.3. The company was set up from the beginning with this organisational design. Volkswagen's objective was to obtain better technical quality in production through specialisation.
Having suppliers nearby allows for greater control over the organisation of production and product quality. The relationships between types of cost are important.
According to the unions though, the aim of the central company is to avoid having social or organisational responsibility for the workers or unions.
Labour costs in terms of wages are not considered particularly relevant. In the pursuit of lower labour costs, various aspects of the situation are analysed, especially when a particular country is being considered for setting up a plant. One goal may be to keep foreign workers in Portugal for the shortest possible time.
2.1
1) forms of outsourcing that may generate responsabilities
? transmission of an establishment or company: a business transaction under which the ownership or right to operate a company, establishment or other autonomous part of a producer organisation is temporarily or definitively transferred to another legal person or entity.
? . home-working / tele-working: the company enters into a service contract with a worker under the terms of which the latter a) performs the activity which forms the object of the contract at his domicile or such other place as he may choose, or b) the worker promises to buy raw materials from the company and then supplies that company with the finished product in return for a given price.
In either case, the legal home-working regime only applies if, due to the contract, the worker becomes economically dependent on the company. Under the terms of the law, the home-working regime is not applicable to tele-working because the law does not include, within its scope, contracts which involve the supply of intellectual work.
? temporary work: the company enters into a contract with a temporary employment company, under which the latter promises to cede it the benefit of the work done by one or more staff for a given period of time.
? iv. supply of services: the company enters into a contract with a party (an individual person or a collective/corporate entity) under which the latter promises to either provide that company with a specified result of its work or to supply it with a certain type of work on an autonomous basis.
? v. fixed-length contracts: the company and the worker enter into an employment contract that is subject to termination at the end of a certain period (this is only possible in those limited cases that are expressly provided for by Law).
2) the work-related liabilities of the hiring company:
? transmission of an establishment or company: liabilities are transferred to the recipient.
? vii. home-working / tele-working: the hiring company is subject to a regime which is substantially that imposed by the civil law; in cases involving home-working, a few things are subject to rules that are similar to those applicable under the regime governing employment contracts (e.g. social security deductions and responsibility for supervising the contract's stability).
? viii. temporary work: the hiring company has no liability towards the workers provided by the temporary employment company whatsoever.
? ix. supply of services: the applicable regime is simply that imposed by the civil law.
? x. fixed-length contracts: given that these are employment contracts, the company's liabilities towards the employees concerned are of the same type as those it possesses in relation to its permanent staff.
3) the liabilities of a sub-contracted company:
? the transmission of an establishment or company: the recipient is subject to the same liabilities as any other employer.
? . home-working / tele-working: the other party is an individual person (as opposed to a company, etc.).
? . temporary work: the temporary employment company is subject to the same liabilities in relation to its staff (whether they are permanent employees or persons who have entered into a specific employment contract with the company) as any other employer.
? supply of services: the service provider's liabilities towards those it uses to fulfil the contract depend on the terms of the type of bond which exists between itself and the staff concerned.
? 4)and 5) No relevant
3. Outsourcing and collective bargaining
3.1. State for each relevant level in collective bargaining of your country - multi-sector, sectoral (motor manufacturing industry), regional, company:
1) Organisations representing the automotive sector point out that outsourcing, as such, never appears on collective bargaining agendas. The consequences of outsourcing relate to the employment relationship, which is regulated by law, labour law.
2) Recently some unions have pushed for changes in the law on transfer of undertakings in order to strengthen worker protection and assure that rights acquired in the initial company are guaranteed to workers in subcontracted companies.
3) Not relevant.
4) Not relevant
5) Not relevant
3.2.
? New bargaining levels;
? According to the organisations involved, there have been no changes in terms of formal collective bargaining. There has been, however, greater pressure on the part of central companies to promote sector level negotiation and introduce new topics at this level.
? An increase in bargaining in geographical areas ?
? In the concrete case of the automotive industry and Volkswagen, outsourcing has led to a certain degree of geographic and associative concentration of companies, rather than a broadening of areas.
? An increase in bargaining in sectors/subsectors ?
? Sector level collective agreements are signed by employers associations and unions (production workers, administrative employees) that cover all the sectors and subsectors involved in automotive assembly, sales and repair, including component assembly, whatever the size of the enterprise
? According to the unions, subcontracted companies in some subsectores choose to apply contracts that are more favourable to them, such as chemical industry contracts in the case of wheel rim mounting. Or they may claim that an outsourced activity is new activity, such as supplying the assembly line (logistics) or preparing sheet metal, arguing that this is a collective bargaining "grey area" that allows them to apply the general law, which is less favourable to workers.
? A reduction in the coverage of company agreements?
? There are no formal company level agreements in the automotive industry. The central company has, in some years, negotiated informal agreements with the workers' committee to improve salaries and introduce working time flexibility- annualisation. Some doubts have been raised
? regarding work on Saturdays. On this point the sector level agreement provides for more favourable conditions, and these legally supersede those in the company level agreement. No negotiations have taken place in the past year. A lot of copying and comparing of working conditions goes on between the various companies due to their proximity to each other and the fact they are all involved in the same production process. This generates some points of contention in the central company.
? .- A reduction in the effectiveness of sectoral agreements? (eg because of more SMEs)
? According to the AIMA, collective bargaining agreements have negotiated minimums so that they may apply to small enterprises. Companies may then establish better conditions. Unaffiliated companies are covered by extension orders, so workers in small and medium-sized enterprises would in any case be covered.
3.3. If there is any other available data on collective bargaining and outsourcing, please provide a brief report.
In Portugal the topics addressed in collective bargaining have been limited to working conditions, wages in particular. There is an enormous difficulty of effectively negotiating working time, qualifications, or job training.
. Outsourcing and trade unions
4.1.
Outsourcing by a company means that unions must work harder to maintain union representation in an ever increasing number of enterprises. In the case of the the Chemical Workers and Metalworkers Federations have merged into a single union federation in order to facilitate their work when companies's activities fall into more than one sector.
4.2.
Some of the companies, particularly the central company, have been putting pressure on the association by providing better working conditions, such as wages and subsidies, and by practising a more rational organisation of work. They have demonstrated an interest in more intensive negotiations on increased flexibility and qualifications.
4.3.
According to the unions, outsourcing means more work for the unions because the constant changes in the design of companies means that there is no union or worker collective stability in the internal organisation and occupational career ladders are not created within the companies. At the same time, union delegates must be permanent full-time employees, who are less vulnerable to pressure on the part of the company.
4.4. What are the views of trade union organisations on the outsourcing strategy.
According to the unions, companies should not be allowed to continue to enter into fixed term contracts for services with each other because this allows them legally to place their workers in atypical contract situations. In comparison with other sectors of activity in the automotive industry, the percentage of workers at the greensite who have permanent full-time status is relatively high, between 60 and 80%.
In some companies, however, the turnover is high due to the fact that young people are not attracted to traditional work (mounting upholstery, for example).
There is a possibility that in the future subcontracting will be done solely with companies using workers in precarious employment conditions, resulting in lower costs.
The central companies goal is to reach a stage in which they will no longer have workers of their own. It seems that Volkswagen plans to continue outsourcing, even on the assembly line, namely for final finishing work.
Nevertheless, as the sector is expanding and layoffs are not expected, workers will not react negatively and the outsourcing trend is likely to continue.
Having suppliers nearby allows for greater control over the organisation of production and product quality. The relationships between types of cost are important.
According to the unions though, the aim of the central company is to avoid having social or organisational responsibility for the workers or unions.
Labour costs in terms of wages are not considered particularly relevant. In the pursuit of lower labour costs, various aspects of the situation are analysed, especially when a particular country is being considered for setting up a plant. One goal may be to keep foreign workers in Portugal for the shortest possible time.
2.1
1) forms of outsourcing that may generate responsabilities
? transmission of an establishment or company: a business transaction under which the ownership or right to operate a company, establishment or other autonomous part of a producer organisation is temporarily or definitively transferred to another legal person or entity.
? . home-working / tele-working: the company enters into a service contract with a worker under the terms of which the latter a) performs the activity which forms the object of the contract at his domicile or such other place as he may choose, or b) the worker promises to buy raw materials from the company and then supplies that company with the finished product in return for a given price.
In either case, the legal home-working regime only applies if, due to the contract, the worker becomes economically dependent on the company. Under the terms of the law, the home-working regime is not applicable to tele-working because the law does not include, within its scope, contracts which involve the supply of intellectual work.
? temporary work: the company enters into a contract with a temporary employment company, under which the latter promises to cede it the benefit of the work done by one or more staff for a given period of time.
? iv. supply of services: the company enters into a contract with a party (an individual person or a collective/corporate entity) under which the latter promises to either provide that company with a specified result of its work or to supply it with a certain type of work on an autonomous basis.
? v. fixed-length contracts: the company and the worker enter into an employment contract that is subject to termination at the end of a certain period (this is only possible in those limited cases that are expressly provided for by Law).
2) the work-related liabilities of the hiring company:
? transmission of an establishment or company: liabilities are transferred to the recipient.
? vii. home-working / tele-working: the hiring company is subject to a regime which is substantially that imposed by the civil law; in cases involving home-working, a few things are subject to rules that are similar to those applicable under the regime governing employment contracts (e.g. social security deductions and responsibility for supervising the contract's stability).
? viii. temporary work: the hiring company has no liability towards the workers provided by the temporary employment company whatsoever.
? ix. supply of services: the applicable regime is simply that imposed by the civil law.
? x. fixed-length contracts: given that these are employment contracts, the company's liabilities towards the employees concerned are of the same type as those it possesses in relation to its permanent staff.
3) the liabilities of a sub-contracted company:
? the transmission of an establishment or company: the recipient is subject to the same liabilities as any other employer.
? . home-working / tele-working: the other party is an individual person (as opposed to a company, etc.).
? . temporary work: the temporary employment company is subject to the same liabilities in relation to its staff (whether they are permanent employees or persons who have entered into a specific employment contract with the company) as any other employer.
? supply of services: the service provider's liabilities towards those it uses to fulfil the contract depend on the terms of the type of bond which exists between itself and the staff concerned.
? 4)and 5) No relevant
3. Outsourcing and collective bargaining
3.1. State for each relevant level in collective bargaining of your country - multi-sector, sectoral (motor manufacturing industry), regional, company:
1) Organisations representing the automotive sector point out that outsourcing, as such, never appears on collective bargaining agendas. The consequences of outsourcing relate to the employment relationship, which is regulated by law, labour law.
2) Recently some unions have pushed for changes in the law on transfer of undertakings in order to strengthen worker protection and assure that rights acquired in the initial company are guaranteed to workers in subcontracted companies.
3) Not relevant.
4) Not relevant
5) Not relevant
3.2.
? New bargaining levels;
? According to the organisations involved, there have been no changes in terms of formal collective bargaining. There has been, however, greater pressure on the part of central companies to promote sector level negotiation and introduce new topics at this level.
? An increase in bargaining in geographical areas ?
? In the concrete case of the automotive industry and Volkswagen, outsourcing has led to a certain degree of geographic and associative concentration of companies, rather than a broadening of areas.
? An increase in bargaining in sectors/subsectors ?
? Sector level collective agreements are signed by employers associations and unions (production workers, administrative employees) that cover all the sectors and subsectors involved in automotive assembly, sales and repair, including component assembly, whatever the size of the enterprise
? According to the unions, subcontracted companies in some subsectores choose to apply contracts that are more favourable to them, such as chemical industry contracts in the case of wheel rim mounting. Or they may claim that an outsourced activity is new activity, such as supplying the assembly line (logistics) or preparing sheet metal, arguing that this is a collective bargaining "grey area" that allows them to apply the general law, which is less favourable to workers.
? A reduction in the coverage of company agreements?
? There are no formal company level agreements in the automotive industry. The central company has, in some years, negotiated informal agreements with the workers' committee to improve salaries and introduce working time flexibility- annualisation. Some doubts have been raised
? regarding work on Saturdays. On this point the sector level agreement provides for more favourable conditions, and these legally supersede those in the company level agreement. No negotiations have taken place in the past year. A lot of copying and comparing of working conditions goes on between the various companies due to their proximity to each other and the fact they are all involved in the same production process. This generates some points of contention in the central company.
? .- A reduction in the effectiveness of sectoral agreements? (eg because of more SMEs)
? According to the AIMA, collective bargaining agreements have negotiated minimums so that they may apply to small enterprises. Companies may then establish better conditions. Unaffiliated companies are covered by extension orders, so workers in small and medium-sized enterprises would in any case be covered.
3.3. If there is any other available data on collective bargaining and outsourcing, please provide a brief report.
In Portugal the topics addressed in collective bargaining have been limited to working conditions, wages in particular. There is an enormous difficulty of effectively negotiating working time, qualifications, or job training.
. Outsourcing and trade unions
4.1.
Outsourcing by a company means that unions must work harder to maintain union representation in an ever increasing number of enterprises. In the case of the the Chemical Workers and Metalworkers Federations have merged into a single union federation in order to facilitate their work when companies's activities fall into more than one sector.
4.2.
Some of the companies, particularly the central company, have been putting pressure on the association by providing better working conditions, such as wages and subsidies, and by practising a more rational organisation of work. They have demonstrated an interest in more intensive negotiations on increased flexibility and qualifications.
4.3.
According to the unions, outsourcing means more work for the unions because the constant changes in the design of companies means that there is no union or worker collective stability in the internal organisation and occupational career ladders are not created within the companies. At the same time, union delegates must be permanent full-time employees, who are less vulnerable to pressure on the part of the company.
4.4. What are the views of trade union organisations on the outsourcing strategy.
According to the unions, companies should not be allowed to continue to enter into fixed term contracts for services with each other because this allows them legally to place their workers in atypical contract situations. In comparison with other sectors of activity in the automotive industry, the percentage of workers at the greensite who have permanent full-time status is relatively high, between 60 and 80%.
In some companies, however, the turnover is high due to the fact that young people are not attracted to traditional work (mounting upholstery, for example).
There is a possibility that in the future subcontracting will be done solely with companies using workers in precarious employment conditions, resulting in lower costs.
The central companies goal is to reach a stage in which they will no longer have workers of their own. It seems that Volkswagen plans to continue outsourcing, even on the assembly line, namely for final finishing work.
Nevertheless, as the sector is expanding and layoffs are not expected, workers will not react negatively and the outsourcing trend is likely to continue.