Proposal on wage transparency? Employers manifest “reserves”

ANDm written response to Lusa, the Director-General of CIP – Empresarial Confederation of Portugal argues, that, despite the intention to be “good”, the European directive “comes against the debureaucratizing spirit of Europe”, considering that “it introduces more administrative burden and can have perverse effects on the management of people, labour costs, organizational culture and legal risk”.

On the proposal that the Government is preparing to adapt the European directive to Portuguese legislation, Rafael Alves Rocha points out that the amendments “substantially modify the legal regime in force” and will “force companies to define new methodologies, create new structures, document ad eternum processes and respond to requests for information indefinitely”.

“More headaches for companies with reduced or deficient structures,” he warns.

The concern is shared by the President of the Confederation of Tourism of Portugal (CTP) by stating that the draft bill “can and should be improved, especially in order to ensure proportionality, legal certainty and reduction of administrative burdens for companies”.

“There is always the temptation of legislators to transpose maximum standards instead of minimum standards,” Francisco Calheiros warns in a written response to Lusa, recalling that this “concern is particularly relevant” for tourism, which has a “strong presence of micro, small and medium-sized enterprises, high seasonality and a significant diversity of functions, qualifications, labour markets and geographies”.

The president of the Confederation of Farmers of Portugal (CAP), Álvaro Mendonça and Moura, makes a “generally positive appreciation” of the government’s proposal, but says he has “some reservations”, particularly with regard to the “own business, in which this will result in the binomial loss/gain of ‘social peace’ within them” in the “fiscalization of its application on the ground”.

The president of the Confederation of Commerce and Services of Portugal (CCP) points out that the “CCP does not identify gains — not for workers, not for companies”, but “more bureaucracy, more technical complexity and more legal risk”, pointing out that this is a “lost opportunity”.

Gustavo Paulo Duarte recalls that there are countries in Europe that have requested the revision of the directive, stressing that he would like the Portuguese Government to “have had the confidence to be part of this group”, and criticizes the deadline imposed by the executive – considering it to be “manifestly short and incompatible with the complexity of the matter” – as well as “the absence of any flexibility for specific realities”.

Among the concerns listed by Álvaro Mendonça and Moura is the “introduction of totally unbalanced burdens and burdens” for SMEs, which makes up most of the Portuguese business fabric.

It therefore calls for a “balance between the need to achieve equal pay and the need to avoid disproportionate and highly harmful administrative burdens for these enterprises” and for the Authority for Working Conditions (ACT) to provide the necessary human and financial resources for the skills required.

Among the contributions sent to the Government, the CIP considers that the draft diploma “is missing in terms of linking obligations on remuneration transparency with the remuneration provisions of Collective Regulatory Instruments (IRCT) applicable to companies”.

With regard to the reporting by employers, it is stated that “there is no identification that “necessary information broken down by sex” should be reported by companies to the data processing entity or its format,” and therefore it considers “relevant” that these aspects should be clarified.

The CTP wants “to eliminate the requirement according to the employees’ representatives in defining the corporate remuneration policy”, as well as “to ensure a proportionate application” of the reporting and reporting rules, in order to avoid “imposing disproportionate administrative procedures on smaller companies”.

In this context, the CAP also considers that the proposal “has gone much further” than the directive, by covering companies with 50 or more employees” and argues that “this option should be accompanied by an adequate assessment of its impact”.

It also asks for a review of the 90-day deadline determined in the government proposal for the employer to justify or submit measures to correct the differences in average pay levels due to sex detected.

The CCP, in addition to extending the transitional period, wants to see clarified “what is meant by unjustified differences”, arguing that it is “essential” that the law “explicitly acknowledges that a statistically identified remuneration difference does not in itself constitute evidence of discrimination, and its origin, evolution and objective justification should be examined”.

It also advocates the withdrawal of the requirement that transparent remuneration policy be agreed with workers' representatives when they exist.