The government admits aggravate TSU on fixed-term contracts – the Observer

The socialist Government believes that the penalty of companies opting for temporary contracts — one of the recommendations enlisted in the report on labor reform presented by the OECD – may have a positive impact to decrease the precariousness of the Portuguese labour market.

The report Labour Market Reforms in Portugal 2011-2015 – Preliminary Assessment ("The reforms of the labour market in Portugal in the period 2011-2015: a preliminary assessment) was presented this Thursday, in Lisbon, in a ceremony that counted with the presence of the authors of the study and responsible of the OECD, as well as the minister of Labour and Social Security, José António Vieira da Silva, and their ministerial team. For the ruler of the Portuguese, this may be a way to change a reality where the "62% of new contracts are contracts tozo" and to achieve a "goal that was not at all achieved": the reduction of "labour market segmentation" between contracts and temporary contracts to permanent.

first, as the secretary of State for Employment, Miguel Cabrita, had praised the "innovative aspects" in the report, referring precisely to the worsening of the contributions for contracts that are not permanent. "A solution", continued Miguel Cabrita, "that the Government has already put on the table" and that may help combat youth unemployment and long-term unemployment.

Another of the recommendations suggested by the OECD relates to the reduction of the Unique Social tax (TSU) of the companies to compensate for the increase in the minimum wage — a measure that the Government that closed down in the social dialogue and that the Parliament prepares to stopping. About this, Vieira da Silva could not resist responding indirectly to Pedro Passos Coelho. When faced with the decision of the PSD to vote against a measure that the OECD recommends, the minister replied:

[The OECD recommendation] reinforces the idea that it is socially appropriate and economically feasible to monitor a rise in the minimum wage with a reduction of the contributive effort of the companies that have workers with the minimum wage. [But] the OECD is not a divine institution. I admit that the lord president of the PSD does not follow that the opinion of the OECD".

Even agreeing with the OECD on this matter, the minister of Social Security reminded us that there are differences of opinion between the organization and the Portuguese Government. "The studies prove nothing. Does not constitute any decision factor. But without your realization our decision will always be more fragile, more patchy, and more subject to error".

In statements to journalists at the end of the presentation and discussion of the report of the OECD, Stefano Scarpetta, has recognized that the penalty of the firms that use temporary contracts can be a positive step, but remembered: "There are potential risks, because the recovery in Portugal is still fragile, there is much uncertainty, some companies may not be prepared to hire on a permanent basis and you may begin to hire on a temporary basis, and if you increase the contributions to Social Security may be a disincentive".

The responsible for the study of the report of the OECD — whose preliminary version was presented first hand by the Observer — were to pass in review the principal findings of the report and noted the effort that Portugal has made in the direction of approach of the best practices that exist between the countries of the OECD.

Even so, and as the Observer wrote here, the OECD recommends that Portugal go further in certain aspects. To the head, the legislators Portuguese must strengthen "the protection in unemployment by widening the coverage of unemployment benefits to more workers," and, at the same time, "reduce the values and maximum time of the grant". These measures will safeguard those responsible for the report must be accompanied by an effort decided on "strengthening of employment programs" and "support to the reintegration into working life of those who are looking for employment".

Still uphold the "reduction in employers ‘ contributions to social security for all workers who earn the minimum wage", the OECD does recommend that wage developments reflect "more strictly to the developments in productivity at the level of enterprises". An effort, repeat the authors of the study, which should accompany the clarification of the rules of negotiation and contracting collective.

in The end, those responsible for the report reaffirm that the Portuguese labour market only will melhorarias significant if Portugal is to "return to higher levels and more sustainable growth"; to introduce more competitiveness in the sectors of Energy and Transport, for example; "ensuring a better access to credit on the part of the companies"; to reduce "the cost of non-labour"; and to invest decisively in the qualification of young and adult education.