congress in 1993, the CGTP attributed the causes of the serious fall in union membership to the ongoing restructuring and the resulting insecurity in employment.) The break-up in this process of the steel industry (Stoleroff and Naumann, 1995) and other heavy industries of the Setubal peninsula (Rosa, 1997) contributed to the fragmentation of the working class.

These processes involved significant downsizing in Portuguese companies, which is evident in the evolution of employment in terms of company size. Between 1987 and 1995, the number of employees in the largest companies – those with more than 500 employees – decreased by 115,911 and employment in these companies did not recover to the level of 1992, even after the increase between 1995 and 1999. While large companies with more than 500 employees made up 0.3 per cent of the total number of companies and 27.5 per cent of employment in 1987, by 1992 these proportions were 0.2 per cent and 21.7 per cent, respectively. In 1997 large companies represented only 0.1 per cent of companies and 18.6 per cent of employment.

This evolution coincided with a relative deindustrialization of the economy and a fundamental recomposition of the workforce. This trend can be discerned in the shift from a steady increase in the employed population within the broad secondary sector until the early 1990s to a significant decrease following 1992. There was some short-lived new growth at the end of the 1990s. With the turn of the century, there was a steady decrease in secondary sector employment, and in manufacturing in particular. Importantly, subsequent growth of industrial employment, however slight, took place within new organizational structures. The trends in secondary sector employment have been accompanied by a consistent and major decrease of the population employed in the primary sector (probably one of the major indicators of social change in Portugal since the last third of the 20th century). There was a consistent growth in employment in the tertiary sector until the effects of the most recent crisis. The important thing, however, is that this recomposition of the workforce derived from a break-up of much of the industrial structure which, since the 1960s, had sustained the particular working class culture that had been the incubator of the forms of struggle characteristic of the Portuguese revolution and democratic institutionalization.

In short, the structural-organizational incubator of potential industrial democracy – that is, the large industrial and other workforce concentrations – was restructured and thereby weakened the working class structure necessary to challenge managerial hegemony at work.¹⁵

Moreover, with the recovery from the 1983–1985 crisis, the labour market situation in Portugal became increasingly overshadowed by employment uncertainty and employment precariousness, even as employment grew and unemployment remained low. Typifying this trend, throughout the 1990s and beyond the percentage of employees in jobs based on fixed-term contracts steadily increased, reaching almost 20 per cent by the turn of the century. The proliferation of ‘atypical’ employment led to progressively mounting employment uncertainty and began to undermine the labour movement through its impact on unionization and bargaining strength.

Thus, in crucial aspects, liberalization, privatization and consequent restructuring put the labour movement decisively on the defensive, especially with regard to employment conditions. As in other countries, uncertainty was not conducive to challenging managerial power but, rather, led to reactive approaches in the hope of holding on to established positions and rights. As a result, although its erosion progressed gradually, industrial democracy has not recovered as unions have been confined increasingly to defensive negotiating stances and demands for economic democratization against the advance of neoliberalism.

In this context, managerial discourse on involvement and participatory schemes further took the wind out of any form of participatory industrial democracy – not to mention conventional industrial relations – through what might be called ‘pre-emption’. Of course, much of this type of involvement – for example, teamwork schemes or quality circles – was more rhetorical than genuine managerial practice, with precedence going to individualized personnel aspects of HRM whose aim is obtaining commitment to job performance. In industry, this sort of involvement rhetoric was more of the neo-Taylorist-type (Adler, 1993) than the kaizen (‘continuous improvement’) applied in automobile assembly. Nevertheless, in auto assembly and kindred activities, such ‘Japonization’ of work relations did indeed assume some relevance.

The advance of economic internationalization that accompanied the deepening of European integration altered the conditions for industrial location and relocation at European level. This put Portugal in uncertain territory, encouraging both investment – for example, with the Ford-VW joint venture – and disinvestment (as with Grundig, Renault and Opel). But the industrial relations of the new industrial implantation deviated from the existing pattern and in this respect the Ford-VW greenfield site in Palmela, AutoEuropa, had a disproportionate impact upon the system due to the model of lean production adopted there and the management’s preference to negotiate matters in collective bargaining with the Workers’ Commission to the detriment of the trade unions (see Stoleroff and Casaca, 1996).

The reality of industrial democracy at company level

Although the Portuguese model of industrial relations, as institutionalized in the period of democratic normalization following 1975, has put greater weight on the trade unions as vehicles of employee representation – specifically through their previously exclusive role in collective bargaining – the Constitution and labour legislation sustain a dual-channel system of employee representation, encompassing Comissões de Trabalhadores (Workers’ Commissions).¹⁶ These are the institutional legacy of the council-type organizations at enterprise level that emerged in parallel with the trade unions throughout the struggle for democracy and the revolutionary period (see Perez, 2008). Health and safety committees, created following the transposition of European directives, in which management and labour are represented in parity, are also supposed to exist.

Of course, the reality of the system is not established by the existence of formal rights. In line with the declining trend in union density, workplace-based representation also became increasingly tenuous as early as the crisis of 1983–1985 and came to be increasingly restricted to particular niches of the economy. Indeed, as early as the 1990s our surveys of company-based employment relations (Stoleroff, 2009) revealed the significant segmentation of company-level employment relations in Portugal, uncovering an extensive black-hole in the industrial relations system and a concentration of densely organized industrial relations in the largest companies – a very restricted segment of the system – where the organs of industrial democracy could be said to be fairly well developed, combining strong trade union presence with Workers’ Commissions.¹⁷ By the turn of the century, in the wake of restructuring and deindustrialization, a follow-up survey restricted to a sample of the largest companies showed that the black-hole had begun to encroach even on the largest companies (Stoleroff, 2009).¹⁸ The niche of well-developed industrial democracy had contracted.

As a result of the extension of existing agreements the absence of unions within this segment of largest companies does not mean that collective bargaining had ceased to apply there, but it did reflect the hole increasingly filled by employer unilateralism. These surveys demonstrated, in short, that unionization is a precondition for the effective representation of workers and, therefore, where significant unionization does not exist, there is a good chance that other forms of representation, such as Workers’ Commissions or health and safety committees, will not exist.

Crisis, ‘adjustment’ and industrial democracy

Most recently, the crisis has put Portuguese industrial relations in serious jeopardy. The weakening of industrial democracy has been exacerbated and both the disenfranchisement of the workers and the collapse of the basic institutions of industrial democracy appear to be constituent elements of the country’s ongoing ‘adjustment’, which was the aim of the austerity process implemented by the Troika’s Memorandum of Understanding (MoU) and Portugal’s neoliberal government (Ramalho, 2013; Rocha and Stoleroff, 2014). During the adjustment period the conventional backbone of industrial democracy, sectoral collective bargaining, suffered a severe breakdown, recognized as such by all currents within the labour movement (Távora and González, 2015).¹⁹ This crisis situation, characterized by a massive transfer of value from labour to capital (Leite et al., 2014) and a shift in the balance of power of class forces (Stoleroff, 2013), cannot help but restrict the labour movement’s perspectives with regard to industrial democracy as employment and equality become pressing demands, taking precedence over workplace empowerment of employees and unions.

In this context, job insecurity and unemployment are particularly restrictive in relation to the labour movement’s capacity to demand any kind of expansion of the domains of industrial democracy. In 2013 official unemployment reached 17.7 per cent. And though official unemployment rates have since receded to around 13 per cent, the real unemployment and under-employment rates are much higher (Observatório sobre Crises e Alternativas, 2015). Workers and unions are not thinking about industrial democracy but of jobs and social welfare. They are thinking about how to maintain jobs or how to resist the further dismemberment of the welfare state. This situation provides a legitimate rationale for political protest focused on economic justice without consideration of the union resources to achieve it (Stoleroff, 2014).

The threat of unemployment due to closures does indeed stimulate action and even local mobilization – but it is reactive and not expansive of industrial democracy. The activation of the latent mobilizing powers of the Workers’ Commissions of a large number of threatened companies has shown this to be the case. The shipyards of Viana de Castelo, Portugal Telecom or the TAP Airline Company are examples of how Workers’ Commissions have served as platforms for united protest against privatization. The same could be said of various cases in the private sector. However, their action in the circumstances of existential threat is not necessarily relevant to the questions of industrial democracy, especially because the outcome of such situations depends on politics.

More threatening still for the trade unions and for the institutions of industrial democracy has been the collapse of collective bargaining and the radical shrinkage of collective bargaining coverage (Table 2). The total number of agreements fell from 296 in 2008 at the start of the economic crisis to 85 in 2012. There was a slight increase in 2013 and a significant increase in 2014, although the latter was disproportionately due to acordos de empresa (enterprise-specific agreements). Moreover, it is extraordinary just how little coverage has increased with the increase in the number of agreements. Between 2011 and the implementation of the MoU in 2014 and the end of the Troika’s programme, industrial democracy has at least for the time being been superseded by deregulation for almost a million workers, as there has been a collapse in the number of workers covered by agreements and extension decisions.

Table 2.

Collective agreements, extension decisions and coverage.

Number	2008	2009	2010	2011	2012	2013	2014
Sectoral/branch agreements (CCT)	172	142	141	93	36	27	49
Limited collective agreements (ACT)	27	22	25	22	10	18	23
Enterprise-specific agreements (AE)	97	87	64	55	39	49	80
Total collective agreements	296	251	230	170	85	94	152
Published extension decisions	137	102	116	17	12	9	14
Workers covered by agreements	1,894,788	1,397,225	1,407,066	1,236,919	327,662	242,676	246,388

Source: UGT (2014, 2015).

AutoEuropa: the exceptional case and the future of decentralized bargaining

The onset of the crisis increased pressure for the decentralization of collective bargaining. Already in the 2009 revision of the Labour Code, the regulations on Workers’ Commissions were altered to permit the delegation of bargaining powers by unions to constituted representatives in the enterprises. The Troika’s Memorandum of Understanding then incorporated decentralization of collective bargaining into its demands. It called upon Workers’ Commissions to take up a role in company-based bargaining.

There are several issues involved here with regard to the discussion in this article. To begin with, it is questionable whether the attribution or derogation of bargaining powers and competencies to lower levels of the system constitute an approximation to the rank-and-file worker or employee; much depends upon the degree of collective organization at the workplace – and as we have seen, the presence of representatives from unions and the existence of Workers’ Commissions are far from satisfactory from the point of view of the needs of workers in this situation.

Unions have been divided in their reaction. The UGT is generally in favour of the ‘controlled decentralization’ of collective bargaining – application of sector or branch agreements at the company level through bargaining by company-based union organizations or delegations with management. The CGTP sees the changes introduced in the Labour Code of 2003 and revised in 2009 as a source of stalemate and a retrograde step for collective bargaining and as an instrument favouring the employers’ strategy of lowering wage costs and increasing insecurity. The CGTP has not made a positive statement regarding the proposals for decentralizing collective bargaining, considering that the possibility of such decentralization already existed in the law and opposed the delegation of bargaining power to non-union organizations as unconstitutional.

Much of the discussion regarding this issue is influenced by the experience of the VW assembly plant, AutoEuropa, where a fairly successful company-based system of industrial relations centred on the Workers’ Commission rather than the unions has been functioning for almost two decades.

AutoEuropa is, however, an exceptional case with many special characteristics: the expectations of human resource managers trained in the German works council culture, the pivotal place of the firm in the Portuguese export economy, the high value-added nature of the production branch, the skilled character of its relatively high-wage workforce and so on. Moreover, the integration of the establishment’s Workers’ Commission within the VW European Works Council uniquely provides its members with a perspective on the industrial relations culture of a major German firm (Costa, 2013). These circumstances provided an opportunity for an internal leadership group, autonomous of union and parties, to emerge and implement a very pragmatic approach to the development of decentralized company bargaining. Key to its success has been agreements that made concessions regarding flexible working time and pay moderation in return for guarantees of relative job security.

Conclusion

This article has presented some explanations of the Portuguese labour movement’s lack of demands for participation and its limitation of industrial democracy largely to the institutions of sectoral collective bargaining and concertation. This approach goes hand in hand with a common political focus on economic democratization in the sense of economic justice.

Quiescence in the workplace was not always the case, but the experiences of direct democracy in 1974–1975, though spectacular, turned out to be ephemeral. The rank-and-file movement for workers’ control was largely exhausted by conflicting political logics, which, at the time, derived largely from the efforts by the PCP and the CGTP to control the workers’ movement, despite the positive retrospective appreciation by Álvaro Cunhal, who led the party throughout the revolution and democratization, of the role of workers’ control in the Portuguese revolution (1976: 121–122).

Hindsight might lead us to conclude that the principal dynamic of this period was in fact that of organizational consolidation rather than independent mass mobilization (Lomax, 1983). In this sense the rank-and-file upsurge can be understood as a short-lived expression of workers’ pent-up needs and demands, especially in the large industrial concentrations, rapidly to achieve the rights and status expected of democracy. It can then be argued further that organizational control led to subsequent passivity among the rank-and-file and mitigated their impetus towards direct democracy. In the subsequent development of the labour movement, hardly any significant faction would conceive of industrial democracy outside of the parameters of economic democracy and industrial relations. Indeed, the majority tendency in the labour movement reflects a sort of ‘Cleggian’ perspective and, although partial to public ownership of the means of production, rejects conceptions of industrial democracy that would involve the workers or the unions in either co-management, co-determination or any participatory schemes that would mitigate their opposition role and attenuate class struggle.

The labour movement consolidated its victories within the new democratic institutions, which meant anchoring the industrial relations system in strong trade union organization and the defence of basic framework agreements. Simultaneously, the system adopted and adapted the Workers’ Commissions, which had emerged initially as the workers’ expression of direct democracy, as an auxiliary form of representation. These organs, however, developed irregularly and mostly subordinate to the unions, thereby denying their continuity with their participatory origins.

The overpoliticization of labour strategies, the legacy of the previous conflicts, further distanced the labour movement from the potential workplace locus of struggle. The CGTP politicized struggle in the hope of resurrecting the previous balance of class forces in struggle, while the UGT sought to gain resources at the peak level that it was incapable of obtaining in the workplace.

Given this context and the challenges subsequently imposed by European integration, globalization, privatization and the restructuring that led to a recomposition of the working class, it is understandable that the strategic targets of this highly politicized, but weakened labour movement would grant a privileged place to, on the one hand, a resurrection of collective bargaining and concertation and, on the other, economic justice, in the sense of democratization, with its locus of action at the state and political level. But such empathy should not allow us to dismiss the issues of workplace democracy and rank-and-file mobilization. Quite the contrary: the future of industrial democracy in Portugal is highly uncertain and it seems that it will continue to atrophy without a major resurgence of labour at the workplace and rank-and-file levels, together with some sort of revitalized social democratic politics.

Footnotes

Funding

This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors.

Notes

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