TRIBUNAL CONSTITUCIONAL Portugal

RULING No. 260/15

5 of May of 2015

Headnotes:

An Executive Law established a new regime containing principles and rules for the state business sector. Two of its articles include norms that subject the members of the governing bodies, managers and staff of state business entities, enterprises in which the state is the sole or majority shareholder, and entities in the public local and regional business sectors to certain aspects of the labour regime governing public servants (meal, expense and travel allowances for travel in Portugal and abroad; overtime pay; rates of pay for working at night).

These norms are imperative and prevail over any others that contradict them, including special and exceptional norms. They also prevail over collective labour regulation instruments – i.e. agreements reached through collective bargaining – which cannot waive or modify them. The only exception to this priority is the State Budget Law, whose provisions continue to prevail over the norms.

The Constitutional Court declined to find these norms unconstitutional. The imperative transposition to the state-owned business sector of the limitations on the right to contractual autonomy that apply to public servants with a public labour contract does not infringe on the space which the Constitution sees as essential to the affirmation of trade unions’ competence to engage in collective bargaining. It may also be linked to public-interest reasons that are important enough to justify prohibiting any discretionary ability (i.e. in company agreements) to determine the amount of the pay supplements due to staff in the state-owned business sector.

Summary:

his abstract ex post facto review was requested by a group of Members of the Assembly of the Republic, under a constitutional norm that enables one tenth of the Assembly’s Members to make such petitions.

The petitioners challenged norms in the new (2013) legal regime governing the state business sector, including the regional and local equivalents, which subject its staff to the regime governing labour contracts applicable to public servants, in matters concerning meal and travel allowances and overtime pay and pay for night-time working. They argued that the norms were in breach of the right to collective bargaining and agreements, and injured the proportional equality aspect of the principle that excess is prohibited.

The Court took the view that the fact that the legal regime applicable to staff with a public labour bond can be the object of derogation means that the only result which the imperative imposition of these norms holds for the state business sector is that the possibility of the contractual self-regulation of the matters in question is in turn subject to the requisites of the General Law governing Labour in the Public Service (LTFP).

In its past jurisprudence the Constitutional Court had already held that public-order reasons can justify making certain aspects of labour regimes imperative, and that in the Labour Law field this can in turn be sufficient reason not to consider decisions which remove the parties’ ability to control the details of the procedures regulated by those regimes to be constitutionally illegitimate. If this is the case when it comes to regulating the relations between private-law subjects, then it must be all the more true with regard to the modelling of certain dimensions of the status of agents with binding ties to entities which, notwithstanding their possession of legal personality under the private law and the fact that they are generally bound by that branch of the law, are concomitantly subject to certain public-law rules, either in the public interest whose pursuit is their raison d’être, or as an effect of the exercise of the economic and financial prerogatives of authority which the law attributes to entities with powers of supervision and oversight over them. The former category of entities are instruments which exist to pursue the public interest and which help determine the indexes that measure the state’s financial sustainability.

The reform of the regime governing the state business sector undertaken by the Executive Law that includes the norms before the Court was designed to further the objective of enhancing the operational and financial efficiency and efficacy of all the sector’s enterprises, help control public-sector debt, and subject the core matters regarding every business organisation directly or indirectly owned by public administrative or business entities, whatever their legal form, to the same regime.

Protecting the interest in safeguarding the state’s financial integrity is a justification that is important enough not to refuse the limitations which the legal/functional regime governing all workers paid out of public funds places on the collective bargaining about these aspects of the labour relationship.

The Court also rejected the argument that the norms violated the principle of the protection of trust (legal certainty). It said that for several years we have been witnessing a general trend towards making the members of the governing bodies, managers and staff of state business entities, enterprises in which the state is the sole or majority shareholder, and entities in the public local and regional business sectors equivalent to public servants – a choice that has not only been pursued uninterruptedly since it began to be made, but whose context has not changed either.

Given these precedents in terms of the behaviour of the state/legislator, the latter’s renewed affirmation that regimes which already govern public servants also apply to the state business sector cannot be seen as unexpected.

On the question of whether, from the point of view of the principle of the protection of trust (legal certainty), the expectations generated by the collective labour regulation instruments entered into in the state business sector can preclude more recent options taken by the state/legislator, the Court has gradually been establishing the position that this is not the case; and moreover that neither the previous indications given by the state/legislator itself, not its behavioural precedents constitute a situation in which there is a certainty that legitimately deserves protection.

The Court also considered that the result of the challenged measures – an increase in the financial self-sustainability of the entities in question and the consequent reduction in their actual or potential needs for transfers from the State Budget to cover their economic and financial shortfalls – was not disproportionate to the burden which the measures imposed on the staff in question.

For all these reasons, the Court found no unconstitutionality in the norms before it.

Supplementary information:

The Ruling was the object of 4 concurring and 5 dissenting opinions (not all with regard to the same norms).

Cross-references:

See Rulings nos. 94/92 (16-03-1992); 413/14 (30-05-2014); and 794/13 (21-11-2013).