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Board-level Representation

 

There are constitutional provisions giving Portuguese employees the right to elect representatives on the governing bodies of state-owned companies and other public bodies. However, these provisions have been implemented in a way which means that they only have a consultative role, and relatively few state-owned companies are covered. There is no employee board level representation in private companies.

The Portuguese Constitution states in Article 54 that works councils “have the right … to promote the election of workers' representatives to the governing bodies of enterprises that belong to the state or other public entities, as laid down by law”.

 

The Labour Code similar states that the works council of a “ public corporate entity promotes the election of workers' representatives to the governing bodies” of that entity, and that the voting system shall be as set out in the Labour Code “in terms of the list of electors, voting sections, voting and counting of results”. However, it goes on to state that the number of employees to be elected, as well as the body on which they sit, are to be determined by the company’s own statutes (Article 428).

 

In practice, it appears that relatively few state-owned Portuguese companies have implemented these provisions. Research in 2011 found only a small number of state-owned companies – all but two in the health sector – with employee representatives on company bodies and in every case they were limited to a single individual on a consultative board “conselho consultivo”, whose duties are advisory.[1]

 

The legislation (a Decree Law) covering bodies in the health sector (Decreto-Lei n.º 18/2017, which replaced earlier legislation – Decreto-Lei n.º 233/2005) provides for one employee representative in a consultative board of seven or eight members. The election method is not specified, and the terms of office is three years. At the end of 2019, there were 41 hospitals and other local heath units which had the form of a public corporate entity “entidade pública empresarial”.[2]

 

The two public bodies outside the health sector with employee representatives on the consultative board are Comboios de Portugal (the railways), whose consultative board was established by Decreto-Lei n.º 137-A/2009, and Metropolitano de Lisboa (Lisbon metro), whose consultative board was established by  Decreto-Lei n.º 148-A/2009. In Comboios de Portugal, the employee representative is one of six normal members, with the possibility of further co-options, and, in Metropolitano de Lisboa, one of 10. In neither company is the method for selecting the employee representative specified. Like other members of the consultative board, their period of office is three years, although, in the case of Metropolitano de Lisboa, this mandate can only be renewed up to three times.

 

Separate legislation, passed in 1976 and amended in 1984, which gave employees the right to elect one member of the board of directors in state-owned companies, was repealed in 1999.[3] The justification for the repeal at the time was in part that the number of state-owned companies had been greatly reduced and subsequent privatisations have further cut the number of companies owned by the state.

 

In the private sector, there is no effective legislation giving employees the right to be represented at board level. Legislation permits employee representation to be agreed between employers and unions, but in practice this does not happen.

[1] Based on research by Aline Conchon ETUI (March 2011) The companies with employee representatives in consultative boards at that time were 47 state-owned companies in the health sector (in accordance with art. 18 of the Decree-Law 233/2005 regulating the statutes of health state-owned companies), plus Metropolitano de Lisboa (Lisbon metro) and Comboios de Portugal (railways)

[2] List of state holdings, General Directorate of Treasury and Finance, http://www.dgtf.pt/centro-de-documentacao-e-legislacao?tabid=993 (Accessed 30.06.2020)

[3]  This right was provided in Decreto-Lei n.º 260/76 and amended in Decreto-Lei n.º 29/84. It was finally abolished in Decreto Lei n.º 558/99

L. Fulton (2021) National Industrial Relations, an update (2019-2021). Labour Research Department and ETUI (online publication). Online publication available at http://www.worker-participation.eu/National-Industrial-Relations.