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Politics of labor reform in post-transition Brazil: Possibilities and limits of the labor reform in a conservative transition
Oh, Samgyo, Ph.D.
The Ohio State University, 1994
UMI 300 N. Zeeb Rd. Ann Arbor, MI 48106 POLITICS OF LABOR REFORM IN POST-TRANSITION BRAZIL:
POSSIBILITIES AND LIMITS OF THE LABOR REFORM IN A CONSERVATIVE TRANSITION
DISSERTATION
Presented in Partial Fulfillment of the Requirement for the Degree Doctor of Philosophy in the Graduate School of The Ohio State University
by
SAMGYO OH, B.A., M.A.
★ ★ ★ ★ ★
The Ohio State University
199 4
Dissertation Committee: Approved by
R. William Liddle
Goldie Shabad
Felipe Aguero Adviser Department of Political Science TO MY PARENTS
I i ACKNOWLEDGMENTS
I am very grateful to Professors William Liddle, Goldie Shabad, and Felipe Agiiero for
serving on my dissertation committee. Professor Liddle offered intellectual guidance for
this study and was always willing to help out with whatever problems occurred during
the course of research. I owe him a great deal of encouragement and patience. Professor
Shabad was very kind and understanding in various stages of the writing of the
dissertation. Professor Agiiero offered very valuable criticism and comments which were critical in developing and refining some of the basic ideas in the dissertation.
I am also thankful to the Tinker Foundation for supporting my travel to Brazil.
Numerous people in Brazil were very helpful and kind. I thank all the interviewees who were willing to give their precious time and expert knowledge. I am especially thankful to Sandra Valle who not only granted interviews several times but also referred me to several influential figures including former Labor Minister Pazzianotto. I am also indebted to Antbnio Augusto de Queiroz of DIAP. He not only let me use major publications and documents of DIAP but also gave his precious time to share his intimate knowledge on the process of labor reform. Maria Silvia Poriella de Castro of the CUT also was generous in giving out CUT publications and making some of the internal documents available to me. Sergio Ferreira, a researcher in FASE and author of the Politicas Governamentais
(IBASE) on union policy, not only made available m ost of his writings on the union policy but also spoke with me several hours sharing his expertise. I would also like to thank three women in the Senate Library in Brasilia who helped me find and copy newspaper clippings. I should also mention the help of Stanley Gacek, who is a prominent authority in Brazilian labor law and referred me to many important people in Brazil. I’d also like to thank Mark Payne for editing the writing and sharing many of his knowledge on politics of tax reform.
To my wife, Mila, I extend my deepest appreciation and affection for her support and patience. I am also proud of my son, Jongseok, who had great patience and understanding on many occasions in which we could not spend time together. VITA
March 8, 1957 ...... Born - Kwangju, Korea
1 9 7 9 ...... B.A., College of Education, Seoul National University
1 9 8 1 B.A., College of Social Science, Seoul National University
1 9 8 4 ...... M.A., Graduate School, Seoul National University
FIELD OF STUDY
Major Field: Political Science
Studies in: Comparative politics (Latin American politics, Democratic transition, Political Development)
Political Thought
v TABLE OF CONTENTS
DEDICATION i i
ACKNOWLEDGMENT...... iil
VITA...... v
LIST OF TABLES...... ix
LIST OF FIGURES...... x
ABBREVIATIONS x i
CHAPTER PAGE
I. INTRODUCTION...... 1
Democratic transition and labor reform...... 1 Labor reform in Brazil and the question of continuity...... 3 Dimensions of labor reform...... 6 Literature review ...... 1 0 Frame of analysis...... 1 7 Scope and method of the study...... 22 Structure of the study...... 2 5
II. A TALE OF TWO TRANSITIONS: TRANSITIONS IN THE POLITICAL REGIME AND IN THE LABOR MOVEMENT...... 27
Transition in the political regime ...... 2 8 Elite-controlled transition...... 28 Continuity in the democratic transition...... 33 Labor in transition...... 38 Political opening and mobilization of labor during 1 9 7 8 -8...... 0 38 Formation of the New Unionism...... 46 Labor movement and the transition elite...... 5 2 Conclusion: the limit of continuity ...... 54
vi III. CRISIS OF THE CORPORATIST LABOR SYSTEM AND THE STRENGTH OF THE LABOR MOVEMENT...... 58
Corporatist labor system in Brazil...... 58 Evolution of the corporatist system...... 65 Crisis of the corporatist labor s y ste m ...... 69 Strike movement...... 70 Union structure...... 74 Union ideologies...... 7 5 Collective bargaining...... 77 Factory committee...... 81 Structural source of the crisis ...... 83 Structural change of the economy...... 84 Wage squeeze ...... 88 Strength of the Brazilian labor m ovem ent...... 9 0 Distribution of the labor unions...... 91 Union density...... 93 Historical characteristics...... 94 Collective bargaining arrangement...... 98 Link with the political parties...... 1 0 0 Relative strength of the employers...... 10 0 Strength of the radical labor movement (CUT)...... 104 Conclusion: union practices, strength of labor, and the labor reform...... 109
IV. PAZZIANOTTO REFORM...... 1 1 4
Constitution of the political elite in the “New Republic”...... 11 4 State-labor relations during 1985-87...... 1 17 Strike movement...... 11 7 Government strategy toward the strike movement...... 1 21 Role of Pazzianotto...... 124 Reform of union autonomy...... 127 Failed reform of the union structure...... 1 30 Failure of the ratification of the ILO Convention 8 7...... 1 30 Failure of the Law of Union Organization...... 139 Failure of the restrictive strike bills ...... 142 Strike laws under the authoritarian regime...... 142 Draft bill of 1985 ...... 144 Draft bill of 1986 ...... 147 Draft bill of 1987 ...... 149 Explaining success and failure of the Pazzianotto reform...... 1 50 Success in the reform of union autonomy...... 1 50 Failure of the reform of the union stru ctu re...... 1 52 Failure of the strike law ...... 1 56 Conclusion...... 159
vii V. LABOR REFORM THROUGH THE NEW CONSTITUTION...... 163
New composition of the political elite...... 1 64 Formation of blocs and fragmentation of the party lines...... 1 68 Works in the Subcommittee and Committee...... 1 71 Voting in the Systematization Committee...... 1 77 Mobilization of the Centr3o...... 1 80 Labor issues in the plenary session: the first round...... 1 83 Benefits for workers...... 1 83 The right to strike ...... 1 89 Union S tru ctu re...... 1 91 Voting behavior of the parties...... 1 94 Labor issues in the second round...... 196 Explaining the success and failure of the labor reform in the CA...... 2 0 0 Benefits for workers...... 2 0 0 The right to strike ...... 202 Union structure...... 204 Conclusion...... 20 7
VI. STRIKE LAW OF 1 9 8 9 ...... 213
Intense mobilization of the working class in early 1989...... 21 3 Medida Provisoria 5 0...... 216 Government response to the strike movement ...... 21 6 Contents of the MP 50...... 21 8 Labor and business responses...... 221 Success of the substitute bill ...... 224 Response of the Congress to MP 50 ...... 224 Substitute bill of Ronan Tito...... 225 Approval of the new strike law ...... 2 28 Explaining the failure of MP 5 0 /5 9 and the success of the substitute bill 232 Demise of MP 50/59 ...... 232 Success of the substitute bill ...... 235 Conclusion...... 2 3 9
VII. CONCLUSION...... 24 0
Possibilities and the success of the labor reform...... 2 4 0 Limits of the labor reform ...... 245 Comparative implications of the Brazilian labor reform...... 2 4 8
BIBLIOGRAPHY...... 252
viii LIST OF TABLES
TABLE PAGE
1. Five principles of Brazilian corporatist labor system...... 64
2. Number of strikes in urban areas (1978-87) ...... 71
3. Number of lost hours by sectors in urban areas (1 9 7 8 -8 7 )...... 72
4. Proportion of the public and private sectors in the number of strikes and lost hours in urban areas (1978-87) ...... 73
5. Portion of GDP and EAP by the economic sector (1950-90)...... 85
6. Annual rate of increase of industrial production(1962-80)...... 87
7. Index of real minimum w a g e s...... 89
8. Major reasons of the strikes (urban a re a s) ...... 89
9. Inflation rate (1 9 7 7 -8 9 ) ...... 89
10. Distribution of unions by the type (1987-88) ...... 92
11. Distribution of labor unions by region and economic sector...... 92
12. Unionization by economic sector...... 94
1 3. Percentage of union tax in total revenue (1988)...... 98
14. Proportion of the CUT by region and economic sector...... 105
1 5. Strength of the CUT (1990)...... 1 09
16. Pazzianotto Reform: cleavage lines...... 151
1 7. Factors that affected the Pazzianotto reform...... 1 60
1 8. Party and regional representation of the Congress elected in 1986...... 1 65 Social background of the members of the CA ...... 166
Distribution of political orientations among the members of the CA...... 166
Profile of party genealogies of the members of the PMDB...... 1 69
Public hearings in the Subcom m ittee of Workers Rights and the Committee of the Social Order...... 1 74
Voting in the Systematization Committee on the workers’ right...... 178
Views on the right to strike among the members of the CA...... 1 90
Views on the right to strike among the population of the major cities...... 1 90
Views on union organization among the members of the CA...... 193
Views on union organization among the population of the major cities...... 193
Voting behavior on the workers’ rights in the first round...... 195
Number of strikes during the first six months of 1989...... 215
Comparison of the MP 50 and the old strike laws...... ,220
Comparison of MP 50/59 with the substitute bill of Ronan Tito...... 2 3 0
Distribution of political orientation among the members of the congress in the voting of strike bill...... 231
Factors that affected the failure of MP 50/59 and the success of the substitute bill...... 2 3 8
x LIST OF FIGURES
FIGURES PAGE
1. Frame of Analysis...... 1 9
2. Brazilian Corporatist Labor S y stem...... 6 0
x i ABBREVIATIONS
A I-5 Ato Institucional No. 5; Institutional Act No.5
ANFAVEA Associag3o Nacional dos Fabricantes de Veiculos Automotores; National Association of Vehicle Production
ARENA Alianga de Renovagao Nacional; Alliance for National Renovation
BNH Banco Nacional de Habitagao; National Housing Bank
CA Constituent Assembly
OGT Central Geral dos Trabalhadores: General Workers Organization (1986) Confederagao Geral dos Trabalhadores; General Workers’ Confederation (changed the name from Central Geral dos Trabalhadores in September 1 9 8 8 )
CLT Consolidagao das Leis do Trabalho; Consolidation of Labor Laws
CNI Confederagao Nacional da Industria; National Confederation of Industry
CNTI Confederagao Nacional dos Trabalhadores na Industria; National Confederation of Industrial Workers
CONCLAT Conferencia das Classes Trabalhadores; Conference of the Working Class ( 1 9 8 1 ) Coordenagao das Classes Trabalhadores: Coordination of the Working Class (1 9 8 3 - 8 6 )
CONTEC Confederagao Nacional dos Trabalhadores em Empresa de Cr6dito; National Confederation of Workers in the Credit Establishment
CSC Corrente Sindical Classista; Class Union Current
CUT Central Unica dos Trabalhadores; Sole Workers Organization
DIEESE Departamento Intersindical de Estatistica e Estudos S6cio-Economicos; Interunion Department of Statistics and Socio-Economic Studies
DIAP Departamento Intersindical de Assessoria Parlamentar; Interunion Departm ent of the Parliamentary Council FGTS Fundo de Garantia por Tempo de Servi^o; Time-in-Service Guarantee Fund
FIESP Federa^So das Industrias do Estado de S3o Paulo; Federation of Industries in the state of S3o Paulo
MDB Movimento Democratico Brasileiro; Brazilian Democratic Movement
M P Medida Provisoria; Provisionary Measure
M R - 8 Movimento Revolucionario 8 de outubro; October 8 Revolutionary Movement
PC do B Partido Comunista do Brasil; Communist Party of Brazil (Maoist)
PCB Partido Comunista Brasileiro; Brazilian Communist Party
PDS Partido Democratico Social; Social Democratic Party
PDT Partido Democratico Trabalhista; Democratic Labor Party
PFL Partido da Frente Liberal; Party of the Liberal Front
PMDB Partido do Movimento Democratico Brasileiro; Party of the Brazilian Democratic Movement
P P Partido Popular; Popular Party
PSD Partido Social Democratico; Social Democracy Party
PSDB Partido da Social Democracia Brasileira; Brazilian Social Democratic Party
PT Partido dos Trabalhadores; Workers’ Party
PTB Partido Trabalhista Brasileiro; Brazilian Labor Party
SNI Servigo Nacional de lnformag§o; National Intelligence Service
USI Uniao Sindical Independente; Independent Union League CHAPTER I
INTRODUCTION
DEMOCRATIC TRANSITION AND LABOR REFORM
The labor reform in a new democracy reflects both political and social changes.
Democratization involves both the restoration of the citizen rights and the reinstatement
of electoral politics. The amplified political space and enhanced sense of freedom and
autonomy which comes with political liberalization stimulates labor organizations to be
more active or, possibly, aggressive in terms of interest articulation and the organization of collective action. This expanded activism of civil organizations accompanying democratization was characterized by O’Donnell and Schmitter as “civil resurrection” (1986:48-56). Taking advantage of the greater receptivity and responsiveness of political society with regard to the demands of the civil society, the labor movement develops its own organizations and strategies, and expands its resources and members.
In countries which experienced heavy repression of labor under authoritarianism, one of the greatest challenges of the new democracy is to find a way to control the explosion of the pent up demands of the working class. Mobilization of the working class and organized labor has been one of the major sources of concern for the consolidation of the new democracy due to its strategic position in economy and sheer size of the workers among the population (Valenzuela 1 989).
1 2 Recovery of labor rights constitutes in itself an important element of
democratization. Moreover, establishment of consensual relations between capital and
labor is important to control the eruption of social conflicts which could affect the
legitimacy and efficiency of the democratic regime. Establishment of fair rules of the
game between capital and labor is essential to social peace. The restructuring of state-
labor and capital-labor relations makes labor reform one of the fundamental tasks of the
new government.
The ruling elites of the new democracy need to demonstrate that they are different
from the old regime regardless of the role of organized labor during the transition. The
recovery of full citizen rights including the liberty and autonomy of labor organizations
comes to be a moral exigency of the new democracy. At the same time, the potential of
labor mobilization during the early days of the new democracy, in which new rules need
to be defined and boundary of political action by the newly emerging groups need to be
explored with caution, causes significant concern for the political elite of the new
democracy. The focal point comes down to be the control of the excessive mobilization.
Excessive mobilization causes strong reactions from both the business circle and the conservative political elites, including the military. The efficiency of the democracy can
be damaged and the sense of crisis threatens not only the future of the democracy but also the political power of the ruling groups.
In this context, the demand of labor reform, allowing the workers to articulate and organize their demands on the basis of liberty and autonomy, has a substantial political dimension that necessitates conflicts and bargaining in the political process. This is even more the case when organized labor is on the opposition side in the new government. The democratization of the labor system is not simply a matter of a demand of the formerly repressed labor but also constitutes itself a crucial agenda of the new democracy. This inherent conflict between citizen rights and the political exigency of reasonable 3 containment of labor mobilization becomes even more acute if the economy is not in good shape. Deficient financial resources inhibits the absorption of demands by expanding welfare services. Inflation threatens the real income of workers and the huge foreign debt exacerbates the difficulties of controlling labor mobilization.
While some degree of liberalization in the labor control mechanism of the authoritarian regime can be taken for granted with democratization, the direction, scope, and the degree of labor reform are subject to serious controversies among government officials, politicians, labor and business leaders. Given the uncertain rules of the game on this matter, the process of formulating the new labor system becomes highly politicized. For the politicians the question is how much control and leeway should be given to the new social force given the criteria of governing. For the workers and employers, the power relations between capital and labor are at stake.
This study tries to contribute to the better understanding of the dynamics of labor reform by examining the following questions in the Brazilian case which can be put in the m ost general terms as the following. What factors affect the final output of the labor reform? What explains the success or failure of the labor reform? What are the possibilities and limits of labor reform in a given country under the various combinations of variables that affect the labor reform? Flow do these factors affect the political process of labor reform?
LABOR REFORM IN BRAZIL AND THE QUESTION OF CONTINUITY
The Brazilian transition and labor reform provide interesting and significant perspectives to the questions raised above in general terms. The Brazilian transition has been characterized as a transition through transaction, controlled transition from above, and elite-led transition (Share and Mainwaring 1986; Viola and Mainwaring 1985, Hagopian 1990). The central argument around the Brazilian transition type was the continuities between the authoritarian and democratic regime. These continuities include the continued presence of authoritarian political elites at the core of the new regime, unabated role of the military, blocked channels of representation of the popular sectors, the weakness of the political parties, and clientelistic political practices. (Alves 1988;
Fleischer 1990; Mainwaring 1988; Mainwaring 1990; O’Donnell 1988; Stepan
1 9 8 8 ).
All of these characteristics would lead us to expect that the government would easily be able to manipulate the reform process and that the labor reform would be timid. We would expect that the labor movement would have little ability to define labor relations in the new regime. At least the literature on the democratic transition in Brazil suggests this line of thinking. For example, the new Constituent Assembly heavily represented capitalist interests. Out of 559 members 211 were capitalists (owners)(Fleischer
1990:240). At the same time, Brazilian labor is known for its weakness, with low union density (about 14%) and with divisions between radical and moderate unions
(Payne 1991). Labor did not have a strong voice in the transition coalition (Mainwaring
1986) and leftist political parties have been weak in the Congress.
But contrary to this seemingly natural expectation, labor in Brazil achieved substantial success in achieving their autonomy, right to strike and many benefits during the Sarney government of 1985-89 period. State intervention in the management and election of unions disappeared since the beginning of the new government in 1985. The constitution of 1988 guaranteed the autonomy and freedom of union organization, unlimited right to strike for all workers, unionization of public employees formerly banned from organizing, and a series of benefits such as a reduction of working hours and an increase of payment for overtime. How and why did the new regime, with such a strong presence of old political elites,
allow greater autonomy for labor, thus encouraging the greater labor mobilization and the erosion of effectiveness of the new government, especially since this was against the
wishes of the military and the business elite?^
One of the fundamental points this study makes is that the continuity thesis overlooks
the important role the defiant new unionism had played in defining a labor system by dismantling the corporatist labor control mechanism of the authoritarian regime. The
continuity thesis postulates the continued strength of the authoritarian political elite
and old clientelistic political practices. As an overall characterization of the political
process and power relations in a new regime, this observation seems to be valid and
persuasive, especially in light of the failure of the agrarian reform. However, it is not
adequate to understand the dynamics of the politics of labor reform. It is deficient in dealing with the role played by the defiant working class movement in setting the
parameters of the labor reform to which even the conservative political forces had to
adapt themselves. Brazilian labor emerged as an independent, significant, and legitimate
political actor during the transition period (Swavely, 1990:278). Without recognizing the role of labor mobilization (the emergence of a combative new unionism and strike
movement) in dismantling the corporatist labor control mechanism during the transition years, and thereby in shaping the parameters of the labor reform in the new
democracy, the dynamics of the labor reform politics cannot be properly understood.
However, this study aims to accomplish more than to simply criticize the continuity
thesis in the area of labor reform. It also tries to examine the factors that affect the
1 For example, one leading business association (CNI: National Confederation of the Industry) demanded the ban on the strikes in “essential” sectors, the ban of the factory committees, and the intervention of the state in the unions responsible for illegal strikes (Diniz 1988:16). All these demands were denied in the later labor reform. labor reform process in a transitional democracy where conservative forces are dominant in political society and labor power is considered relatively weak. One interesting point about the Brazilian labor reform is the fact that some traces of the corporatist labor control mechanism (single union principle and union tax) still remain in force, not because the government tried to preserve the old mechanism, but because the conservative forces within the labor movement and the business circle wanted to maintain the old system in their favor. The government tried repeatedly but failed to abolish these traces of corporatism and to install pluralism in the union movement.
This suggests that factors that affect the process of labor reform are far more complicated than the narrow view focusing on the confrontation or compromise between mobilized labor and the conservative government.
Thus, the purpose of this study is to understand the possibilities and limits of the labor reform in the conservative transition and to grasp the dynamics of the political process of labor reform by examining three major dimensions of the labor reform: union structure, right to strike, and worker benefits. Special attention will be given to two major questions: 1) how was it possible for the presumably weak labor movement to achieve autonomy from the state, ample right to strike, and substantial benefits for workers, while the old conservative elites were still a major force within the government and the Congress? 2) why did the government try but fail to dismantle the corporatist shell?
These questions can be examined adequately only when we take into consideration the historical process of the emergence of combative “new unionism" since 1978 and the impact of political liberalization and the democratic transition, the power configuration at the time of reform, political strategy, public pressure and lobbies of the politicians, labor and business. DIMENSIONS OF LABOR REFORM
Labor reform involves several distinct dimensions. Especially in a historical
conjuncture of democratization in which a repressed labor movement came up with all
kinds of demands, reform is not a single issue but involves multiple dimensions: structure, pressure, and benefits.
The structural dimension involves the reform in state-labor relations and the union structure. Since the populist regime of Getulio Vargas in the 1930s Brazilian labor was structurally restricted in the assertion of its interests, losing the characteristic of a class organization. It was meant to work as a part of the state apparatus to maintain social peace and harmony of interests. This design affected the structure of labor movement itself. Union pluralism was replaced by the single union principle which allowed only one union in each base territory and in each economic and professional category. Union finance was guaranteed by the state through the union tax. Unions were given a privileged position in representing workers but their independent role had been restricted by state control of union finance and management. This corporatist labor system had been maintained and fortified during the authoritarian regime after the 1964 coup. Thus one of the principal demands of the labor movement during the transition was the liberty and autonomy for labor unions. Labor had been united in opposing government intervention in the unions (in elections, finances, internal rule), while it was divided by the question of union pluralism. Radical tendencies of the labor movem ent preferred rank and file activism and tried to dismantle the official union structure. The moderate tendencies of the union movement favored maintaining the single union principle in the name of labor movement unity. The question of union structure 8 was one of the principal topics of public debate during the Sarney government due to
government efforts to replace the existing corporatist system with the pluralist system.
The pressure dimension refers to the right to strike in terms of both the sectors in
which striking is allowed and the procedures and conditions that striking unions and
workers have to fulfill. The government and business wanted to limit the range of
sectors, to put more conditions on the procedures leading to legal declaration of the
strike, and to impose more severe punishment in the case of abuses of the right to strike.
Labor tried to eliminate sectoral limitations on striking and to minimize the strike
procedures. During the authoritarian regime, the procedures that legalize the strike,
such as the minimum quorum to declare the strike, advanced notice to the employers,
prohibition of the strikes in the public and ‘essential’ sectors made it almost impossible
to exert labor power through collective action. Since the labor mobilization of 1978,
(illegal) strike was the only weapon that was left for labor to express their discontent.
Despite its illegality and state repression, increases in the frequency of strikes
practically made obsolete the corporatist legal norms. A general strike was attempted
during the transition and with the democratization of 1985 the frequency of strike
action was accelerating. The regulation of the labor movement capacity to launch strikes emerged as one of the most important issues of the new government.
The benefit dimension pertains to the immediate benefits for workers through the improvement of working conditions, increased material rewards, and the right to due process of grievance resolutions. This dimension includes job security, reduction of working hours, more pay for extra hours, extension of the period during which workers can demand compensation for injuries, the setting of the minimum wage, etc. Due to the wage squeeze policy of the authoritarian regime, the real income of workers has been steadily reduced. The leftists and the progressives tried and succeeded to guarantee many 9 of the demands of labor through the constitution. The victory in the Constituent Assembly
was not sweeping but obviously was more than the leftists expected.
These three dimensions have different implications for the political actors. On the
part of the government the choice between discarding or maintaining the corporatist
mechanism depended on the efficiency of the existing corporatist mechanism to control
the challenge of labor mobilization. When the government decided that the corporatist
mechanism was no longer efficient, it attempted to install pluralist control mechanism
that allows the competition among rival union groups. Through this means government
hoped to weaken the labor movement.
In regard to the unions, the union structure is directly related to the political
prospect of the union movement they represent. While all the labor groups support
autonomy from state intervention, the issue of union structure can have different
connotations depending on the strategy and motivation of the union movement. In the case
of Brazil radical labor groups supported the pluralist union structure hoping to conquer
more unions by gaining the support of the rank and file. Conservative and moderate labor
groups opted for the maintenance of the single union principle in order to hinder the
emergence of strong rival groups. In this case it is hard to mobilize the workers to
pressure the political elite for the choice of one or the other. It does not involve direct
and immediate advantage or disadvantage to the workers. It is more about the competition
among the rival tendencies of the labor movement. The political elites are more
interested in the political impact of the overall orientation of the labor movement that
would result from the choice between the two options. As a strategy of labor, lobbying
plays an important role rather than public demonstrations or strikes.
On the pressure dimension, the labor movement has the common interest in ensuring
their right to use collective action as a means to pressure the employers or the government. In this case, the cleavage line is formed between business and labor, and 10 among the political elites that support or oppose the ample right to strike. The
conservative elite always wanted to suppress the mobilizational capability of labor
through restriction of the right to strike, while the leftists and the progressives support
the ample right to strike. In the case of Brazil the best means of pressure to amplify the
right to strike has been the strike itself regardless of its legality. The strategy was to
make all the legal provisions obsolete. This strategy has worked due to the lack of
tradition of direct negotiation and the adverse economic situation for the workers in
general. However, this could change if public opinion does not favor the explosion of
strikes and resulting inconveniences, especially in public transportation, schools, and
the hospitals. Fears of political instability and mounting public discontents toward the
strikes can hinder the support for the ample right to strike by the less committed
members of the progressive political force, let alone the centrist politicians.
In the case of the benefit dimension, the benefits to workers are felt by the workers
immediately and directly. Since the support of the rank and file is crucial to the union
leaders, union leaders tend to unite around the best options for the workers, though
there might be different degrees of support depending on the sectors and ideological
orientations of the movement. It is easy to mobilize workers on these issues.
Constituents (workers, employers) organize at the base level to manifest their
preference. Politicians are sensitive to the response of the electorate and mindful of
their vote to win the next election.
Labor reform has thus diverse dimensions and each dimension has different connotations for the strategy of actors (negotiation, confrontation), means of pressure
(lobbying, mobilization), and the structure of cleavages (among the union leaders,
between labor and business, politicians and the electorate). 11 LITERATURE REVIEW
Studies on labor reform in a newly democratized countries are rare. Many analyses
focus on the change in the labor movement and labor laws and the description of the
overall state-labor relations2. Few deal with the political process of reform. Theoretical
treatment of the labor reform is hard to find. However, there are some studies which
provide insights for the present study. I will briefly review the major argument of each
literature.
The literature on democratic transitions has not shown keen interest in the
possibilities and limits of reform after the transition process in general. The
implications of the different types of transition on the reform is considered mainly to
relate to the power distribution during the transition. Karl (1990) attempted to outline
the types of democracy that would follow specific types of transitions. She provides four
types of transitions depending on the elite/mass ascendancy and strategy of transition
(compromise and force): pact, imposition, reform, revolution. The only reference to the
reform is th at transition by imposition, which characterizes the Brazilian case
according to her, yields conservative democracies and is unlikely to address the issue of equity.
Viola and Mainwaring (1985) argue that transition controlled from above is characterized by a significant level of continuity in elite composition and in policy orientation. They emphasize that the decision making process remained technocratic, bureaucratic, authoritarian, closed and clientelistic during the last phase of the transition in Brazil. Though their argument is not related to reform after the transition, the implication of their analysis is that controlled transition has little chance of
2 For example, see the articles in Epstein (1989) and Keck (1989). 1 2 significant labor reform due to the continued strength of conservatives and the inertia of
the policy orientation. On the other hand, Share and Mainwaring (1986) foresee that
“transition after regime collapse” would involve significant institutional change and
rupture in patterns of political authority. They do not relate this rupture in the
institutional arrangement to the question and the extent of reform after the transition.
The inference is that there is a greater possibility of reform for the rupture type of
transition. However, they are quite cautious about the effect of continuity through the
elite control after the transition. New political forces are introduced by new elections
based on the enhanced aspirations of the population. In addition, uncertain rules of the
game might bring about unexpected change.
Researchers on the social movements, including labor movement, have pursued two
distinctive line of thoughts to explain the success or failure of the various social
movements. One line of thought has focused on the group resources of the social
movement organization such as financial, organizational, mobilizational, and symbolic resources.3 Another line of thought has focused on the “political opportunity structure”. The resource mobilization approach focuses on the resources within the group that can be mobilized to reach the goal of the m ovem ent while the political opportunity structure approach looks to the outside environment.
In the case of labor movement, Valenzuela employs the typical resource mobilization approach when he mentions the strength of the labor movement as one of the factors that affect labor mobilization. He argues that the stronger the labor movement is, the more pressure the labor movement can exert on the new regime. Strong labor movement has a
3 For a brief introduction to the resource mobilization approach see Ralph H. Turner, “Collective Behavior and Resource Mobilization as Approaches to Social Movements: Issues and Continuities,” in Research in Social Movements, Conflict, and Change. V.4:1- 24 1 3 greater chances of participating in the top level negotiations or pact, more
responsiveness from the rank and file, and a greater chance of changing the labor
relations system (Valenzuela, 1989:452). Strength here is defined by union density,
organizational capability, financial resources, link with political parties, and division
in the labor movement.
The other group of scholars who have focused on social movements argue that changes
in the “political opportunity structure” are instrumental in the development and
success of the social movements, including labor movement. The impact of crisis,
disruption, and mobilization can successfully contribute to the success of the movement
when political elites are induced to respond positively. The movement itself is a
challenge to the existing power structure, and as a result, it tends to lack resources to
further their cause within the existing system and is subject to a severe risk of
repression. Support of political elites is crucial to the movement that lacks sufficient
channels to existing political institutions (Piven and Cloward 1977).
The enhanced possibility of elite support is conceptualized as a “political
opportunity structure” which include at least three dimensions4: electoral realignment
(Piven and Cloward 1977) and political instability (McAdam 1982); the opening of
institutional access (Eisinger 1973); the presence of influential allies (Jenkins and
Perrow 1977) and divisions within the elite (Tarrow 1989).
The major arguments of these scholars are as follows: 1) Political elites are far less
free either to ignore disturbances or to simply repress the protest, when political or electoral stability is threatened by the disruptions caused by the protest movement. In
order to maintain their support base, political elites either concede to or coopt the
4 I adopt these variables from Tarrow (1989). For a general introduction of the “political opportunity structure” and for more literature, see Tarrow (1989). 1 4 protest movement (Piven and Cloward 1977). 2) A generalized political instability
encourages collective action by all groups sufficiently organized to contest the
structuring of a new political order, which results in an improved bargaining position
for the challenging group. In this situation the political elite faces rising costs of
repression, which implies a greater possibility of success on the part of challenging
groups (McAdam 1982:42). 3) Policy response to protest movement is affected by the
openness or closure of formal institutions. Eisinger (1977) found that protest in the
1960s in American cities occurred more frequently in cities with open and mixture of
open and closed system s. 4) Jenkins and Perrow (1977) found that the changed political
environment in the form of a more neutral federal government and a coalition of liberal
support organizations was crucial in the success of the protest movement of the United
Farm Workers. “The formula for success is a combination of sustained outside support
and disunity and/or tolerance on the part of political elites" (Jenkins and Perrow
1 9 7 7 :2 5 1 ).
Wozniak (1991) combined the political opportunity structure and internal resource
mobilization of factory councils to explain the success of the steel and shipbuilding
workers of Spain in their protest over the modernization program . If a government has
a very stable electoral alignment (stable source of support) without the need for social
pacts and concertation, the political institutions and processes tend to be closed. Then the
government does not need to accommodate the potentially disruptive protest movement
nor allow a part of the internal group to represent the interest of the protest groups. In
this respect the unstable and weak governing coalition of the UCD provided more
opportunities for the unions while the more stable government of PSOE did not portend well for the working class in Spain. At the same time workers in this sector have been well organized and demonstrated internal solidarity. Wozniak’s study provides a good case that the success or failure of reform can be explained by the existing political 1 5 structure and the capability of the labor unions rather than by the type of democratic
transition.
Thus, social movement literature on political opportunity structure and resource
mobilization seems to provide a better perspective on the issue of success/failure of
protest movements than the literature on democratic transition. But this does not
necessarily mean that types of democratic transition can be ignored in explaining the success/failure of the reform in a new regime. Democratization itself brings about a new political opportunity structure by vitalizing electoral politics, opening extra access to the political elite, and bringing in new political elites in the government and Congress.
Enhanced political space and erosion of the labor control mechanism encourages the development of labor resources. Different transition types bring about different degrees of political space for the development of labor resources and a different composition of political elites th at may or may not favor labor reform. While the transition literature has at most been suggestive on the possibility/limit of reform implied in each type of transition and does not provide any good indicators to apply in any systematic manner, the composition of political elites and the degree of liberalization, which can be distinctive depending on the transition type, could affect the political opportunity structure and the degree of development of labor resources. This suggests that labor reform politics can be better understood by combining the perspectives of both the transition literature and the social movement literature.
Finally the literature on reform in western democratic countries also provides some insights. Some analysts argue that crisis combined with a landslide victory can provide the opportunity for reform (Tarrow 1993; Keeler 1993). Keeler (1993) argues that landslide victory in the election authorizes the political elite to pursue policy innovation and empowers the majority party for successful reform in the Congress. He also argues that crisis also provides the opportunity for policy reform. Crisis serves to break old 1 6 patterns of thoughts and behaviors, to override the caution and concern for the
procedure in fear that inaction would exacerbate the problems, and to rush to the policy reform due to the fear of unusual degree of social mobilization. In the Brazilian case, despite the large victory by transition elites in the presidential election and national election in 1986 which doubled as the Constituent Assembly, the electoral mandate mechanism does not seem to have worked out due to the ideological and political heterogeneity of the ruling coalition. The ruling coalition, the Democratic Alliance, comprised both the conservatives and the progressives of all kinds and suffered internal conflicts.
Crisis, however, can play a different role in the transition setting. It might serve to strengthen anti-reform forces. O’Donnell and Schmitter (1986) argue that excessive mobilization might cause backlash in the democratization process by strengthening the position of hardliners. Valenzuela (1989) also argues that excessive mobilization facilitates the weakening of the legitimacy and effectiveness of the new democracy, thus enhancing the position of the anti-democratic forces. These apparently opposing positions on the role of crisis is not necessarily contradictory. If the crisis means excessive mobilization, it plays a two edged sword. It can prod the ruling elite to prepare for the break-through in policy orientation or can encourage conservatives to control mobilization through the repressive measures. The chances are that the progressives argue for reform while the conservatives argue for more disciplinary measures. The result of this conflict depends on the composition of the political elite and external circumstances. However, if the crisis overwhelms even the conservatives, there is a possibility that conservatives come out with their own reform ideas which reflect their own interests. Whatever the process of crisis resolution, the crisis works as a trigger to the reform but does not in itself determine the political process of reform except that the combination of crisis and strong mandate tend to result in reforms. 1 7 Pontusson (1993) focuses on the nature of the issue of reform on the success/failure of the reform. He suggests three basic elements that have to do with the goals and institutional designs of the reform as he examines the conditions that affect the success of labor-initiated reforms in Sweden: 1) the extent to which it accommodates the systemic interests of capital; 2) the extent to which it appeals to the material interests of swing voters 3) the extent to which it embodies a simple and universalistic conception of justice. The systemic interests of capital is here used to refer to the long-term interests of the owners of capital. They seek to create or maintain institutional arrangements that enable them to pursue profits, and to dispose of their wealth as they see fit. Their systemic interests pivot on ownership and autonomy of private investment decisions vis-a-vis political representatives of wage-earner interests. “Swing voters” are voters or voting blocs whose political allegiance is directly affected by the particular reform initiative in question. They are voters without strong ideological or organizational ties to either the socialist or the bourgeois parties. In conclusion, he argues that labor-initiated reforms, in order to be successful, must be conceived and presented in ways that they do not threaten the systematic interests of capital, appeal to the swing voters, and resort to broadly shared notions of social justice.
The strength of Pontusson’s argument lies in recognizing the importance of the issue itself. Not only the external political situation (crisis and mandate, political opportunity structure) and group resources but also the scope of the reform can affect the process of reform by affecting the behavior of the swing voters, the resistance level of capitalists, and the support level of the general public based on universal moral appeal. 1 8 FRAME OF ANALYSIS
This study analyzes the politics of labor reform in two levels: 1) the structural
environment that binds the choices of labor reform; 2) political interactions at the time
of labor reform. The structural environment consists of two parallel processes: 1) the
process of disintegration of the corporatist labor control mechanism which is the result
of the emergence of combative “new unionism” and the mobilization of the working class
since 1978, which reflect the changed structure of the Brazilian economy; 2) the
process of democratic transition which affects the composition of political elite and the
overall power relations in the new democracy.
At the micro level, the political interactions among the political elites, labor and
business are analyzed. The three main foci of analysis involve 1) the political
opportunity structure (the stability of the ruling coalition, opening of the decision
making process, the availability of political alliances); 2) mobilization of group
resources through the use of public pressure, lobbies, unity/disunity, ideologies,
strategies, and interests of the involved actors; 3) the nature of the issues (issues that
touch upon the systematic interests of capitalists, issues that encourage the centrists to
support the reform, and the universal moral or theoretical appeal). Figure 1 represents
the frame of analysis of this study.
The literature reviewed above touches upon various aspects of the reform process
and the frame of analysis of this study reflects them. On the structural level, two major
transitions occurred: the regime change and the emergence of the combative “new
unionism”. The democratic transition in Brazil resulted in the strong presence of conservative political elites. Though the first elected president came from the opposition, many authoritarian elites participated in the new government through the ruling coalition. The ruling coalition consisted of the PFL and PMDB. The PFL was made of a dissident group of the PDS (government party under the authoritarian regime) which split at the last moment of the transition. Though the PMDB was the opposition party which had fought against the authoritarian regime, it also included many conservatives who changed their party label just to be elected. Moreover, the military got the assurance that their privileges would not be challenged in the new regime. The military has been active in participating in decisions on many sensitive
Disintegration of the authoritarian regime
Social change Political change
Elite-controlled Labor mobilization democratic transition
Overall power relations in the 1. Strength of labor movment political society (convservatives 2. Crisis in the corporatist at the core of political power in a labor control mechanism new regime)
Political elite
stability of ruling coalition, political alliance, openness of policy making process
Labor Business
unity/disunity business resistence public pressure, lobby, protests
Figure 1: Frame of analysis 20 issues including the strikes. The overall power relations were not favourable to the
sweeping labor reform. Despite other factors that affect the reform process, the
presence of authoritarian elements at the core of power in the new democracy constituted
a lasting structural force in reform politics during the Sarney government. It was the
force the progressive reformers had to take into consideration in order for their efforts
not to backfire.
In dealing with labor reform in the Brazilian setting, where the long tradition of the corporatist labor system has established some degree of legitimacy and efficiency, the explanation of the success and failure of the reform needs to take into account the performance of the corporatist system and the degree of opposition to the system. The crisis of the corporatist system, which has been manifested by the increasing revolt of the workers, led to the recognition by the government and the liberal wing of the employers that the corporatist mechanism is too old to fit the new realities of the
Brazilian labor relations. The combative “new unionism” did not eliminate the official union structure and the submissive union leaders. However, the new union movement emerged as the most representative. Two major groups of the new unionism established their legitimacy during the last stage of the authoritarianism. The new democratic government had to recognize their influence and accept them as legitimate interlocutors.
Moreover, the conquests made by the “new unionism” under authoritarianism and the failure of the corporatist mechanism to control labor mobilization set the tone and direction of the reform.
In this respect the strength of the defiant labor movement to challenge the existing system was crucial in setting the reform agenda. The strength of the labor movement is constituted by the resources available to the labor movement to exert their power and influence. Major indicators of the resources of the labor movement, which play an important role in determining capacity for mobilization, are provided by Valenzuela 21 (1989): union density, major unions’ strategic position in the economy, historical
characteristics of the labor movement (collective bargaining, the role of the state,
division of labor), relations with the political party.
At the micro level of political interaction th at affects reform politics, the “political
opportunity structure” determines the elite response to the pressure exerted by labor
and business. The theory of “political opportunity structure” suggests that the
composition of the political elite, electoral strength of the ruling elite, and the openness
of the channels of the political elite to the labor m ovem ent could play an important role.
Political elites in the unstable ruling coalition are sensitive to the electoral implications
of the mobilization of the workers. They need to attend to the discontents and protest of
the workers who constitute the majority of the population. Existence of allies within the
ruling coalition means that the demand of labor can be not only heard and attended to but
also can be actively represented by those allies. Open channels within the political
institution would signify that the government would be more likely to take into consideration labor demands and would demonstrate more responsiveness. All these factors work favorably to the satisfaction of labor demands. If the ruling coalition is more stable, if political alliances are not available, and if the communication channels are blocked, the political elites would direct their own policy orientation which is less likely to be advantageous to the reform of the authoritarian labor system.
However, the response of the political elite would be affected by the demonstration of force by labor and business. Mobilization of group resources of labor and business will be crucial in providing the direction of the reform. Centrists, especially, (“swing votes” in the concept of Pontusson) will be more easily affected by the lobbies and the public pressure than the committed conservatives and the progressives. The unity/disunity of labor and business play a crucial role. Differences in ideologies and strategies within the labor unions between the radicals and the moderates would be an 22 obstacle to attaining the united pressure on the political elites and business. Resources
are divided and the immediate need for reform is reduced. These differences would be
suppressed if the issue of reform is conceived to be in the common interest of the
working class. The same applies to business. If the issue at stake is conceived to be
related to fundamental principles of the capitalist system such as property rights,
private ownership, and freedom of investment then all of business will be mobilized. The concerted resistance of business would be damaging to any labor reform attempt in a capitalist society.
Finally, the nature of the issues also affects the success and failure of the reform. If the reform measures are not clear in their impact and are not appealing in moral terms, uncertainties and suspicion would dominate the public debate. The support of centrists will not be easily attained if the reform issue is controversial in theoretical and moral terms. Political elites might simply postpone the decision until the right circumstances arrive. Public opinion may play an important role in guiding the swing voters. If the issue is not conceived as serving the interests of the whole working class and if there is a conflict between the radicals and moderates in the labor movement, conservatives would likely to play on this split and the reform is likely to be thwarted.
SCOPE AND METHOD OF THE STUDY
This study focuses on two periods: 1) the 1978-85 period in which the authoritarian regime accelerated its liberalization project and the combative “new unionism” emerged as the leading force of the Brazilian labor movement 2) 1985-89 period during which the Sarney government tried but failed to install a pluralist labor system and a more strict strike law, one the one hand, and the Constituent Assembly
(CA) of 1987-88, on the other hand, established an unlimited right to strike and 23 numerous benefits for workers while reconfirming corporatist principles of union
organization.
The 1978-85 period deals with the historical conditions that constitute the
structural environment of the labor reform. The main focus is given to the process of the
development of the “new unionism” after the 1978 mobilization, the crisis of the
corporatist labor system, and the examination of the strength of the Brazilian labor
movement. During the Sarney government (1985-89) three distinctive moments of
reform are examined: 1) a series of reform initiated by the Labor Minister Pazzianotto
during 1985-87; 2) Constitutional reform during 1987-88; 3) the reform of strike
law in 1989.
These three mom ents are distinctive in term s of the political institutions th at
initiated the labor reform and the patterns of interactions among the actors .
Pazzianotto’s reform was attempted in a period in which the uncertainty of the new
political game was dominant and the strike m ovem ent was increasing while the old
authoritarian constitution and labor laws were still in effect. The major interactions
took place between the government and labor and business organizations. During the CA,
the interaction took place between the members of the CA and the labor and business
organizations. The government had little or no influence on the process of labor reform
through the constitution. A series of stages (subcommittee, committee, plenary) over the period of one and a half year were characterized by bloc politics among the
congressional groups with similar political orientations and by the active lobbying and
protests of the labor and business organizations. The strike law of 1989 was made at a time in which the bank strikes were conceived to be a serious threat to the governability of the country by the military and the major political parties. While the military was a key actor in initiating the emergency provisional measure, the actual process of making the strike law was left to the Congress. 24 The part that deals with the structural and political environment of the labor reform
was based on the reinterpretation of existing studies on democratic transition and the
development of the labor movement. The study on reform during the Sarney government
was made through the reconstruction of the reform process mostly through the accounts
of major Brazilian newspapers. Since labor conflicts and labor issues have been one of
the fundamental questions of the new regime, the newspaper accounts are quite rich in
details of the political process and responses of the labor and business organizations and
leaders. Lengthy reports on the Brazilian labor m ovem ent and interviews of Labor
Ministers and the major union leaders are abundant in the newspapers.
In the analyses of the congressional voting process, the DiSrio do Congresso Nacional
provides the debates and voting records. Rio based IBASE publishes the Politicas
Governamentais each month which reports and analyses the government actions and
major events in the labor movement. The labor lobby organization, DIAP, provides the score of the pro-labor vote in each member of the CA in the Quern foi Quem na
Constituinte (Who was who in the Constituent Assembly). It also provides useful analyses of voting behavior in the monthly publications. Interviews with the nineteen
people who worked and/or work in the government, Congress, and labor and business organizations were conducted during December 1993 and January 1994 mostly to confirm the newspaper accounts and to get the feel of the events. Interviewees included
Labor Minister Pazzianotto, senator Almir Gabriel and Ronan Tito, directors of the
DIAP. Interviews are not the major source of this study but a complementary one.
STRUCTURE OF THE STUDY
Chapter 2 and 3 examine the structural change in the labor m ovement and the political power relations that constitute the reform environment. Chapter 2 deals with the two 2 5 transitions: political transition from authoritarian to democratic regime and the social transition dealing with the emergence and development of the combative “new unionism”. It analyses the Brazilian type of democratic transition and its impact on political power relations in the new democratic regime, one the one hand, and the impact of the mobilization of the workers since 1978 led by the new generation of union leaders, on the other. I will argue that while the political process was a “reforma” type, the change in the labor system was basically a “rupture" type. The argument I will make is that the “rupture” in the labor system provided the possibility of reform despite the continuity in the political style and dominance of the conservative political elites.
Chapter 3 deals with the disintegration of the corporatist labor system itself. It will present the basic characteristics of the corporatist labor system in Brazil and analyze how these traits have been undergoing changes during the transition years. The strength of both the Brazilian labor m ovem ent and the radical labor movem ent led by CUT will also be analyzed to examine the resources available to labor for reform politics.
Chapter 4-6 deals with the occasions of the labor reform during the Sarney government. Chapter 4 examines the failure of the government-initiated reform during the 1985-87 period to install the pluralist labor system and the introduction of the strike law that was not very much different from the old law.
Chapter 5 deals with the labor reform through the CA. The basic arguments here are that: 1) labor was well organized in the Congress and used public pressure effectively, while the employers were unprepared for the Constituent Assembly; 2) the coalition of the leftist/progressive and centrist politicians was the essential reason for the success of various labor clauses in the constitution; 3) the continued structure of the corporatist labor system is due to the alliance of the conservative segment of the labor 26 movement and the employers organizations; 4) the unity/disunity of the labor movement played a crucial role in success/failure of the labor reform through the constitution.
Chapter 6 deals with the political process of strike law of 1989. The initial attem pt of the government to introduce a harsh strike law was defeated by the Congress. The role of the military in the introduction of the MP 50 (Medida Provisoria: Provisional
Measure) and the role of the centrists and the moderate progressives in the approval of the substitute bill will be analyzed.
Chapter 7, the concluding chapter of this study, examines the possibilities and the limits (or success and failure) of the labor reform by analyzing the role of the factors that have affected the labor reform process. CHAPTER II
A TALE OF TWO TRANSITIONS: TRANSITIONS IN POLITICAL REGIME AND IN
THE LABOR MOVEMENT
The Brazilian transition has been characterized in many ways, including:
“transaction through transaction" ( Share and Mainwaring 1986), “transition controlled from above” (Viola and Mainwaring 1985), and “negotiated transition”
(Hagopian 1990). The common argument that these studies make is that the democratic transition in Brazil was gradual and controlled from above through the manipulation of the election law, the negotiation among the political elites, and the exclusion of the communists from transition process. The negative sides of the Brazilian transition mentioned include: less opportunity for a sharp break from the authoritarian regime, continued presence of the military as a potential threat to democracy, and the absence of an opportunity for profound reform in the socioeconomic area (such as agrarian reform, improvement of the income distribution) (Share and Mainwaring 1986:204-205).
These points seem to be all valid and constitute the important backdrop of the politics of labor reform.
However, this elite-led transition was not necessarily an insurmountable hurdle for the labor reform if labor already achieved its independence and organizational capacity to mobilize workers. Though the conservative politicians dominated at the level of the state apparatus, they were fragmented and lacked a common political project. Another transition that had been taking place in the labor front during the transition years resulted in the development of independent unionism that was not under the influence of 2 7 28 the traditional political styles or of conservative politicians. While divided, labor
developed its own power resources. Both the radicals and moderates of the labor
movement developed anti-statist positions and successfully carried out organizational
tasks at the national level. When the transition was over in 1985, the labor movement came out as an independent and legitimate political actor. With its strategic position in
the economy and political weight based on the support of workers in almost every economic and professional category, labor emerged as an independent political actor.
Labor practiced a new political game different from the traditional political game of clientelism - challenge and mobilization. The conservative elite in the new republic had no direct means to control labor mobilization. The success of the liberal labor reform during the Sarney government cannot be understood without appreciating the emergence of an independent labor movement.
TRANSITION IN THE POLITICAL REGIME
ELITE-CONTROLLED TRANSITION
The Brazilian transition is characterized as an elite-controlled transition. It was initiated by the regime elite. The speed and scope of liberalization and democratization had been carefully and skillfully managed by the key strategists of the authoritarian regime. The “political decompression” that began under the Geisel government (1974-
79) took place during the process of solving its “internal economy” and did not originate from any threat to the authoritarian regime itself by the opponents of the regime. “Political decompression” was triggered by the criticism of the strategic groups (business) who were disenchanted with the excessive expansion of the state apparatus in the economy and the perception that the regime did not provide enough 29 channels to represent their interests (Martins 1986:79-82). The regime elite also felt
the need to curb the autonomy and impunity of the hardliners in the “information
community” which had developed as a “parallel s ta te ” and could have been a threat to the
authority of the central executive (Smith 1987:188-191). The opposition party
(MDB) was weak and well under control. Actually the strength of the government party,
ARENA, and the confidence of the key regime elite in winning the next elections was seen
as a factor of allowing a political opening to the opposition. Moreover, key strategists of
the authoritarian regime sought to legitimate and institutionalize the regime through limited liberalization. Geisel and his chief adviser general Golbery were the “liberal authoritarians” who believed in a “relative democracy” which would provide limited participation and sharing in the decision making process with the safeguard of emergency repressive powers (Alves 1985:141-143).
In this context, the regime elite had not lost the initiative in their limited liberalization, despite some unexpected successes of the opposition. Two typical patterns of the control of the transition process had been the liberalization-repression cycle and the manipulation of the election law. The liberalization measures of the Geisel government (partial lifting of prior censorship, revocation of most explicitly coercive measures such as Institutional Act No. 5, the right not to be arrested without warrant) were matched by the wave of repression in 1975-76, especially in the state of S3o
Paulo, and the manipulation of the election law in 1977. The “April package” of 1977 included the appointment of 1 /3 of the senators by the government, indirect election for the state governors, diminution of political weight of the more industrialized regions, and the rigid restriction of the use of TV and radio in the campaign. The amnesty bill of
1979 was also matched by the Party Reform bill in the same year that artificially created a multiparty system which was designed to divide the opposition. The expansion of the dialogue with the opposition during the Figueiredo government (1979-85) was 30 accompanied by the repression of the social and labor movement. The protest of the
workers against the wage squeeze in 1983 was met by the violent repression of the
military police. All these measures were designed to control the advance of the
opposition, to ensure the electoral victory of the government party, and to obstruct the
mobilization of the social actors against the regime.
The control of the regime elite was eroded only at the last stage of the transition. By
the middle of 1983 a liberal wing of the government party, the PDS, was clashing with
president Figueiredo over the selection of the presidential candidate of the party.
Internal disunity over the selection of the presidential candidate of the government party
led president Figueiredo to announce that he would give up coordinating the selection of the government candidate. Another sign of the division of the ruling elite was revealed by the rejection of the government bills on wage control in the Congress with the help of the dissidents of the PDS in the middle of 1983. This was the first time the Congress rejected a government bill under the authoritarian regime.
However, the internal division of the ruling elite did not lead to the loss of control of the transition process. When unpopular Paulo Maluf was certain to be selected as candidate of the PDS, the liberal wing of the PDS represented by Aureliano Chaves and
Jose Sarney deserted the PDS and formed the FL (Frente Liberal: Liberal Front). This dissident group allied with the opposition PMDB and formed the Democratic Alliance. It supported the opposition candidate Tancredo Neves as president and in return Jose
Sarney of the FL became the vice-presidential candidate of the Democratic Alliance.
Ironically this internal conflict of the PDS and the desertion of its liberal wing eventually contributed to the continuity of the authoritarian political elite in the new democracy, because the dissident group successfully established itself as one of the major political forces within the new government. The Democratic Alliance won the presidential election. With the death of Tancredo Neves soon after the inauguration of his 31 government, the vice-president Jose Sarney, former president of the PDS, became a
president of the new government.
While the transition was not exactly following the original government plan, the
authoritarian regime was stili able to control the upsurge of popular support for the
direct election of the president. The control of the Senate by the PDS blocked the direct
election amendment by a narrow margin. Indirect election through the electoral college,
where PDS votes occupied the majority, was maintained. The PMDB needed the support of
the dissident group in the electoral college to ensure its victory.
The final days of the transition was characterized by a series of deals made among the
opposition leaders, dissidents group of the government party, and the military. Tancredo
Neves, the presidential candidate of the opposition struck a deal with the “Mineiros
Pact" with Aureliano Chaves, the vice president of the PDS and leader of the dissident group. It was agreed that whoever waxed strong in their respective party (PDS and
PMDB) and got its nomination would receive the total support of the other. Another agreement was made with the president of PMDB, Ulysses Guimaraes, that if the direct election amendment passed, Neves would support Guimaraes within the PMDB, and if it was defeated, Guimaraes would support Neves (Fleischer 1990:221). Neves also secretly struck a deal with the moderate members of the army high command through the general Ivan Souza Mendes and the general Leonidas Pires Gonpalves who became SNI chief and an Army Minister respectively in the new government. All these ‘pacts’ and deals reflected the needs of both the opposition and the ruling authoritarian elite. The opposition needed to ensure the uninterrupted process of transition for fear of the intervention of the military. The conservative ruling elite which included the military needed to ensure that new government would not threat their political power and privilege. Due to the strict control of social force, the Brazilian political transition did not
involve social actors in any significant manner. The process of political bargaining was
limited to negotiations among the military, authoritarian government, and the opposition
parties. Despite widespread support and the mobilization of mass rallies, the amendment
for the direct election of the president was defeated in the Congress by the government
party in early 1984. Both labor and business did not play any significant role in the
process of transition politics. Business was not mobilized as an independent power.
Labor mobilization faced the repression of the state. While combative union groups
launched the PT (Workers’ Party) in 1979 with the support of the leftist intellectuals
and the activists of the social movement, the political weight of the PT was insignificant.
Moreover, the leftists and moderate labor groups linked to the communist parties (PCB
and PC do B) prefered to ally with the PMDB. While the increasing disturbances in the
labor front led the opposition presidential candidate to promise a “social pact”, it was
not a concrete proposal but a political gesture to the working class in an attempt to
conciliate the increasingly defiant labor movement.
In sum, from the initiation of the political opening to the last moment of the
transition, the authoritarian elite was able to control the process of transition by
imposing the political rules of the game. The division of the ruling elite in 1984 and the victory of the opposition presidential candidate did not result in the elimination of the authoritarian elite from the new government. On the contrary, the opposition elite preferred to stick to the political scenario arranged by the authoritarian elite in order to rule out any unexpected interruption in the transition process. The inclusion of part of the authoritarian elite in the new government (FL) and the maintenance of the political power of the military is evidence of the successful performance of the authoritarian regime in controlling the transition process. 33 CONTINUITY IN THE DEMOCRATIC TRANSITION
The direct impact of the controlled transition was the continuity of the clientelistic
political style, blurring of the party identity, dominance of the conservative political
elite, and the unabated role of the military. These traits have been ominous to the
consolidation of democracy in Brazil and led O’Donnell to warn of the risk of “slow
death" of democracy (O’Donnell 1988).
After Neves was appointed as the opposition candidate in the presidential election, he
made a deal with the FL to win in the indirect election. The FL had about 100 votes in the
electoral college whose total vote counted 686. Neves assured that he would not criticize
the “revolution” (coup of 1964) or the incumbent Figueiredo government; that the
vice-presidential nominee would come from the ranks of the FL; and that there would be
an equitable distribution of administrative posts. Neves even gave his word to the FL that
all those who backed him would be repaid with posts in his government (Hagopian
1992:259). Since the electoral college was composed of members of the Congress and delegates from each state, the political negotiation between the PMDB and the FL also involved state-level agreements. The main point of the negotiation was the distribution of 15,000 federal jobs. In many states, regional presidents of the PMDB and the FL drew up agreements in which federal and state posts would be distributed to each party. The criteria of the distribution was the proportion of the FL votes in the electoral college
(Hagopian 1992:259). Since much of the FL was composed of the traditional politicians based in regional oligarchies, this deal also ensured the continuity of the traditional style of politics, that is, reproduction of clientelism (exchange of government position and public fund with the votes) at each level of the political system.
The negotiated character of the transition did not help the party system to emerge as the major vehicle for the representation of the interests of civil society. Political 34 parties in Brazilian history have been secondary actors in the political system . The
centralized state structure established before the emergence of the national parties posed
a difficulty for the institutionalization of the party system. Extensive clientelism
prevented the articulation of group or class interests (Mainwaring 1988). The
proportional election law which allows the election of several candidates from the same
party in one district also encouraged internal conflicts within parties and undermined
party discipline1 (Mainwaring 1990). Added to this historical weakness of the political
parties, was the impact of migration of the old traditional politicians to the political
party with the best election prospects in order to win election regardless of the party
program. During the period of transition, previous supporters of the military regime
migrated to, and transformed, the new party of government, the PMDB. This occurred at
the national, state, and local levels, and had important implications for “the blurring of
the party’s identity in government and its transformation from a catch-all to a
traditional, clientetlistic party, that is , a machine to dispense government patronage”
(Hagopian 1992:266).
Most of these migrating politicians were interested in the participation in the distribution of the public money and posts in the national, state, and municipal governments. Due to the concentration of tax revenue in the federal government (70%) the deal between the president of the republic and the state governors, and between the governors and the federal deputies and senators in their respective states, involved the exchange of federal funding in the states with support for the federal government. This
1 Brazilian electoral system has several unusual features that grant politicians nonparallel autonomy with respect to their parties. These features include a system of proportional representation that uses an open list and a mechanism known as the candidato nato, which allows politicians to get on the ticket despite the opposition of the party leadership. As a result, the electoral system reinforces the individualistic behavior of the politicians and has contributed to undermine efforts to build more effective parties. In Brazil, the extreme party weakness and individualistic patterns of representation that are reinforced by this electoral system have sustained an elitist polity. See Mainwaring (1990) 35 resulted in the “governors’ politics” in which the state governor became the leader of
the deputies and senators in each state and the deal between the president of the Republic and the state governors played an important role in drawing the support of the Congress
(Power 1991).
The study by Hagopian (1992:267) demonstrates that the phenomena of migration of the politicians in search of maintaining contacts with the government did not diminished during the New Republic. In the state of Minas Gerais, local elites and party bosses flocked to the PMDB only not to be excluded by the state resources when it became a government party in 1985 . At least 200 mayors and local party bosses changed partisan affiliation virtually overnight from the PDS to the PMDB in mid-1985. Among the 35
PMDB deputies from the state of Minas Gerais in 1986, only 9 were in the PMDB since the days of MDB (former PMDB) while 18 were in other parties before they joined the
MDB or PMDB (Hagopian 1992:270). Thus the PMDB which had been the party of the opponents of the military government now opened the door to those who had supported and profited from the authoritarian regime. Because of the infiltration of those who seek government patronage, the potential of the party to represent a broader segment of society has diminished. The heterogeneity of the PMDB after the transition was well recognized by the politicians of PMDB and has been lamented by many. As a result of the incorporation of these migrant politicians, party discipline diminished even more and it was made even more difficult for the party to come out with coherent policy orientations.
The new democratic regime was established without major shake-ups of the composition of the political elite. The congressmen elected in Novemberl 982 were working until the end of January of 1987. For two years after the transition the
Congress was representing the power relations formed under the military regime.
Though the PDS, the government party of the old regime, suffered most due to the desertion of the FL group, the victory of the opposition party candidate was not matched 36 by the recomposition of the congressional power structure. Though the ruling coalition
composed of the PMDB and the PFL (Partido de Frente Liberal: former FL) constituted
the absolute majority in the Congress, internal competition for government patronage
and the heterogeneity of the political forces within the ruling coalition made it difficult
for the ruling elites to present and implement coherent reform measures. With a
president from the PFL, the PMDB oscillated between being a government party and opposition party in its role vis-a-vis the government.
The continuity of the old political elite was also clear in the new Constituent
Assembly. The PMDB won big in the November congressional election of 1986 (which doubled as the Constituent Assembly) after the success of the Cruzado plan which lowered inflation for several months. The PMDB swept all the races for governor and elected majorities in the Chamber (53%) and Senate (63%). The members of the PMDB constituted 54% in the Constituent Assembly. According to the study of Fleischer
(1990:239) the ARENA (former PDS, the government party up until 1979) constituted the largest group (217 members) in the CA in terms of 1979 political affiliations, while the more authentic PMDB members counted 212. The 298 members of the PMDB in the CA included 30 members who had been in the PDS in 1983 and 42 members who had been in the ARENA in 1979. Despite the majority position of the
PMDB, the authentic PMDB counted just about 40% in the Constituent Assembly (CA).
Those who fought against the military regime by 1978 (MDB-PMDB during 1978-82) in the CA counted 137 (25%).
However, the apparent overwhelming power of the old politicians should not be overemphasized. While these reform-oriented forces in the PMDB were the minority, if we add the 58 members of the five leftist parties (PDT, PT, PCB, PC do B, PSB), at least about 195 members (35%) could be considered reform-minded. Though they were the minority, they were a significant force nonetheless. While the former supporters of the 37 military regime had greater numbers than the opponents, they did not constitute the
majority by themselves. The continuity of conservative power was clear, but at the same time, the forces of the change were not that small. Depending on the issues and the degree of public pressure, there was space for alliances between the centrists/moderates and reform-oriented forces to be formed. Actually the coalition between moderates and progressives was the reason why many of the labor demands were accepted in the CA as will be examined in Chapter 5.
Another instance of continuity was the presence of the military power in the new government. Not only was the military exempted from investigation and indictment for human right abuses during the dictatorship, it actually forged a strong alliance with president Sarney and actively participated in the domestic political agenda (Agiiero
1992:163). The military actively supported the presidential system and a 6 year mandate for Sarney. Military ministers and the SNI chief, general Mendes, had also actively participated in the policy process that dealt with the increasing frequency of strikes during the Sarney government. The military repressed the strikes in the ports and refineries in 1987, and steel company in 1988. The Navy Minister Savoia directly ordered the repression of the strikes in the port with his own decision (Zirker
1993:100). The military pressure was the main reason why Sarney issued MP 50
(Medida Provisoria: Provisional Measure) in 1989 that was not much different from authoritarian strike laws that had been abolished in the CA.
In sum, the elite-negotiated transition in Brazil resulted in the continuity of the authoritarian elites and in the clientelistic political style in the new regime. It should be pointed out, however, that this continuity, while undoubtedly an obstacle to the overall reform in socio-economic areas, did not necessarily constitute an insurmountable barrier to the reform. The substantial number of reform-minded elites, while minority, established them selves within the governm ent and Congress. Ironically the 38 clientelistic political practices and the weak role of parties in shaping the political life,
including the reform agenda, gave more role to the interest groups of civil society.
This was especially the case with organized labor where the government could not dictate the labor issues any more due to the emergence and challenge of the independent labor movement during the transition years.
LABOR IN TRANSITION
POLITICAL OPENING AND MOBILIZATION OF LABOR DURING 1 978-80
After the 1964 coup labor had been subject to harsh repression by the military regime. Union leaders were arrested and many unions were intervened in by the
Ministry of Labor. Almost all strikes were made illegal. Lack of work place organization made Brazilian labor m ovem ent an easy prey of the repression with no significant resistance (Erickson 1977b). Corporatist labor control mechanisms, through the combination of repression, intervention, and cooptation of the labor leaders resulted in the transformation of the unions from a class organization into the welfare organization adjunct to the state. The labor movement began to reassemble its forces only in 1967 through the Inter-Union Anti-Wage-Squeeze Movement (Movimento Inter-Sindical
Anti-Arrocho: MIA) taking advantage of the relaxation of the repression. However, it did not constitute any threat to the military regime, because the unions were still firmly under the control of the state. It foundered in 1968 (Humphrey 1982:24). The unexpected eruption of the mass strikes in Contagem (Minas Gerais) and Osasco (S5o
Paulo) in 1968, while representing a new development in the labor movement (anti- state, rank and file activism), were easily crushed by the regime. In this year the 39 military regime promulgated AI-5, 2 tightening the repression by closing all avenues of legal organization. The new Medici government of 1969 intensified the repression, systematically detaining and torturing individuals suspected of “subversion”.
Throughout the early 1970s, union activists faced a real threat of imprisonment
(Seidman 1994:61). During the military regime workers not only suffered the loss of income due to the wage squeeze policy but also were demobilized by the harsh repression.3 Between 1965 and 1969 there was only one officially recorded strike in the state of S3o Paulo, the historical center of union militance, which recorded 96 strikes in the year before the coup (Seidman 1994:62).
The limited liberalization of the Geisel government in 1974, after 10 years of hard-handed military rule, provided an opportunity for the opposition and the social movement to grow. The regime allowed use of TV and radio by the opposition in the 1974 election. Silence and isolation of the opposition begun to break down. Despite the wave of repression in 1975-76, the criticism and mobilization of the Catholic church,
Brazilian Bar Association, and the Brazilian Press Association led to the elimination of the direct censorship of the press and the revocation of the AI-5. A series of liberalization policy brought back habeas corpus, judicial independence, and the recovery of the “normal” functioning of the Congress. The regime withdrew the absolute power it had exerted for almost ten years.
The relaxation of controls on the press and the restraints of security forces provided opportunities for the unions and the working class to express their discontents. There
2 AI-5 (Institutional Act no.5) was the most draconian measure decreed in December 1968. Major contents include: 1) the power to close the federal congress 2) the right to cancel the electoral mandate of the members of the congress 3) the right to suspend political rights of the citizens for ten years 4) the right to dismiss public employees 5) the right to fire the judges 6) the power to declare state of siege 7) suspension of habeas corpus. See Alves (1985:95-96)
3 For detailed discussion of the labor control mechanism during the authoritarian regime see Chapter 3. 40 were gains for the unions and workers despite the uncertainties involved. First there was a noticeable relaxation of the wage squeeze. Wage increase remained above the cate of inflation in 1976 and 1977 as well. Second, increased institutional space was allowed for union activities. Unions were able to “say a lot more", even if their activities were still constrained (Humphrey, 1982:1 52). This relaxation allowed a wider debate about the need for and desirability of union autonomy. The unions raised new demands4 and the government and employers were favourable to allowing more freedom to the unions.
However, the change of climate did not lead to an immediate change. The decisive advance was made in 1977 by the disclosure by the DIESSE (Interunion Department of
Statistics and Socio-Economic Studies) of the fact that government calculations of inflation of 1973 and 1974 were made artificially low. The government acknowledged that inflation in 1973 was 26%, not 14%, as was originally claimed. The DIESSE calculated that a wage increase of 34% was necessary to compensate for the lost wages resulting from the miscalculation of the inflation rate. In September 1977, workers in
Sao Bernardo launched the campaign for the wage recovery of the lost portion in the
1973-74 period. SSo Bernardo was the center of the Brazilian automobile industry where a large number of skilled and semi-skilled workers worked in a small number of companies. The workers in S3o Bernardo avoided state mediation through the Regional
Labor Office which would be unfavorable to the workers and wanted to negotiate directly with the employers. The denial by the employers of the workers’ right to participate in the negotiation led to the spontaneous work stoppage in Saab-Scania in May 1978. The strike soon spread to other factories in S3o Bernardo, such as Mercedes, Ford,
4 For example, the presidents of the Confederation of Workers in Agriculture and Credit Establishments demanded followings: revision of trade union structure; an end to the restriction of union freedom such as union tax and ministerial control; workers’ participation in the decision on the wage increase; free and direct bargaining between workers and employers; the liberalization of the strike right. (Humphrey 1982:154) 41 Volkswagen, and Chrysler. By the second week of the strike, 78,000 workers were on
strike in the ABC region,5 the industrial heart of Brazil.
The pent up grievances and the sudden demonstration that striking was possible
quickly created a mass movement that marked the beginning of great mobilization in
Brazilian labor history. By then the strike was virtually unknown for long time. There
were no procedures to deal with the new situation. The employers were taken by
surprise and the government was temporarily stunned into inaction, maintaining a
relatively neutral position by stressing that wage concessions should not be transferred to the price increase. Though with some resistance, the employers were forced to negotiate with the unions and conceded a 24.5% wage increase (Alves 1986:195). Metal
Union of S3o Bernardo took the role of the negotiator and the first collective bargaining was contracted in the Brazilian auto industry. Encouraged by the gains of the workers in
S9o Bernardo, workers in other industrial areas of the state of S3o Paulo (Santo Andre,
S3o Caetano, Osasco, and the city of S3o Paulo) also began to strike. In the first four months of the strike movement, it was estimated that 280,000 workers in over 250 firms stopped work. There were 83 major strikes in the five months following the presidential succession in March 1978 (Humphrey 1982:160-166). The mobilization was not limited to the most advanced sectors. The new generation of union leaders were noticed in all over Brazil. The most prominent figure of the strike movement, the president of the Metal Union S3o Bernardo, Luis ln3cio da Silva (“Lula”), becam e a national figure. He later became president of the PT (Workers’ Party) created in 1979 and ran as the presidential candidate of the progressive forces in 1989.
The strike spread to other sectors including port, urban transport, glass, ceramics, textiles, banks, teachers and medical doctors. Especially important was the widespread
5 ABC region refers to the Santo Andr6, S3o Bernardo do Campo and Diadema, S3o Caetano, all located in the suburbs of the city of S3o Paulo. It is the center of the Brazilian automobile industry that produces one million vehicles a year. 42 participation of the middle class sector. Middle class and white collar workers were also suffering a wage squeeze: in 1978 teachers earned about US$226 per month; medical doctors employed in the state medical system earned around US$300 per month (Alves
1986:196). Though the strikes in the industrial sectors were tolerated in this first year of mobilization, the workers in the essential sectors were quickly repressed by the state. The strike in the banks, for example, led to the Decree Law No. 1,632 of August
1978 which included the bank workers in the “essential” category in which striking was prohibited.
Resort to striking was repeated in 1979. Discontent with the negotiation with employers, metal workers in S3o Bernardo launched another strike in May. This time employers were ready and the state intervened. Employers did not allow the workers to stay within the factory as a strategy to isolate the workers and to weaken the strike.
Workers had to confront the police in the streets. The Labor Court issued an order that striking was illegal. However, the momentum of the movement was kept by mass rallies, picketing, and the strike fund. About ninety thousands of workers participated in the assembly in the local soccer stadium, Vila Euclides. Despite the agreem ent of union leaders to stop the strike pending further negotiation with the prospect of intervention, the rank and file refused to return to work. The government intervened and the union leaders were deposed. But the strike did not end immediately. The workers had widespread sympathy and the Catholic church provided the Cathedral of S3o Bernardo as a temporary, unofficial union headquarters. The intervention was less effective than before. The strike ended after the compromise arranged by the employers and workers.
But neither side won a clear victory. Despite the intervention of the state, the unions maintained their strength. The deposed leaders continued to act as the workers’ representatives. Employers in the automobile industry broke with the employers’ federation and allowed higher wages than was recommended by their federation. 43 Employers were afraid that further stoppages might strengthen the hand of the more
militant elements in the unions.
The mobilization in other sectors also increased greatly. More than three million workers in 15 states from more than 100 categories resorted to strikes. Other than the metal workers who led the strike movement, especially active were the urban service workers, textile workers, miners, bank workers, construction workers, and teachers.
(Keck 1989:263-264).
The 1978 strikes did not result in the intervention of the state. But in 1979 many unions were intervened in and the leaders were deposed. The most severe intervention was in the case of the metal workers’ strike of Sao Paulo in September which was initiated by the rank and file despite the opposition of the moderate union leader,
Joaquim dos Santos Andrade. It was organized by the militants of the Catholic labor movement and the union opposition. The troops were deployed to break the picket lines.
Local churches were invaded to dissolve the meeting of the workers and one worker died during the confrontation with the military police (Alves 1986:200-202). The liberalization policy of the Figueiredo government did not include the mobilization of the working class. It was “the one real rupture point in the scheme of the controlled
‘opening’” (emphasis original, Molses 1982:62).
After the mobilization of 1978-79 the most pressing issue in the labor movement was the establishment of a lasting organization that could lead the strike movement more effectively and systematically. The main problem of the strikes in these years was the lack of an organizational network to lead the spontaneous revolts of the workers. In many cases strikes broke out against the wishes of the pelego6 union officers in a spontaneous
6 Pelego refers to the lambskin placed on the saddle to cushion the impact of the horse’s trot. In union term, it refers to the union leaders who cooperate with the government and management rather than fight to defend the workers interests. 44 manner. In some cases “authentic” union leaders were called in to help set up emergency
organizational structures and conduct on-the-spot leadership training.
In 1980 metal workers in ABC region struck again. They were better organized to
deal with the removal of the leadership in case of intervention. The 1980 strike was
prepared and organized “with the precision of a manufactured product". In the Metal
Union of the Sao Bernardo, the strike was preceded by 300 preparatory meetings at the factory level. Wage and Mobilization Committee and the Committee of 450 were organized to run the strike in case the leaders were deposed (Moists 1982:58). The government response was more repressive. The union headquarters and the soccer stadium that was used as the meeting place in 1979 were occupied by the military troops. The Cathedral of S3o Bernardo was again used as the temporary union headquarters. The government prohibited the employers from negotiating with the strikers and threatened corporations that defied the order with the withdrawal of government credit and tax benefits (Alves 1986:204).
Despite the support of the Catholic church (especially the grass-roots organizations of the church such as the Communidadesde Base (Base Community) and theOperarios
P estorais (Pastoral Workers)) and the opposition politicians, the repression and the fear of losing jobs during a recession, which began to worsen from 1981, resulted in a lower number of strikes.
The increase of strikes since 1978 reflected a change in the basic nature of the labor movement. The Brazilian working class began to voice its concern and was ready to take collective action. The strikes during 1973-77 period numbered only 12 (Mois6s
1979:66). The number of strikes in 1978 jumped to 118, which increased to 246 in
1979. During 1980-82, despite the repression and recession the number of strikes was maintained around 140-150. With the recovery of the economy in 1983 strikes 45
increased to 347 in 1983, 492 in 1984, 619 in 1985 (NEPP 1989:129)7 The
mobilization of 1978 opened a new chapter in the Brazilian labor movement.
The mobilization of the workers was accompanied by the enhanced organization of the
workers in the working places, the recovery of the union function as a class
organization, and the demand of reform in the union structure and labor legislation. If
the transition in the political regime was a “reforma" type, the transition in labor was
characterized by the “rupture”. It struck at the whole set of old corporatist labor
control mechanisms which were designed to control and obstruct the mobilization of the
workers.
The intervention and the repression of the state resulted in the perception that the
state was on the employers’ side. Union autonomy from state intervention was one of the
foremost demands of the union leaders. The authoritarian state was the biggest hurdle
against defending the workers’ rights and demands. The need for the political party to
defend the interests of the working class was acknowledged and was realized through the
creation of the PT (Workers’ Party) in 1979. Metal workers in the ABC region played
the pivotal role together with the leftist intellectuals and Church activists in the
creation of the PT. The politicization of the union movement was reflected in its support
for the amnesty of political prisoners, the installation of the Constituent Assembly, and
the repeal of the repressive laws. The result of the mobilization of the 1978-80 was the
politicization of the labor movement and the activation of the rank and file. The profile of the Brazilian labor movement began to change after 1 5 years of silence.
7 For more analysis on the strike movement which practically made obsolete the corporatist labor control mechanism, see Chapter 3. 46 FORMATION OF THE NEW UNIONISM
After the mobilization of 1978, several groups of new generation union leaders emerged and challenged the union leaders of the official union structure. The first manifestation of this challenge was made in the 5th congress of the CNTI (National
Confederation of the Industrial Workers) held in Rio de Janeiro in July 1978. This group was composed of “independent” new generation union leaders (“authentics”, mostly leaders of the Metal Union in the ABC region) and the unionists linked to the communist parties, especially the PCB. In their “Letter of Principles” this group of union leaders demanded the redemocratization of the country through direct elections, convocation of the national assembly, and revocation of laws of an exceptional nature. In the labor front they demanded the strike right, free bargaining with employers, substitution of the individual contract by the collective contract, freedom of affiliation to the international union organization (Rodrigues 1991:15-16).
Four major groups of new union leaders emerged during the mobilization of the late
1970s (Rodrigues 1991:27-30). They were different in their background and labor movement strategy during the democratic transition. These groups were: 1)Unidade
Sindical (Union Unity) 2) “independent” (or “authentic”, or combative) union bloc 3) union oppositions 4) extrem e left. First, Unidade Sindical was the group of unionists that followed the political orientations of the PCB (Brazilian Communist Party), PC do B
(Communist Party of Brazil), and MR-8 (October 8 Revolutionary Movement). While not opposing the mobilization of the workers, they were against the idea of the general strike to avoid confrontation with the military. They also opposed the ILO Convention 87
(which stipulated the freedom of organization of the labor unions), which implied plural unionism, in the name of union unity. The concept of autonomy and liberty of unions was limited to the elimination of state intervention in the unions, but did not comprise the 47 free organization of unions on the part of workers without any restrictions. They
emphasized the concentration of energy on winning positions in the official union
hierarchy. Labor demand would be met via direct interaction with the state, mediated and supported by the political parties (Keck 1989:273). They were against the creation of the PT and were in favor of the alliance with the PMDB and other social sectors as a way of guaranteeing a democratic transition. Their strategy was the old policy of ‘democratic front’ where revolution would be conducted by the alliance with the bourgeoisie at the first stage.
The second tendency, called “independent” or “authentic” unionists, was the one that had direct conflicts with the Ministry of Labor, carrying out strikes, and raised demands that contradicted government economic policy. These unionists were not well defined both ideologically and politically at this early stage of mobilization (Rodrigues 1991: 28-
29). However, they represented a new development in the labor movement: distrust of the state and existing political parties, rank and file activism, dismantling of the corporatist labor system, direct bargaining with the employers, and the use of collective actions. They emerged from the official union structure of corporatism and emphasized the importance of winning control of the unions.8 With this background, “authentic” unionists, while favoring rank and file activism through the factory committee, believed that unions had to have a superior role in guiding the activities of the factory committee.
The third group, called “union opposition”, gathered the union militants that were in opposition to the leadership considered accommodative orpelegos “ .” The majority of this group was related to the Catholic church through the “Pastoral Workers”
8 In case of Metal Workers Union in S9o Bernardo the new groups of unionists emerged as early as 1969. At that time they had not actively opposed the military government, but neither were they content to run an inactive and unrepresentative union. It was apolitical and anti-left but favored the rank and file activism, direct bargaining with the employers, and tried to avoid the state intervention. They also defended factory committee and the union delegates in the plants. By the 1978 mobilization union opposition was fully integrated into the leadership (Humphrey 1982:129-131). 48 (Pastorais Operarias). Contrary to the “authentic” groups who preferred the idea of a
union delegate to whom the factory committee was to be subordinated., the members of
the union opposition valued the factory committee as an autonomous organization of workers. They opposed the strategy of the Unidade Sindical which gave more emphasis to the alliance with other social and political actors and concentrated on the organization and activities at the base level.
Finally, the “extreme left” refers to the union activists of the small clandestine parties of Leninist and the Trotskyist ideology. They tried to practice a kind of revolutionary unionism. Their priority was not the return to democracy or an expansion of union space within the system, but the struggle for socialism through radical practice designed to deepen the social conflict.
Among these four groups, Unidade Sindical developed into a moderate union group while the rest of these three tendencies grouped together in a radical current. During the transition years Unidade Sindical supported the PMDB, while the other three joined to create the PT.
During the period from February 1980 to June 1981, “authentics” and union opposition joined the grassroot activists of the Catholic church and neighborhood movement in a series of meeting to define the direction of the labor movement. At the first meeting of February 1980, these groups established some principles on the democratization of the union structure such as the end of the CLT (Brazilian labor law), and its substitution by the Labor Code (Codigo de Trabalho), the establishment of the collective contract instead of individual contract, union liberty and autonomy according to the ILO Convention 87 (while trying to preserve the unity of the workers), end of restrictive strike law, direct negotiation between employers and employees, and end of state intervention (Rodrigues 1991:18). Their demands were focused on labor issues at this stage. 49 Five months later in July 1980, activists of the church and of the diverse social
movements, and union leaders of about 50 entities participated in another round of meeting. These entities included14 church organizations, 23 social movement organizations, and 24 unions. This meeting pointed out the necessity of having a political party of the working class for the first time. It also defended the creation of the
CUT as a peak organization connecting urban and rural workers and reemphasized the democratic and autonomous union structure. The organizational base of the movement was agreed to in this meeting.
By September 1980 the “authentics” and the union opposition expanded their organizational base all over the country. A total of 1,500 delegates from 15 states participated in the “National Conference of the Workers in Opposition to the Union
Structure”. The conference proposed to transform the current union model into “an independent, free, autonomous, and democratic unionism.” About a year later, in July
1981 these groups met again and approved agrarian reform under the control of the workers, realization of the general strike, job security, the termination of the corporatist union structure, the formation of the CUT as the most representative organization of the Brazilian working class. During the 1980-81 period, the defiant leaders of the unions, union opposition, and the social movement defined their goals and strategies, articulated their demands, and expanded the organizational base of a more combative union movement, which became the basis of the creation of the CUT in 1983.
In August 1981, all the militant forces of unionism organized the CONCLAT
(Conferencia Nacional da Class Trabalhadores: National Conference of the Working
Class). The importance of this meeting was that practically all the militant factions of the union movement participated in this meeting includingUnidade Sindical. A total of
1,126 entities that participated in this conference (5,247 delegate) were composed of
480 urban unions (3,180 delegates), 384 rural unions (969 delegates), 32 50 associations of public employees (49 delegates), 176 pre-union associations (875
delegates), 33 urban federations (90 delegates), 17 rural federations (134 delegates),
4 federations (22 delegates). The fact that workers conference on this scale was possible
under the authoritarian regime indicates that leftist or anti-government union leaders
had already occupied the leadership of numerous important unions (Rodrigues
1991:32). When government control became loosened, the new generation of union
leaders took advantage of the administrative infrastructure and the resources provided
by the official structure. Major demands that united the diverse faction at this
conference were: job security, reduction of working hours to 40 hours per week without
loss of income, reform of the CLT, right to strike, unionization of public employees,
amnesty, convocation of the Constituent Assembly, agrarian reform, and autonomy of
unions from the government. Union pluralism was rejected at this stage while the
autonomy and liberty of the unions were demanded. The conference also elected the Pr6-
CUT National Committee which was supposed to prepare a new congress of the CUT in
1982.
But internal conflict led to a split. Unidade Sindical wanted to enlarge delegations
federations and confederations in the future CUT and exclude associations not recognized
by the corporatist labor law (CLT). The “authentic" group argued that the federations
and confederations were not representative of the workers and that representation should be on the basis of unions and of rank and file delegates elected by workers proportional to the size of their base (Keck 1989:277). The most controversial issue was the general strike. Radical groups supported the idea of the general strike to pressure the government to heed all of their demands in October 1982. Moderates, called the “reformist bloc”, of Unicidade Sindical were against the general strike. They feared that the aggravation of social tension could disrupt the process of political opening. The 51 more combative force was attempting to promote social transformation that would open
the road to the socialism.
The Pro-CUT formally split apart in July 1 983. “A uthentics”, union opposition,
and Trotskyists held the founding congress of the CUT (Central Unica dos Trabalhadores:
Sole Workers’ Organization) in August 1983 in S§o Bernardo. 5,059 delegates from
665 unions and 247 other labor organizations participated in the creation of the
national organization of the radical labor movement.Unidade Sindical also formed the
CONCLAT (CoordenagSo Nacional da Classe Trabalhadores: National Coordination of the
Working Class) in November 1983 at Praia Grande of Sao Paulo with the participation
of 4,254 delegates from 1,258 unions, federations, and confederations. The defiant and
combative labor movement that emerged at the end of 1970s not only challenged the
existing authoritarian labor control mechanism but also streamlined their similarities
and differences by organizing themselves along common policy lines.
The “new unionism” did not conquer all the labor unions in Brazil. There were more
unions that did not join either the CUT or the CONCLAT. However, the impact of the more
combative union movement was such that six (out of nine) confederations and 67 (out of
145) federations participated in the CUT and the CONCLAT. The confrontation strategy of
the CUT worked better than the moderate positions of the CONCLAT and as a result the
CUT grew faster than the CONCLAT. In 1985 about 60% of the striking unions were
reported to be affiliated with the CUT, and the other 40% received some support from
the CUT (Keck 1989:278). While moderate unionism of the CONCLAT, which changed its
name to the CGT (Central Geral dos Trabalhadores: General Workers’ Organization) in
early 1986, suffered a further division over the issue of role of the political party, the
CUT grew as the largest peak labor organization by 1989. The fact that the radical labor
movement established its status as the most representative labor movement demonstrates that the transition in labor was a rupture in the history of the Brazilian 52 labor movement. The fifty year corporatist labor system has been in crisis due to the
emergence and dominance of the radical labor movement.
LABOR MOVEMENT AND THE TRANSITION ELITE
The labor movement and the leftist parties were not playing any crucial role in the
process of regime change. The leftist parties of the moderate tendency (PCB, PC do B)
were actively supporting opposition presidential candidate Tancredo Neves in the mass
rallies. The more radical PT was against indirect election and did not participate. The
votes of leftists parties were 19 out of 686 votes (2.7%) in the electoral college.
Tancredo Neves himself did not demand nor refuse the support of the left. According to
Neves, an ordered and smooth transition cannot be made without the support of left:
“Isolation and hostility of the left generate the difficult social and political problems”
(ESP 9-7-84). He was more worried about the possibility of a mobilization of the right wing disturbing the transition process. The opposition Democratic Alliance was so strong in public opinion and among the governors that they did not worry about the electoral college. The opposition was more worried about the possibility of government candidate Paulo Maluf’s early withdrawal from the race, which might have led to an unexpected change of the political game (CB 10-7-84). The room for the labor movement’s affecting the transition coalition was quite limited because the election of the president was through the electoral college and because the Neves commanded majority support long before the election.
Tancredo Neves tried to conciliate the nation and promised something for every social and political force. He said he was the candidate of both the bankers and the communists. To the employers he advocated the development of the domestic market, the modernization of the national capitalism, and the privatization of the economy. To the workers he defended the 53 democratization of the strike law and extolled the workers as the mainstay of democracy and
the vanguard of social justice. He also criticized the CLT as “fascist” and promised the
participation of the workers in the management of the BNH (Bank of National Housing) and
FGTS (Time-in-service Guarantee Fund)9 (JB 10-9-84, 10-16-84). He also promised
in a meeting with the unionists that “I will respect union autonomy. The laws that protect
the workers will be amplified and the existing laws will be rigorously observed” (JB 10-
18-84). In another meeting with the unionists in Belo Horizonte he announced that workers
should participate in debates on the wage policy and labor legislation and repeated his commitment to not intervene in the unions.
The control of labor conflict and the accommodation of the pent-up grievances of the working class were one of the major challenges Tancredo Neves faced. His answer was the moderation of the conflict through a social pact. The labor movement was divided.
The CUT refuted the idea of a social pact as another attempt to impose the sacrifice of the workers to the benefit of the dominant classes. Lula, the president of the PT, did not believe that Tancredo “who got the support of 90% the employers, bankers, and the oligarchy of the Northeast will attend the interests of the working class” (10-21-84
CB). The CONCLAT, federations and confederations of the official structure were in favor of the social pact. However, the idea of a social pact went nowhere. Tancredo repeated that he would not impose any demand on the “workers who had nothing to concede due to the years of recession”. Instead of a concrete proposal on a wage rate, he just emphasized the importance of frank conversation with all segm ents of Brazilian society. He also denied
9 This is the fund made under the authoritarian regime to ease the burden of dismiss the workers. Workers dismissed with just cause were paid one month’s salary for each year of service. Workers dismissed without just cause were given additional! 0% . FGTS allowed the employers deposit 8% of the workers’ monthly wage to an account in the worker’s name. When the workers are dismissed, workers receive the indemnity from their own FGTS account. This way employers are freed from the burden of the paying large sum of indemnity at one time as the old (Employment) Stability Law had stipulated. The fund is deposited to the BNH and are used to finance industrial projects and construction. For more about the FGTS see Alves (1985:68-69). 54 that the social truce he was seeking would block the right to strike. Other than these
qualifications, Tancredo never came up with any concrete proposal for the social pact for
6 months since he first proposed it until the eve of his inauguration on March 15 of
1985. Even the politicians and economists who helped Tancredo were skeptical and
perplexed due to the lack of definition of the social pact.
Tancredo Neves did not get all of the support from the labor movement despite being
the opposition candidate against the candidate of the authoritarian regime. The CUT, the
most combative labor organization, did not see much difference between the Tancredo government and the authoritarian regime and was willing to confront the new government from the start. Tancredo made some favourable remarks about the working class and promised to guarantee union autonomy and the right to strike. But his proposal of a social pact was not sufficiently defined and his appointment of the economic team, especially the appointment of Francisco Dornelles as Finance Minister, who was intended to calm the conservatives, revealed that any significant change in economic policy would not occur. As a result, as will be examined in the first part of the chapter 4, the government and the labor movement failed to establish a mutual understanding before the inauguration of the new democratic government in March 1985.
CONCLUSION: THE LIMIT OF CONTINUITY
The literature centered on the characteristics of the Brazilian transition has a limited capacity to predict the development of the labor reform process due to its exclusive focus on the role of political elites. The implication of the Brazilian transition with regard to labor reform is at best ambiguous. Obviously the pact among the political elites implies that any profound change will be impossible due to the weight of the conservative or authoritarian elements of the ruling elite in the new regime. However, 55 there are some factors that elite-focused transition studies are missing in dealing with the process of labor reform.
First, due to the lack of strong ties between the major political parties and the labor movement, the political parties had no major control mechanism on the increasing labor conflicts. There were two options: selective repression and the social pact. The selective repressive measures actually occurred on several occasions in the new democratic regime. But the cost of repression is higher in a democratic political setting. The repression of the strike in Volta Redonda in November 1988 and the death of three workers during the confrontation between the troops and the workers caused public anger and worked against the government in the municipal election that took place just several days after the clash. Given the mobilization of the workers and the cost involved, the government tried to appease the labor movement through the proposal of the social pact. This was never a serious agenda for government economic policy but a political gesture used on occasions of heightened labor conflicts. Though president Sarney and
Labor Minister Pazzianotto opened the channels for communication with the labor leaders, it did not help to decrease the labor conflicts .
Second, the Brazilian transition has strong elem ents of fragmentation of the political elite. The ruling PDS was split over the presidential candidate and the liberal wing of the
PDS (Frente Liberal) formed an alliance with the opposition PMDB. On the other hand, the PMDB, which became the largest party after transition, was itself a party of very heterogeneous political forces. As of 1984, 14 communists were under its label together with many conservatives and even former supporters of the military regime. This meant that, though the conservatives were the majority in numbers at the time of the transition, their political force had not been effectively organized. Party discipline was weak and they were changing parties according to political convenience and in search of political patronage. The labor movement was not under the influence of the conservative 56 political elite but reorganized itself through the “new unionism". Though divided, the
success of the confrontation strategy of radical unionism demonstrates the autonomy of
the labor m ovement from the political logic of pact-making among the political elites. On
the basis of independent power resources (strategic position in the economy and the
sheer size of the workers), the labor movement had the leeway to take advantage of the
fragm ented ruling alliance.
Third, the gradual transition, in a way, worked in favor of labor reform. The political opening liberated and encouraged the developm ent of opposition political parties including the PT which was organized in 1979. The mobilization of workers at the end of
1970s were possible only with the political opening of the Geisel government. By taking advantage of the loosening of the authoritarian repression, the labor movement was able to mobilize the rank and file and to develop their own organizations and strategies. New unionism established itself through the CUT and the CONCLAT (CGT in 1986) and organized the DIAP (labor lobby organization in the Congress which was created in late
1983) before the transition in 1985. When the time for the reform came, the labor movement was well poised to respond to the government reform proposal. The task of internal organization, the articulation of demands, discussions on the labor issues already took shape. Labor did not have to spend their time and resources for the struggle for power among the competing tendencies and for the establishment of the identity of the labor m ovem ent in the New Republic.
Fourth, though limited in the degree of fair competition, the opposition had the chance to challenge the military regime and its party through the elections. The progressives and democrats had room for growth and success in the elections, because
Brazilian authoritarianism retained the political parties and the functioning Congress.
Their access to political institutions had not been completely blocked. Though under the heavy restrictions of the authoritarian government, the opposition jointly won a 57 majority of the Chamber seats in the 1982 election. The opposition parties (PMDB and
PDT) also won in 10 major states out of 22 states in the governor’s election in 1982.
The progressives, as the potential supporter of labor demands, constituted the
substantial part of the political elites.10
In sum, democratic transition in Brazil allowed the emergence of the combative labor
movement before the political transition, enabling the labor movement to emerge as an
independent new social and political force, and gave room for the labor movement to take
advantage of the fragmented political elite to promote the labor demands by lobbying and
public pressure. This was not part of the controlled project of the authoritarian elite. At
the same time, labor lacked unified political orientations, strong ties with the major
political parties or the government, and was divided on the fundamental issues of
political strategy and union structure. This signified that while labor lacked the power to
guide the reform process it had a sufficient capability to undermine the government
reform proposals it disliked. This also m eant th at the political elite were not able to
enforce their proposal due to the lack of cohesion among themselves and increased
resistance on the part of the union movement. The corporatist control mechanism began
to be dismantled by the mobilization of the workers and the politicization of the labor
movement even under the authoritarian regime (see Chapter 3). The labor law had been
eroded and ignored during the transition years. Under democracy this process was
accelerating due to the lack of government resources to induce concessions from labor
and due to the increased cost of the repression.
10 Out of 559 members of the CA most of whom were elected in 1986 (except the 22 senators elected in 1982), 166 were affiliated to the opposition MDB in 1979. 217 were affiliated to the government party (ARENA) in 1979. See Fleischer (1990:232). CHAPTER III
CRISIS OF THE CORPORATIST LABOR SYSTEM AND THE STRENGTH OF THE
LABOR MOVEMENT
The direction and the scope of labor reform depend on the effectiveness of the existing
corporatist labor control mechanism and the strength of the labor movement. This
chapter examines the degree of erosion of the corporatist labor system during the
transition years (especially 1978-85 period) focusing on the role of the unions, strike
movement, the role of the state in collective bargaining, and rank and file activism. The
fact that labor mobilization has been steadily increased during last 10 years
demonstrates that there occurred significant structural change in the environment of the
union movement. The structural source of the mobilization of the working class can be
attributed to the shift in the industrial structure of the economy and to the on-going
wage squeeze policy of the government. However, the shift in the structural environment
itself is not sufficient to explain the capacity/or lack of capacity of the labor movement
or lack of it to bring about labor reform. The internal resources of the labor movement
need to be examined to analyze the strength or weakness of the labor movement. If the crisis of the existing labor system signifies the need to replace and implant an alternative model of labor system, the strength of the labor movement constitutes the capability of the labor movement to lead the reform process toward its favored option.
58 59 CORPORATIST LABOR SYSTEM
The fundamental nature of the Brazilian labor system was established during the
Estado Novo, the populist regime of Getulio Vargas during the 1930s and 1940s. The
spirit of the Estado Novo was the containment of class conflict and the integration of the
working class into the state apparatus through the corporatist network of tutelage of the
state over the class organizations of both the employers and the workers. The role of the
state was overwhelming in providing a certain measure of protection to the workers
through a sophisticated and extensive machinery of legislation and judicial procedures, on the one hand, and the deprivation of the independent role of the labor unions, on the other. The philosophy of the Estado Novo was social harmony. Vargas proclaimed that:
The state rises above the struggle between the interests, guarantees the rights of the collectivity, and ensures the fulfillment of the duties. The state does not want and does not recognize class struggle. The labor laws are laws of social harmony (Getulio Vargas, recited in Humphrey, 1982:14).
To ensure social harmony the state played a dominant role in organization, finance, and mediation of labor conflicts. The five most fundamental characteristics of the
Brazilian corporatist system can be summarized as follows: 1) a single union principle
2) a vertical union structure 3) state-guaranteed union finance 4) direct ministerial control 5) the mediation of labor conflicts through the Labor Court. In all of these characteristics the state guarantees the unions a privileged status in representing workers in collective bargaining and the Labor Court. It ensured its organizational stability by allowing only one union in each territorial base. It also guaranteed the financial security through the union tax. At the same time the state prevented the development of independent union power by splitting the union hierarchy along economic and professional categories. Compulsory arbitration through the Labor Court 60 hindered the development of direct bargaining practices. Ministerial intervention in the
elections and internal operations of the unions enabled the state to replace the union
leaders and even cancel the recognition of the unions in question.
1 ) Single union principle: Only one union was recognized by the Ministry of Labor in one territorial base according to economic and professional category. Single union principle (unicidade), which automatically means exclusive representation, signified that competition in union elections was effectively limited to the non-militant groups.
Radical or militant groups were not able to legally establish their own organizations.
They were forced either to attem pt to gain control of the official bodies or to operate underground and build informal organizations (Mericle, 1977: 308). Under the watchful eye of state corporatism, winning union elections was not easy. Another implication is the lack of work place organization such as factory committees. This led to the weakening of the representation of the workers in the working places. Unions that cover large areas, such as the city of S3o Paulo had almost no access to so many work places. The interactions between the union leaders and the rank and file were designed to be little or none.
2) Vertical union structure: The unions in each territorial base(sindicatos) are linked at the state level in the federations which in turn are linked at the national level in confederations. It has no formal direct horizontal links with other union entities in other categories in the same area nor direct links with other union entities in the same category of other areas. The lack of horizontal organization prevented the union movement from developing a common political orientation or from engaging in collective action based on solidarity with other union entities. The union entities were effectively deprived of organizational bases to resist the unfavorable government policy. Another implication of this system was exceptional fragmentation due to narrow industrial definition and restrictive geographical jurisdictions. For example, workers in the food 61 industry in the city of SSo Paulo were represented by seven different sindicatos based on
industrial subdivisions during the authoritarian regime (Mericle, 1977:308).
Ministry of Labor Labor Court
workers' union employers' union CLT financial and Confederations organizational Confederations supervision and (national level) Federations guarantee Federations (state) Sindicatos Sindicatos (local)
union tax I exclusive representation
w orkers
Figure 2: Brazilian corporatist labor system
3) Union tax: In addition to the organizational structure that prevented unions from developing their own power resources, the state also controlled the finance of the union entities through the union tax. The union tax is the primary source of government- guaranteed financing. It is collected from all workers in the category regardless of the membership in the union. It is equivalent to the one day’s pay per year and deducted from 62 the payroll by the employers every March. The union tax was divided as follows at the
time of democratic transition in 1 985: 60% for the unions, 1 5% for the federations,
5% for the confederations, 20% for the Ministry of Labor.1 Other sources of income for
the unions included monthly dues from members, a special deduction made each time the
labor contract is renewed, income coming from service fees, and operation of the union
assets. But the majority of income came from the union tax. Even among the largest
union of S3o Paulo, government-guaranteed finance (union tax plus special deduction)
accounted for 59% of union income according to the survey made in 1972 by Mericle
(1977:315). The union tax cannot be used as a strike fund or for any other uses except
stipulated in the CLT 2. Those uses allowed in the CLT include job placement, maternity
assistance, medical and dental care, vacation facilities, social and sporting activities, and
funeral aid. Most of these activities were welfare related ones. Unions were supposed to
keep a very detailed record and to file annual reports which demonstrated that the government guaranteed-fund were used only for those activities.
This rendered the unions a welfare organization, rather than a class organization defending the workers’ interests. Due to the poor performance of the government in providing welfare services the unions became a major source of welfare service. Union leaders were bureaucratized by assuming the responsibilities of the technicalities accompanying these activities. Many workers joined the unions just to enjoy union-
1 The rate of the division has been changing. Before the 1976 the unions got 54% and Bank of Brazil got 6% as handling charges. Now the handling is made by Caixa Economica Federal, another government bank.
2 Brazilian labor law is called the CLT (Consolidagao das Leis do Trabalho: Consolidation of the Labor Law). It stipulates the general rules for the protection of labor (hours of work, minimum wage, annual leave, occupational safety and medicine), special rules for the protection of labor (employment of women and youth), individual collective contract of employment, management and elections of occupational organizations, labor courts, and labor judicial procedures. For the text of CLT translated into English see ILO, Legislative Series. No. 2 1985 63 provided-services. This led even the militant leaders, who opposed this kind of activity
by the unions, not to ignore the welfare function of the unions. The widespread
perception of the unions as a welfare organization contributed to the low political
consciousness of class interest. As a result, labor unions were transformed “from
active, if precarious, defenders of workers’ interests and rights to financially secure,
bureaucratic welfare agencies” (Humphrey, 1982:14-1 5).
4) Ministerial control of the labor unions: Brazilian unions under the corporatist
labor system were directly subject to the control of the Ministry of Labor. The unions had to be recognized by the Ministry of Labor to function, that is, to access government- guaranteed financing and to represent the workers in the Labor Court and in collective bargaining. The Ministry of Labor could, at its own discretion, suspend and replace union leaders and veto candidates wishing to run in union elections. It maintained the statutory power to regulate union statutes and oversee expenditures. In the corporatist system, unions functioned mainly as adjuncts to the Ministry of Labor, representing workers in the State apparatus and distributing welfare services. The government could cancel the official registration of the disruptive labor organization. The government also regulated voting procedures, the definition of the quorums, and affiliation to and disaffiliation from the federations.
5) Compulsory arbitration of the labor conflict: Corporatist labor system systematically obstructed the direct bargaining between the workers and employers. The conflicts between capital and labor were administered through the legal system based on the CLT (Consolidation of the Labor Laws) and the Labor Courts. Formally the CLT allows direct bargaining between the workers and employers without the intervention of the state. However, in case of the refusal to negotiate by either side the dispute would go to the Regional Labor Office for conciliation, and if that failed, to the Labor Court, where an agreement would be imposed by compulsory arbitration calleddissidio coletivo. In 64 practice, dissidio coletivo became a standard form of collective bargaining in Brazil until very recently (Humphrey 1982:15). During the Estado Novo, any conflict were supposed to be resolved by the mediating guidance of the state, and as a result, no provision was made for strikes (or lockouts) or even union presence in the work place.
Table 1: Five principles of Brazilian corporatist labor system: its implications and impact
Principles Implications Impact Single union principle Control of the defiant labor Dominance of the domicile groups union leaders Vertical union structure Fragmentation of the union Obstruction of the movement along the development of independent categories union movement Union tax: state-guaranteed No need to develop link with Underdevelopment of the union finance the rank and file class consciousness of the workers Ministerial control Arbitrary intervention Control of the defiant unions Compulsory arbitration Underdevelopment of the Low organizational capability through the Labor Court direct bargaining practices of unions
The lack of direct bargaining between the employers and workers also contributed to the low level of workers’ consciousness about the role of unions in defending the workers interests. The negotiation and preparation of negotiations give the workers the opportunity to examine their demands, the response of the employers and the government to their demands, and provide an occasion to raise their class consciousness through the negotiations and confrontations with the employers and the government. The lack of tradition of direct negotiation and the criminalization of the strike as an anti social behavior that hurt the social harmony prevented the union leaders and the rank and file from developing the capacity of pressure-politics, and from fortifying their organizational and mobilizational capability. 65 As the collective bargaining was based on judicial decision, the communication
between the rank and file and the leaders was formed along paternalistic lines. Unions did
not require the active participation of the rank and file. The lack of two way
communication and the distance between the union leaders and the rank and file were
fortified by the financial security of the union entities because of the union tax collected
from all the workers, unionized or not. Thus lacking the need to organize the rank and
file and to develop their own capability to pressure the employers and the government,
union leaders came to be preoccupied with the preservation of their positions and of the corporatist labor system as a whole. The activities of the majority of unions did not go beyond the juridical ritual (Silva 1990:9). Thus relying on the Labor Court for compulsory arbitration of labor conflicts led to the bureaucratization of the union leaders, performing the role relegated to the unions by the corporatist state.
EVOLUTION OF THE CORPORATIST SYSTEM
Despite its negative effect on the development of autonomous unionism, the corporatist system began to establish legitimacy in Brazilian society. The major part of it came from the fact that through the uniform application of the labor law at least minimal standard of protection of the workers was made possible. Those protections made Vargas the “father of the people (pa/de povo)”. In many cases the Labor Court heeded the demands of the workers so that employers were forced to comply with the rights stipulated in the law. Since the unions represented the workers in the Court, this generated an illusion that unions were playing an active role to protect the workers’ dem ands (Silva 1990:8).3
3 According to Silva, it was common for the workers to perceive that union gave them wage increase even when it was stipulated in the law (1990:8). 66 The frame of the corporatist union system did not change much even after the
democratization of 1945. With the fall of Vargas new labor groups emerged to mobilize
the workers. But the newly elected president, general Dutra, decreed the law that
curtailed the strike rights which had been allowed just several months before the fall of
Vargas in October 1945. The new constitution maintained the corporatist labor system
framework. The Dutra government banned the communist party in 1947 and imposed
strict control over the unions. During the final days of the Dutra government, 234
unions were under the direct control of the Ministry of Labor and the union elections had
been postponed from 1947 (Humphrey, 1982:18).
During the populist regimes in 1950s and early 1960s, the control of the Ministry
of Labor over the unions was relaxed, and the law was applied sparingly. The “dual
structures” were formed by the illegal but tolerated Comando Geral dos Trabalhadores and the citywide inter-union “pacts”. These “dual structures” (along with the official structure) were tolerated and encouraged because the populist regimes required labor support (Mois6s 1979:53). Union leaders were involved more with politics and economy on the national level than with matters within the firms. The leftists used the corporatist system under the populist regime as their power base to influence government policy rather than fortifying the unions from the bottom. This was possible because the ruling elite in the regime also needed the support of the working class, which was the basis for the populist coalition that pushed through the developmentalist policy. The battles were fought in national political scenes such as the agrarian reform, and the nationalization of the oil refineries.
At the same time, the emphasis on the organization of the rank and file was slight.
The labor m ovement was oriented to the political power linked to the state apparatus. The leaders of the labor movement gave much more importance to strikes for political gains
(for example, appointment of leftist leaders in the position of state enterprise) than to 67 the issues of wage and working conditions. The union leaders were gaining political
influence at the expense of their ability to mobilize workers in the private sector
(Humphrey 1982:19-22). Union leaders gave little importance to the question of autonomy and preferred to exercise pressure through the influence that they had in the state apparatus. Instead of enlarging and fortifying the practice of collective bargaining, the union leaders preferred to press the Labor Court in defense of their interests. This contributed to the reinforcement and legitimation of the Labor Court system (Turchi and
Silva, 1990:11-12). Populist regimes hindered the development of autonomous militant working class organizations in the work place by controlling the union leaders through co-optation, sympathetic rhetoric, and patronage (Erickson 1977).
The military coup of 1964 easily crushed the labor movement. Almost all strikes were made illegal and labor unions were under the strict control of the government.
Radical union leaders were arrested and many unions were under the intervention of the
Ministry of Labor. In 1964, 409 unions and 43 federations were put under the direct control of the Ministry of Labor. The intervention was focused on the big unions. The
Ministry of Labor intervened in approximately 70% of the unions with more than
5,000 members, 38% in the unions with members between 1,000 and 5,000, and 19% of the unions with less than 1,000 members (Turchi and Silva 1990:12).
A new strike law that made legal strikes practically impossible was passed in July
1964. After the initial period of direct ministerial control, unions were allowed to elect new officers and to return to “normal” functioning. Selective intervention was enough to warn and demobilize any union and union leader who were contemplating challenging government policy. The military regime installed additional measures to streamline the demands of workers in order to serve faster capital accumulation. The law decreed in
1966 reduced the role of the Labor Court in determining wage settlements by providing 68 an official inflation index. From this point on the wage policy was strictly subordinated
to overall economic policy.
Another law was introduced in the same year to regulate job security. The FGTS
(Time-in-Service Guarantee Fund) replaced the (Employment) Stability Law. It differed from the old law in two major respects (Humphrey 1982:44-47): 1) It removed the special protection afforded to workers with more than ten years of employment in the same firm. The old law gave such long-service workers the right to remain in employment unless dismissed for committing a grave error. In the new law the protection against dismissal was guaranteed only to workers elected as union executives; 2) Under the FGTS workers received the same amount of money (equal to one month of wage for each year employed) as the old law. The difference was financing. For each worker the firm pays 8% of the basic wages into an account each month. The employers’ burden was lessened by canceling out other taxes totaling 6.25% of wages.
When a worker is dismissed without just cause the firm adds 10% to the amount in his account and the total sum is paid in compensation. The overall effect was that it allowed employers to cut back on employment more easily in times of recession, to fire militant workers, and to reduce the labor cost.
Both the populist democratic regime and the authoritarian regime after the 1964 coup did not touch the structure of the corporatist labor system. Both regimes needed to control the development of an independent labor movement. Populist political elites needed to control the workers while mobilizing them. The corporatist structure was an ideal system in dealing with the defiant union leaders because it gave the government all the power to intervene in the unions and to remove the unwanted union leaders. The authoritarian elite also did not have to shake up the existing system, because it was designed to control the independent labor movement from the start. What was necessary 69 after the initial large scale repression was intervention in the target unions as a sign
that challenges from other unions would not be tolerated.
The corporatist system remained valid until the democratic government was installed in 1985. In March 1985, Labor minister Pazzianotto liberalized the union elections, restored the expelled union leaders, and recognized the legality of the peak labor organizations. He also kept his promise not to intervene in the unions even in the case of illegal strikes. His reform efforts were thw arted by the still valid old constitution which had been effective until 1988 when the new constitution was promulgated. Pazzianotto failed to push through his reform project other than the ones under his authority. These measures were possible to enact because it was made with portaria (ministerial regulation). Other reform items that needed the approval of the
Congress were not successful mainly due to the lack of support of the labor organizations. The ties between the state and unions were severed in practice, though not legally. The unions became free of state supervision through the constitution of 1988.
The unlimited strike right was guaranteed. But the major setback of the reform was the maintenance of the corporatist shell, that is, the single union system and the union tax.
The vertical union structure is still in force.
CRISIS OF THE CORPORATIST LABOR SYSTEM
The corporatist labor system began to suffer a loss of legitimacy with the reinvigoration of the labor movement since the 1978 mobilization. During the final days of the authoritarian regime, the crisis of the corporatist labor control mechanism, while still effective in repression in the short term, propelled the idea that the old system needed to be reformed even by the conservative politicians and part of the employers with more liberal orientations. The process of disintegration of the 70 corporatist system during the transition period can be examined in five major aspects:
1) the increased frequency of strike movement 2) the union structure 3) union
ideologies 4) collective bargaining 5) the factory committee.
STRIKE MOVEMENT
The strike was made practically impossible to carry out under the authoritarian
regime. The strike had been seen as an anti-social activity that disturbed social peace.
The strike laws under the military regime imposed restrictions that were practically
impossible to observe (such as the quorum of 2/3 of the union members in the general
assembly) and prohibited strikes in the public sectors and in “essential” activities. The
victory of the automobile workers in the ABC area, the most advanced economic sector of
Brazil, contributed to the perception that striking was the most effective weapon to
defend workers’ interests. The mobilization of the workers since 1978 increased their
class consciousness and their experience with large scale mobilization, helped them
articulate a list of demands, and cultivated combative attitudes. One of the basic tenets of
the corporatist labor system, that is, the control of labor mobilization, was challenged
and state repression did riot have much effect in the long term.
The most notable phenomena were: 1) the acceleration of strikes since 1978 across
all of the economic sectors including the middle class sectors; 2) explosion of strikes in
the formerly prohibited sectors such as in the public administration and in the sectors considered “essential”.
As Table 2 shows, the number of strikes increased almost 20 times in 10 years.
During the 1973-77 period only 12 partial or total strikes occurred (Mois6s
1979:66). In 1978 this increased dramatically to 118. By 1984 when the democratic transition was almost over, it increased to 492. In 1978 strike activity was led by 71 workers in the private sector (91.5%), especially by the metal workers (53.4%), and was concentrated in the state of S3o Paulo.4 The strikes of the metal workers affected the other categories and regions. In 1979, in addition to the metal workers (18.3% of the strikes, 31.1% of the lost hours) civil construction workers (8.1%, 10.5%), bus drivers and collectors (8.9%, 3.0%), medical doctors (7.7%, 2.7%), teachers and professors (9.3%, 35.4%) joined the strike movement. The strike movement was halted during the 1981-82 recession. Renewed government repression against strike activity, the hardening of the position of employers, the increase in unemployment due to the harsh recession, and retreat of political opening during this period obstructed the further spread of the strike movement during 1980-82.
Table 2: Number of strikes in urban areas (1978-87)
Years Industrial Middle class Service Others Total sector sector sector 1978 92 8 13 5 118 1979 97 55 50 44 246 1980 62 43 21 18 144 1981 48 48 20 34 150 1982 77 31 25 11 144 1983 199 85 47 16 347 1984 335 84 62 11 492 1985 269 211 125 14 619 1986 579 237 187 1 1,004 1987 832 787 567 7 2,193
Source: NEPP/UNICAMP, Noronha, 1989:129 Note: Industrial sector includes workers in the metal, civil construction, chemical, food, urban sectors. Middle class sector includes public sector (governments of municipal, state, federal levels, and other public agencies), schools and universities, hospitals, and banks. Service sector workers includes drivers, commercial workers, health workers, school employees other than teachers and professors, post office employees.
The strike movement was revitalized from 1983 with the recovery of economy. The strikes in the private sector were localized at the firm level in most cases and were
4 All the data on the strike movement come from Noronha (1991). 72 short in duration due to the still lagging economy. The threat of unemployment made massive strikes difficult. During the 1983-84 period public sector employees not only increased their strike activities up to almost 30% but also were responsible for most of the lost hours (82.5% in 1983). It was due to the longer duration of the conflicts and the large number of participants in the category. The strikes lasted longer in the public sector due to the fact that public employees were less subject to the threat of dismissal than private sector workers and the government was more restricted in conceding the demands of public employees. Public employees who had been prohibited from unionization and strike activity were effectively conquering the right to strike in practice.
Table 3: The number of lost hours by sector in urban areas (1978-87)
(unit: 1,000 hours) Years Industrial Middle class Service Others Total sector sector sector 1978 999 1,154 7 4 2,163 1979 10,779 14,363 1,307 178 26,627 1980 11,499 11,954 279 493 24,226 1981 1,609 3,571 279 1,085 6,545 1982 1,406 5,250 221 90 6,967 1983 1,571 26,100 726 11 28,408 1984 2,796 10,191 289 35 13,31 1 1985 21,139 66,383 2,525 591 90,638 1986 8,274 38,613 2,634 5 49,526 1987 12,286 100,309 19,781 70 132,445
Source: NEPP/UNICAMP, cited from Noronha, 1989:130
All these years during 1978-87 metal workers led the strike movement with 25% of the strikes in the industrial sector, followed by civil construction workers (5.5%) and the chemical workers (3.7%) In the middle class sector, public employees of the governments (ministries, secretaries) led the strikes with 10.5%, followed by 73 teachers/professors (9.6%) and medical doctors (4.3%). Strikes in the service sector
were led by bus drivers (8.4%) and commercial workers (8.3%). The role of metal
workers decreased from 53.4% of 1978 to 15.7% of 1987 (Noronha 1991:129-131).
A notable increase in activity was made by the public employees of the governments and
by the teachers/professors. The strike of public employees steadily increased from
4.2% in 1978 to 1 5.4% in 1987. The strike of teachers/professors showed a similar
pattern.
Table 4: The proportion of the public and private sector in the number of strikes and lost hours in urban areas (1978-87) (%1 Year Number Of Strikes Lost Hours Public Sector Private Sector Public Sector Private Sector 1978 6.8 91.5 24.0 73.8 1979 15.4 74.8 19.6 55.9 1980 22.9 65.3 35.5 55.2 1981 26.7 58.0 53.9 34.8 1982 27.8 67.4 65.9 24.9 1983 29.0 69.7 82.5 17.4 1984 23.0 75.6 82.7 16.8 1985 31.2 67.1 73.6 20.3 1986 24.2 71.9 75.6 21.4 1987 38.3 61.4 80.4 14.7
Source: NEPP/UNICAMP, Noronha 1991:129-131
Thus, one of the major characteristics of the strike movement was the growing participation of the middle class sector (mostly the public sector) in the strike movement while the metal workers still led the strike movement in terms of the number of strikes. The participation of the middle class sector demonstrates the shift of horizon of the labor movement in Brazil. Almost all the economic sectors were mobilized and collided head on with the corporatist system. 74 UNION STRUCTURE
In the corporatist structure, only one union was allowed in each territorial base and
the union tax was collected to finance the union entities. These unions were organized
vertically from the local level unions (sindicatos) to the state level federations and
national confederations. Horizontal organization of the unions was not allowed. Though
the principle of a single union system and the union tax is still effective as of early
1994, the reality of the Brazilian labor m ovement breached the spirit of the corporatist
system in two respects: formation of both horizontal and plural peak labor organizations.
These two elements were alien to the corporatist labor system.
Two peak labor organizations were organized in 1983. The CUT represented the radical union entities while the CONCLAT (Coordenagilo) represented moderate groups.
The CUT wanted to give more space to the union opposition and tried to reduce the role of the official union structure. The CUT emphasized the active participation of the rank and file. The CONCLAT was in favor of maintaining official union structure. The participants in both organizations represented the differing orientations. In the creation of the CUT many union oppositions (134 pre-union associations) participated together with the
665 urban and rural unions. In CONCLAT pre-union associations were limited to 43 entities. While only one confederation and 5 federations participated in the CUT, five confederations and 66 federations participated in the CONCLAT (CEDI 1986:54,59). As a result, while the single union principle has been maintained at the union base level
( sindicato), hybrid system was created in which top level pluralism coexisted with the single union principle at the base level. The hybrid system was officialized by the legal recognition of the CUT and CONCLAT in 1985 by the new government. 75 UNION IDEOLOGIES
Under the corporatist labor system, unions functioned as a welfare organization run by the union tax and as an adjunct state organization closely controlled by the Ministry of Labor. Unions were intended to cooperate with the public authority to ensure social peace and class harmony. Union ideologies began to change with the emergence of the
“new unionism”. The new brand of unions saw their role as defending class interests.
The strike weapon was seen as essential to defend the working class interests. The demand of the unionism was not limited to the wage issues. In the early days of mobilization the leaders of the S3o Bernardo Metal Union realized that the real issue was not a matter of determining the percentage of wage increase, but the political barriers that restricted the free activity of unions. The following remarks by Lula, the president of the Metal Union of the S3o Bernardo do Campo, represent the new identity of the
Brazilian working class, that is, the distrust of the state, belief in the independent unions and in the power of the rank and file, the appreciation of the strike weapon, and disrespect for the legal frame:
“Today the worker does not believe in that (political leadership of the politicians) any more. Today he believes more in his own strength. ... the most important thing was not 34% raise demand but the restoration of union freedom. ... Everything that the government had claimed up to then (May 1978) was a lie. Without pressure I don’t believe that the managerial class would agree to negotiate with us. ...I had talked to more than 40 factory managers and none of them conceded a thing. But when the machines stopped, they gave in. ...the fundamental question is the lack of liberty. And it has to be won, it can’t come through law.... The legality of the movement would come from the movement itself. If it was victorious, it would be legal. The union leaders should not assume the responsibility of resolving the problems of the working class: ..it’s the workers who will resolve the problems” 5
5 “Interview with Luis ln3cio da Silva (“Lula”), president of the sindicato dos Metalurgicos de S3o Bernardo do Campo”, Latin American Perspective, v.6 no.4: 90-95 76 Political and economic demands that were far beyond the labor issue per se were made by
both the radical and moderate groups. For example, in the founding congress of the CUT
in 1983 the list of demands were more general political ones, such as “ample, massive,
radical agrarian reform,” the non-payment of foreign debt, rejection of the
privatization of state enterprises, and direct election for the president. Moderate
CONCLAT groups also demanded agrarian reform with the participation and the control of
workers, a unilateral moratorium on the foreign debt, end of the wage squeeze, end of the
military regime, the direct election of the president, and revocation of all of the
repressive laws (CEDI 1986:52-59).
The politicization of the labor movement was most telling in the creation of the PT
(Workers’ Party). The distrust of existing political parties and the need to represent
workers’ interests in national politics led “authentic” union leaders (mostly leaders of
the Metal Union in S3o Bernardo) to form the PT with the alliance of forces of the social
movement (Catholic activists, neighborhood activists) and leftist intellectuals (Keck
1 9 9 2 ).
On labor issues, the founding congress of the CUT in 1983 adopted platforms calling
for unrestricted right to strike, union liberty and autonomy, change of the corporatist
union structure, and recognition of the CUT as the most representative organization of
the working class. It also proposed the formation of a permanent committee in the work
places as “a channel of transmission of the decisions of the union assemblies and of
integration of workers in the company to the struggle of all the workers” (Rodrigues
1991:34). It also approved the general strike in case the government would not change its economic policy. The first congress of the CUT in 1984 (CONCUT I) proposed the creation of a new democratic union structure with autonomy and liberty, union 77
organization by the production branch®, and the substitution of the CLT with the
minimum labor code. In subsequent congresses of the CUT in 1 986 and 1988 similar
demands were made.
The CONCLAT of the moderate groups also defended union liberty and freedom,
formation of inter-union organizations especially at the state level, while giving
emphasis to the inclusion of federations and confederations. The CONCLAT was different
from the CUT in emphasizing the unity of labor through existing organizations while the
CUT was more oriented to the participation of the rank and file and work place
organizations.
All of these proposals and demands of the new union movement went well beyond
previous dependent role of unions. The new combative form of unionism, while divided,
successfully established its status as the legitimate representative of the Brazilian
working class. Even the official union structure was forced to participate in the new
grouping of the labor movement. Their demands represent the new role of the unions as
independent class organizations, as active participants in the definition of national
politics and economic policy, and as forces of democratization of the country.
COLLECTIVE BARGAINING
The union movement attempted to organize and mobilize their forces with the aim of
direct bargaining with the employers, making sure that collective bargaining came to
6 Union organization by production branch is different from the existing union organization by the professional and economic category. In the existing system, the electricians who work in the automobile industry belong to the electric workers unions. Thus while m ost of the workers belong to the metal workers union, a substantial part of the workers are split by professional and economic category, thus having the effect of dividing the mass of workers. Organization by the production branch signifies the inclusion of all of the workers in the automobile industry in a single union regardless of the category, thus enhancing the mass base of union power. 78 play a central role in the function of unions. The daily labor conflicts since the
mobilization of 1978 made the conflicts between workers and the employers appear as normal and no longer anti-social behavior (Silva 1990:10). The widespread use of strikes as the sole effective and available weapon under the repressive regime contributed to eliminating one of the important barriers for the development of the practice of bargaining, that is, the refusal to bargain on the part of the employers.
Expansion of the practice of collective bargaining signifies the limit to managerial power and democratization of labor relations within firms.
Collective bargaining carries political connotations, implying a power relationship between two classes that confront each other in the production process. Through collective bargaining, some of the basic decisions of management come to be negotiated, not allowing employers to determine them unilaterally. Disrespect for norms can bring in paralysis in the production process. Collective bargaining establishes periodic agreements that assure the normality of the production process (Silva 1990:12).
Traditionally collective bargaining in Brazil occurred in a tripartite form, with the
Ministry of Labor, through its Regional Labor Office, convening the employers and the workers to the bargaining table to reach a conciliation. Agreement was reached rarely.
So the m ost common pattern was resort to the Labor Court. With the development of collective bargaining, the state was seen as potentially harmful to the agreement and the state began to be put aside. Through this new practice, the unions were conquering a status as autonomous institutions while undermining the legitimacy of state intervention. The breaking point was the strike of May 1978 by the metal workers in
Sao Bernardo. Although the Regional Labor Court ruled the strike illegal, employers represented by the National Union of the Automobile Industry decided to directly bargain with the union that ignored the limits of the wage policy imposed by the state. The conception of direct bargaining in the absence of the state was a new fact. According to 79 one study the court decisions in S3o Paulo dropped from 36% in 1979 to 10% in 1981,
while accord increased from 64% to 89% (Turchi and Silva 1990:16).
Another change was an increase of labor demands. Collective contracts began to
include clauses specifying overtime hours, sanitation and safety measures, extra hours,
as well as the wage level, allowing union leaders to access the factories, providing job
security to the members of the factory committee, permitting union activity during
working hours. Until the middle of the 1970s, when the judicial decision prevailed, the
union conquests were restricted basically to the wage issues. At the end of the 1980s,
collective convention came to contain more than 100 clauses, including working hours,
working conditions, holidays, overtime, union rights and social benefits, etc. In the
early 1970s typical labor contracts contained only 7 or 8 clauses. In the 1980s the
clauses increased to average 80 items (Turchi and Silva 1990:36).
With the increase of direct bargaining, the primary union preoccupation has
changed. Formerly unions focused their action on legal matters. Their principal
interlocutor was the Labor Court and the legal department of the union was of major
importance. The central preoccupation of the unions was to have a strong legal department, capable of finding a way of applying law in the workers’ favor. Now the
main concern of the unions changed to fortifying their mobilization and bargaining capabilities (Turchi and Silva, 1990:32-33).
But the compulsory arbitration of the Labor Court still remains valid. With the normative power of compulsory arbitration still available, the parties of bargaining are not strongly induced to reach an agreement, making bargaining difficult. In addition to the lobbies of the Labor Court to maintain that system, the most demobilized sectors of both the employers and union movement fought for the continuity of the normative power of the Court (Silva 1990:13-14). The role of the Labor Court system is still being 80 debated in the national press, with the main focus on the role of the Labor Court as an obstacle to the deepening of bargaining practices.
Another development in collective bargaining has been the decentralization of bargaining practice. In law, only the union in a given area (or in case union does not exist in a given area, federations or confederations can take up the bargaining) can be a bargaining entity, but in practice most of the bargaining had been done at the firm level.
According to one study, out of 15,000 agreements registered7 between 1978 and 1984,
70% of the agreem ents were made at the firm level and only 30% were made at the union level (Silva 1990:14). This corresponds to the strike pattern. Almeida
(1988:336) found out that out of 1,521 strikes in the industrial sector between 1978 and 1986, 88.8% of the strikes occurred at the firm level.
On the other hand, there is also a tendency toward a centralized bargaining practice.
Employers are resolutely in favor of centralized bargaining at the level of the branch of productions. Employers’ unions affiliated to the FIESP do not have autonomy to bargain.
All the bargaining is coordinated directly by the Union Department of the FIESP. They want to maintain unity and standardization in the bargaining process in order to prevent concessions made at more financially endowed firms from adversely affecting bargaining in the less fortunate firms. On the other hand, union leaders are also not in favor of the predominance of bargaining at the firm level. The reasoning behind this is that the greater the number of workers involved in bargaining, the greater pressure the unions have vis-a-vis the employers. The workers in the small and medium sized firms using old technology, who do not have strong bargaining power, can enjoy better wages and working conditions through centralized bargaining. Agreements at the firm level have
7 The bargaining for the whole workers of the base union is annual and obligatory. During the period in which collective convention (at the category level) is in force, the union can bargain with the firms. In order to have legal validity all the agreements have to be registered in the Ministry of Labor. 81 different effects depending on the bargaining power of the workers’ union and the
financial situation of the firms. Workers can be better off if the firm is making profits
and the union is strong enough to draw concessions. On the contrary, workers can suffer
if the unions are weak or the firm is not making enough profits. The centralization
tendency has been observed by the fact that during the 1979-82 period, 30% of
bargaining relied on the participation of federations and confederations (Silva
1 9 9 0 :1 6 ).
In either case (decentralized or centralized bargaining), the role of the state through the compulsory arbitration of the labor court has been diminished substantially compared to standard practice during the authoritarian regime. Bargaining practices are made independent of what is stipulated in the law. The extra-legal aspects of the evolution of bargaining practices reflect the process of the fluid and dynamic nature of the relations between the practice and the validity of the law. Laws do not hold much binding force in reality and this has contributed to the fact that both employers and workers do not give much weight to the institutionalization of new practices or the replacement of the existing law. Overall, as direct negotiation enhances the role of labor organizations at each level (from the base union to peak organizations), union entities are gaining much greater influence in the Brazilian labor system.
FACTORY COMMITTEE
The factory committee has the principal objective of representing the workers in the work place. It is formed by the workers elected in the assemblies in their work places. It means the diminution of managerial power and the increasing weight of workers in labor disputes in the work places. It enhances the participation of workers in labor issues. Its development narrows the distance between the rank and file and union leaders. The 82 leaders of the factory committee are likely to be union leaders sooner or later. Thus the development of the factory committee represents not only the democratization of labor relations in the work place but also rank and file activism. The factory committee emerged as the organized expression of the resistance of workers against factory despotism. In the 1978 mobilization, the factory committee was the commanding organ of the workers.
“The factory committees were, in that moment, a big sindicato, decentralized, democratic, independent of the state and greatly representative. They were not only against the low wages, but also against the union that was not representative, against the union top leadership, against the harness, practicing the idea of the direct representation of the workers and of the direct bargaining with the employers” (Rodrigues, Iram 1991:148).
The union opposition, with the strong influence of the Catholic church, had defended the organization of the workers inside the factory during most of the military regimes. This group defended democratic unionism and the formation of the factory committee, and called for the union liberty and autonomy and the end of the union structure implanted by the state. The Metal Union of S3o Bernardo which led the 1978 mobilization was also very emphatic on the role of the factory committee.
“The factory committee represents the overcoming of the old problem of the workers’ organization: incorporation of more workers in the struggle The factory committee plays the role of the vanguard organization of the true unionism.” (Third Congress of Metal Unions of S3o Bernardo in October 1978, cited from Rodrigues, Iram 1991:151)
Despite the employers’ resistance, workers began to press for the establishment of the factory committee. Between 1983 and 1985 119 strikes in the state of S3o Paulo had included a demand for the establishment of factory committees. Thirty six of these strikes were successful in regard to this demand (Silva 1990:11). One preliminary survey identified the number of factory committees between 1978-88 as 263, most of 83 them (85%) belonging to the metal sector. The existence of the factory committee was also noticed in electrical, chemical, glass, ceramic, plastic, and rubber sectors. They were dispersed in many states such as the state of Bahia, Pernambuco, Rio Grande do Sul,
Rio de Janeiro, and S3o Paulo. According to Iram Rodrigues (1991:156) these numbers are much less than actually exist. For example, the drivers in the city of S3o Paulo who had one “garage committee” in the above survey had 33 according to the Drivers’ Union of S3o Paulo. The factory committee in the metal workers in the state of Rio de Janeiro which numbered 7 numbered 34. In 1989, factory committees represented 46% of the workers in S3o Bernardo do Campo e Diadema (Rodrigues, Iram 1991:156).
Factory committees, however, while reflecting new characteristics in union practice, did not spread as widely as was expected for two reasons. First, employers still maintain authoritarian attitudes within the work place. Second, the emergence of factory committees had different implications depending on the attitude of union leaders in regard to the existing union structure. Union leaders affiliated to the CUT encouraged the formation of factory committee while the union leaders affiliated to the CGT distrusted factory committee, considering it as a potential power contender, and did not support their creation ( Rodrigues, Iram 1991:166)
STRUCTURAL SOURCE OF THE CRISIS IN THE CORPORATIST LABOR SYSTEM
The corporatist labor system has not been completely overcome or surpassed. The corporatist shell comprising the single union principle and the union tax still remains valid despite the challenges of the radical labor movement. However, state corporatism designed to control the development of the independent labor movement lost its effectiveness even under the harshest repression of the old regime. Formally it contains 84 the remnant of corporatism but combative unionism successfully established itself as the legitimate and representative organization of the working class. The fundamental source of the crisis of the corporatist labor system is obviously the mobilization of the workers at the end of the 1970s. The political opening and liberalization measures of the regime helped the unions to raise their voices. However, mobilization itself does not explain the steady increase and persistence of mobilization over 10 years. This is illustrated by the fact that the spontaneous revolt of the workers in 1968 was quickly crushed by the military regime. The reason why labor mobilization became one of the permanent marks of the last decade should be found in the structural changes in the
Brazilian economy, especially the changes in the organization of production and the wage squeeze policy of the authoritarian regime which encouraged permanent mobilization of the workers after 1978.
STRUCTURAL CHANGE OF ECONOMY
The corporatist labor system in Brazil dating back to the 1930s was created when the Brazilian economy was not yet industrialized. The Brazilian economy has changed from being a rural economy to an industrialized economy during the last five decades.
The change in the proportion of the population who work in the primary and secondary sectors and the change in the proportion of GDP each sector produces reflects the transformation of the Brazilian economic structure. In 1950 the population working in the agricultural sector (including cattle raising) was almost 60% of the economically active population, which was reduced by half by 1980. In contrast the population of industrial workers increased from 13.7% in 1950 to 24.9% in 1980. The tertiary sector increased from 26.4% in 1950 to 45.8% in 1980. The economic importance of the industrial sector is much more impressive. In 1950 the agricultural sector 85 produced 24.3% of GDP in 1950, which dwindled to about 10% in 1980. The industrial
sector increased its share of GDP from 24.1% in 1950 to 40.6% in 1980. The tertiary
sector maintained about the same level at half of GDP over the years.
Table 5: Portion of GDP and EAP by the economic sector (1950-1990)
Economic 1950 1960 1970 1980 1990 sector GDP EAP GDP EAP GDP EAP GDP EAP GDP EAP Agriculture 24.3 59.9 17.8 54.0 11.6 44.6 10.2 29.3 9.3 22.8 Industry 24.1 13.7 32.2 12.9 35.8 18.0 40.6 24.9 34.2 22.7 Service 51.6 26.4 50.0 33.1 52.6 37.4 49.2 45.8 56.5 54.5 Total 100 100 100 100 100 100 100 100 100 100
Source: IBGE: 0 Traco Da Desiqualdade Social No Brazil. 1993
Brazilian society also changed from a rural to an urban society during the last 50 years. In 1940 the proportion of urban population was 31.2%, which increased to
44.7% in 1960, 55.9% in 1970, and 67.6% in 1980. In 1991 it increased to 75.5%.
(IBGE 1993:14) In short, the economic and social structure in Brazil was moving from an agricultural to an industrial economy, and from a rural to an urban society during the last five decades. This meant that more people were living in an environment in which communication was easier and collective activity was facilitated by the common social and economic experiences in their localities and work places.
Industrial developm ent after the second World War transformed the Brazilian economic structure. One of the results of the increasing industrialization of the economy was that large modern firms became more prevalent in Brazilian industry during the post-war period (Erickson 1982:31-36). The number of workers in large and modern firms that produced intermediate, durable consumer, and capital goods - dynamic sectors of the economy (metallurgical, rubber, chemical, mechanical, electrical, communication equipment sectors) increased more rapidly than the traditional sectors 86 (timber, furniture, leather, textiles, shoes, beverages). Between 1949 and 1974 the
proportion of workers in the traditional sectors in the state of S3o Paulo dropped from
60.1% to 33.3% in 1974. During the same period, the proportion of workers in the
durable consumer good and capital good sectors increased from 6.7% to 29.6% in 1974
while the proportion of workers in the industrial sector of intermediary goods
(metallurgical, paper, rubber, chemical sector) remained the same level at around
33% (Humphrey 1982:31-36).
The Brazilian labor law was conceived as a preemptive measure to control and coopt
the working class by providing national level protection to all workers. The development
of modern industry made this scheme less effective. According to Almeida, CLT’s detailed,
all encompassing regulations and industry-wide union pattern were designed for more
uniform conditions of the small and medium plants, the most typical factories prior to
the late 1950s when the capital goods and durable consumer goods sectors expanded. 8
During 1968-73, Brazil experienced the “economic miracle" with 12% average
annual increases in GDP. The overall growth was largely due to the growth of the
industrial sector. The development model of the military regime was defined as
“productivist”. Foreign capital and multinational firms which were supposed to
produce with greater efficiency played a major role. Multinational corporations dominated the production of durable consumer and capital goods which boosted the growth
rate (Table 6), while intermediate goods and nondurable consumer goods were dominated
by national private capital (Alves 1986:108-110). Workers in the numerically expanding, large scale, capital-intensive factories found the CLT a burdensome anachronism. Workers in the modern sector believed that they would do better in direct
8 Maria Herminia Tavares de Almeida, “0 sindicato no Brasil: Novos problemas, velhas estruturas,” Debate e Critica, no.6 (June 1975),14-33, recited from Erickson (1 9 7 7 a: 1 72) 87 bargaining with employers at the plant level. Sectoral agreements were not advantageous to these advanced sectors.
Table 6: Annual rate of increase of industrial production (1962-80)
Year Total Industry Durable Capital Goods Nondurable Intermediate Consumer Consumer Goods Goods Goods 1962-67 2.6 4.1 2.6 0.0 5.9 1967-70 11.9 21.6 13.5 0.8 13.7 1970-73 13.5 25.5 22.7 9.1 13.2 1973-76 9.1 10.3 13.0 4.8 8.7 1976-80 6.4 8.6 3.4 4.1 8.0
Source: CUT, Debate Sindical. No 12, September 1991:10
It is no wonder that the mobilization of 1978 was launched by the automobile workers in the industrial belt of the ABC region, where more skilled workers were located9 and demanded to participate in the profits automobile industries were making.
Sao Bernardo do Campo, the origin of the 1978 mobilization, was “one industry and one union town.” Many workers worked in a small number of large firms. In the industrial belt of S3o Paulo (ABC region), many of the workers worked in large plants. Out of
46,000 workers in Santo Andre 48.6% worked in 10 large plants (which hired more than 1,000 workers each), 67.2% of the workers in S3o Bernardo (total 125,000) worked in 15 large firms, and 80.4% of the workers in Sao Caetano (total 20,000) worked in three large plants (Humphrey 1982:51).
9 According to the study of Humphrey (1982:69), in the two plants he surveyed, skilled workers occupied 24% of the total labor force, semiskilled 46%, and unskilled 20%. 70% of the workers were semiskilled and skilled workers who were difficult to replace in case of work stoppage. 88 Behind the large scale labor mobilization which was sustained for a whole decade
there existed an infrastructure which made it possible for the large number of workers
not only to employ collective action but also to maintain its vigor. The increase in the
strategic importance of the modern sector in the economy which enhanced the bargaining
position of the workers, the increased prominence of large scale plant that facilitated the
collective action, and the increase in the number of workers in the industrial sector were the fundamental cause of labor mobilization during the last decade.
WAGE SQUEEZE
Whereas the transformation of the economic structure constitutes the background for the labor mobilization, the decrease in the real income of workers has been the cause of their continuing revolt. The wage squeeze policy of the authoritarian regime and the pent up grievances of the workers were the main reason why the workers with low political and class consciousness participated in the strike movement spontaneously. The economic model of the authoritarian regime was based on a strict wage control policy and limitations on worker’s bargaining rights. The wage laws established in 1965-66 were intended to regulate wage increases and to facilitate capital accumulation. This wage control policy had eliminated collective bargaining over salaries between workers and employers and instituted an automatic wage-settlement system. Until 1979 the system had been operating under a federal decree that established an index for an automatic, annual official wage increase. A study by DIESSE in 1976 found out that 46% of the workers suffered more than 30% wage losses compared to 1965 (Alves 1984:74). The real minimum wage also dropped by 1986 to almost a half of what it was at the time of the military coup (1964). 89 Table 7: Index of real minimum wages
1960 1964 1968 1972 1976 1980 1984 1986 100______92______70 ______65______56______62 52 50
Source: Boletim do DIESSE. recited from Payne, 1991:227
This wage squeeze was brought about by the underestimation of the past and future
inflation rate and of the allowance for productivity (Humphrey 1982:41). Thus the
increased productivity and economic growth during the military regime resulted in a
worsening of the distribution of the income. The richest 10% of the population increased
their share of the total national income from 39.5% in 1960 to 46.7% in 1970, and
50.9% in 1980. The share of the poorest 50% steadily decreased from 17.7% of 1960,
14.9% of 1970, and 11.6% of 1976 (Alves, 1984:74).
Table 8: Major reasons of the strike (urban areas)
Demands made at least once during 1978-79 1980-84 1985-86 the strikes Wage readjustment 71.7 47.2 74.3 Non-observance of the law and 12.9 33.4 17.6 agreement Job security 0.5 16.1 14.4 Working conditions (working hours, 11.0 12.4 22.7 health, security, etc.) Bonus 6.3 7.7 20.0 Welfare within the firm 6.0 2.7 7.7 Union power 5.8 9.2 9.5
Source: NEPP/UNICAMP, Noronha, 1987:145
Table 9: Inflation rate (1977-89)
1977 38.6(%) 1981 92.8 1985 241.4 1978 40.5 1982 99.2 1986 63.3 1979 76.8 1983 212.9 1987 412.1 1980 108.5 1984 225.6 1988 1040.5 source: FGV, cited from APEC, A Economia Brasileira e suas Perspectivas. 1992: E-1 90
Another mechanism of the wage squeeze was inflation. The importance of demands for
wage adjustment for inflation in stimulating the strike movement is clear in Table 8.
During the 1978-79 and 1985-86 periods the demand for wage readjustment appeared
in more than 70% of the strikes. During the 1980-84 period when the economy was in recession, wage readjustment demands dropped to 47% but more demands (33.4%) were made to observe the agreements already made. The Brazilian system stipulates that collective bargaining is made annually. The increasing rate of inflation (see Table 9) and the need to adjust the wage through direct negotiation between workers and employers
(despite the government index of wage increase which has been ignored by the workers) has institutionalized the strike movement.
STRENGTH OF THE BRAZILIAN LABOR MOVEMENT
The crisis of the corporatist labor system - its ineffectiveness, obsoleteness, and loss of legitimacy - plays an important role in a series of attempts by the government to replace it with a pluralist union structure (see Chapter 4). If it becomes apparent that the corporatist system does not work any more to control labor mobilization and to ensure stable labor relations, even the conservatives are likely to support the reform of the labor system. However, the scope and speed of the reform would depend on various factors such as the political opportunity structure and the pressure of labor or business.
The strength of the labor movement constitutes the backdrop of the labor pressure. The stronger the labor movement is, the greater the pressure that the labor movement can exert on the political elite. A strong labor m ovement has a greater chance of participating in top level negotiations or pacts, a greater level of responsiveness from the rank and file, and a greater chance of changing the labor relations system
(Valenzuela 1989:452). 91 The strength of the labor movement refers to the organizational and institutional
resources that are available to the union leaders. Valenzuela (1989:453-454) provides
the following indicators: a) density of union affiliation in the total labor force, or in the
key areas of economic activity; b) historical characteristics of union organization ( such
as state dominance, fragmentation, degree of centralization, funding source); c)
collective bargaining arrangement (the degree to which unions can organize collective
pressures to alter their respective labor market); d) link with the political parties; e)
relative weakness of the employers. Before we examine these indicators, we need to
understand the distribution of the unions by region and sector.
DISTRIBUTION OF THE LABOR UNIONS
The Brazilian union system includes both workers and employers and both urban and
rural sectors. The urban and rural sectors are more or less the same size in terms of
number of the unions. Workers unions number more than those of employers (Table
10).
Table 10: Distribution of the unions by the type (1987-88)
Type of union 1987 1988 Total numbers 9118 9120 Urban unions (%) 50.8 51.5 (employers union) 18.8 19.0 (employees) 28.2 28.8 (liberal profession) 3.8 3.7 Rural unions 49.2 48.5 (employers) 19.2 18.4 (employees) 30.0 30.1 Total 100 100
Source: IBGE, Sindicatos: Indicadores Sociais. v.2, Rio de Janeiro, 1988 92 Brazil is a country whose economic power is concentrated in the Southeast region
(which includes the states of S3o Paulo, Rio de Janeiro, Minas Gerais, and Espirito
Santo), especially in the state of S3o Paulo. The Southeast region produces 59.4% of the
GDP as of 1985. The state of S3o Paulo alone is responsible for 35% of GDP (IBGE
1992:1,046). The regional distribution of unions does not represent their strategic
importance to the economy. While the three backward regions (North, Northeast,
Centerwest including 20 states) produce 24% of GDP, the number of unions in these
regions constitute the 39% of the total labor unions. The Southeast region that produces
60% of GDP accounts for only 35% of the unions. The regional distribution of the unions gets pretty close to the distribution of economic power if we exclude the rural unions.
The urban unions in the Southeast and South regions occupy 71% of total urban unions while these two regions produce 76% of GDP.
Table 11: Distribution of Brazilian unions by region and economic sector
Regions Indust. Comm. Transp. Service Bank Rural Lib. Pro Pub. Em Total North 62 28 39 21 6 116 22 8 302 (20.5) (9.3) (12.9) (6.9) (2.0) (38.4) (7.3) (2.7) (100) North 247 142 89 66 31 1,137 84 32 1,828 east (13.5) (7.8) (4.9) (3.6) (1.7) (62.2) (4.6) (1.7) (100) South 973 221 137 128 80 620 116 78 2,353 east (41.4) (9.4) (5.8) (5.4) (3.4) (26.4) (4.9) (3.3) (100) South 409 219 80 91 73 675 85 117 1,749 (23.4) (12.5) (4.6) (5.2) (4.2) (38.6) (4.8) (6.7) (100) Center- 52 50 10 40 17 219 47 36 471 west .01-1) (10.6) (2.1) (8.5) (3.6) (46.5) (10.0) (7.6) (100) total 1,743 660 355 346 207 2,767 354 271 6,703 (26.0) (9.8) (5.3) .(3-2) . (3.1) (41.3) (5.3) (4 -1) (100)
Source: IBGE, 1988/MTb, 1990, recited from CUT, Retrato da CUT, 1991:46
The strikes in the more industrialized region have more impact on the economy in general than the ones in the less industrialized regions. The large concentration of the union organizations in the Southeast and South implies that the strikes in these regions 93 would be more significant. Given the vast territory of Brazil and heterogeneity of the
economy, national coordination of general strikes is very difficult. This means that in
evaluating the success/failure of general strikes it would be more realistic to look at the
responses of a few industrialized regions.
The political representation of the workers did not match their contribution to
economic production. The concentration of economic power in the two major regions does
not correspond to their political representation. In the Congress the Northeast is
overrepresented with 31% of the seats in the Chamber and 39% of the seats in the
Senate (Fleischer 1990:218) while its GDP contribution is only 14%. The political
representation of the Southeast is only 35% in the Chamber and 17% in the Senate,
whereas it produces almost 60% of GDP. The reverse relationship between political and
economic power was adverse to the promotion of the labor reform which the labor
movement favored. The oligarchy of the Northeast was less receptive to the demands of
the workers and was more adamant about maintaining the existing labor system.10
UNION DENSITY
The Brazilian labor m ovem ent is considered weak. Union density in the total labor force is low. As of 1988, out of the 51.7 million labor force, 9.1 million workers were
affiliated with unions or associations. The union density in this case (that includes workers affiliated with associations) is 17.6%. Workers affiliated with the unions number only 7.1 million and union density is reduced to 13.8% (IBGE 1992:490)
10 The president of the CNI, senator Albano Franco, comes from the Northeast region. Fie has been one of the most influential figure that opposed benefits and rights to the workers and the union pluralism in favor of old corporatist system. During the CA the members of CA in the Southeast region supported the pro-labor clauses 70% of the time while the members of the Northeast and North showed the support rate of only 59% and 55% respectively. DIAP, Boletim da Constituinte. No.15 March/April, 1988:35 94 Compared to Western countries the union density of the Brazilian labor movem ent is pretty low11.
Table 12: Unionization by sector
Sector of activity Union density* Labor force Distribution of the* unionized by the sector Primary industry 13.8 % 21.8 % 17.1 % Secondary industry 23.2% 24.2 % 31.8 % Tertiary industry 16.6% 54.0 % 51.1 % Total 17.6% 100 100
Source: Calculation based on IBGE, Anuario Estatfstico do Brasil. 1992:490 Note: * These columns represent the workers affiliated to the unions and/or associations.
Moreover, most union members (64.5%) join the union for the welfare benefits th at Brazilian unions provide. Only 11% join the union for political activities (CUT
1991:48). This data suggests that the politicization of union members is pretty low overall. However, Table 12 shows that industrial workers are better organized than rural and service sector workers.
HISTORICAL CHARACTERISTICS
In regard to the historical characterization, Valenzuela’ indicators are not exactly appropriate for this study which deals with the transformation of the characteristics of union movement. Valenzuela’s indicators are geared to cross-national comparative studies which freeze the dynamic transitional process into general characterizations.
11 Union density in some of the Western countries are: Sweden 75%, Belgium 68%, Britain 50%, Italy 50%. West Germany 43%, Netherlands 42%, France less than 20% (Smith 1987:10-13). 95 However, they are still useful in understanding the constrictions on the labor movement
derived from its historical origin.
1 ) The role of the state: As was discussed in an earlier section, the Brazilian labor
movement had been tamed through the corporatist labor system. The state was dominant
in the foundation and workings of the union. Class conflicts were not recognized as such
and were to be softened or even eliminated.Pelegos were thriving under the
authoritarian regime. All of these historical characteristics began to change from 1978.
The combative “new unionism" was gaining force through decentralized strikes. Its
demands were not restricted to wage issues but also included demands for changes in
economic policy, a moratorium of interest payments on the foreign debt, and the
democratization of the country. The strait-jacket of corporatism was challenged through
the creation of inter-union peak labor organizations. This combative form of unionism
represents a rupture in civil society which contrasted with the continuity in political society. In the new democracy, the restrictive ties of ministerial control were revoked
by the new Labor Minister Pazzianotto. While the authoritarin legal system was maintained and the strikes in some “essential” sectors have been repressed by the military, most of the striking unions had not undergone state intervention during the
Sarney government. Compulsory arbitration by the Labor Court has decreased significantly. The role of the state in the labor system has been changing from dominant enforcer of the corporatist system to a relatively neutral but reluctant third party.
2 ) Division of the labor movement: The strength of the Brazilian labor movem ent was limited due to a division in the labor movement. The division began from the early days of the new union movement mostly about the strategy to be adopted toward the authoritarian regime and the principle of union organization. The radical wing which later formed itself into the CUT supported the idea of a general strike while the moderate unions which later formed the CONCLAT (CGT in 1986) opposed it for fear of renewed 96 repression. As was mentioned earlier, the CUT favors rank and file activism while
m oderate unionism favors the maintenance of the existing official structure.
Moreover, both the CUT and the CONCLAT/CGT have experienced internal conflicts.
The CUT itself was composed of many factions including catholic activists (CUT pela
Base), and Trotskyists, though the majority was maintained by the faction called
Articulagao led by the leaders of the Metal Union of the ABC region (Rodrigues 1990).
The CGT was composed of the unionists linked to the PCB, and PC do B, and the leaders of
the “Unionism of Result” which see American unionism as a model. The CGT was divided
in 1989 into two different CGTs over the conflict in the presidential election of the
entity. Unionists of the PCB and MR-8, who had supported Joaquimzao as the president
of the CGT, deserted the CGT(Confederag3o) when they lost the election and formed
another CGT (Central)12. The CSC (Corrente Sindical Classista: Class Union Current)
was formed by the unionists of the PC do B during the internal struggle within the CGT in
the same year. Luiz Antonio Medeiros, who is one of the two prime leaders of the
“Unionism of the Result” together with Antdnio Magri, formedForga Sindical in early
1991. The fragmentation has been one of the major characteristics of the Brazilian labor movement.1 3
However, there were elements of unity too. The labor movement has strong supporting organizations in terms of research on socio-economic issues and lobbying in the Congress. Research institutes such as the DIESSE and lobbying organizations such as
12 The original name of the CGT was the Central Geral dos Trabalhadores. The CGT changed its name in early 1988 to the Confederag2o Geral dos Trabalhadores. Thus when CGT was divided in 1989, the dissident group of communists readopted the old name (C entral).
13 There is another conservative peak labor organization created in 1985: USI (Uniao Sindical Independente). It defends the apolitical unionism and anti-communist orientation. It defends the “peaceful solution of conflict through direct bargaining with the purpose of preserving social peace.” Its members are limited to the federations and confederations of the commercial and service sector (Rodrigues 1990). 97 DIAP were not divided by the political and ideological tendencies of the labor
movement.14 They were supposed to represent the common interests of the labor
movement. Despite the division and competition among the differing tendencies, they
have been able to unite for common goals. The CUT and the CONCLAT launched the “Day of
National Protest” in July 1983 against the wage squeeze policy. They were united again
in the general strikes of 1986 and 1989 against the shock economic policy.
3 )Deqree of centralization: The degree of centralization is quite low in the Brazilian
labor movement. Two major indicators include the role of the higher level organization
in organizing general strikes and in bargaining over collective agreements. The general
strikes, conducted four times each after the shock economic program by the Sarney
government, were made either by the CUT alone or by the alliance of the CUT and the CGT.
Most of the general strikes have not been very successful, though not outright failures, due to the lack of support of the workers and the presence of the troops and military
police in the streets. For example, the general strike called for right after announcement of Cruzado plan of 1986 had to be postponed due to the enthusiastic support of the workers for the economic program. In some cases, even the unionists affiliated with the
CUT opposed calls for a general strike due to the lack of support among the rank and file.
In terms of collective bargaining most of the bargaining was done at the union or company level. In 1988, out of 28,031 collective bargaining agreements made by the workers (of urban, rural, and liberal profession) 7,196 (26% ) were made with the employers unions, 18,132 (65%) were made at the plant level, and remaining 3,194
(11%) were made though dissidio (IBGE 1988:8s)15. The dominant pattern was
14 As of 1989 732 unions were affiliated to DIEESE. DIAP had 270 affiliated unions. Most of these unions were urban unions. IBGE 1992:483
15 The numbers here add up to more than 100% because one union could conduct different types of bargaining at the same time (IBGE 1988:85). 98 collective bargaining at the firm level. The CUT played some role in the collective
bargaining of affiliated unions, but the scope of CUT intervention was rather limited and
some even opposed CUT involvement. Centralized collective bargaining has been thwarted
by the vastness of the territory, regional and sectoral difference in economic situation.
4 ) Financial independence: Most unions in Brazil lacked independent financial
resources. Many unions were dependent upon the union tax that had been collected and
distributed annually by the state.
Table 13: The percentage of union tax in total revenue (1988)
Union Type up to 10% 1 1-20% 21-30% 31-50% 51-80% 81-100% Employers 862 474 332 421 457 402 (2,948) (29%) (16%) (11%) (14%) (16%) (14%) Workers 1,784 853 499 671 578 455 (4,840) (36%) (18%) (10%) (14%) (12%) (9%)
Source: IBGE. Sindicatos: Indicadores Sociais. v.2, 1988:66 Note: Employers included urban and rural employers and independent agents. Workers include urban and rural workers, liberal profession, and independent workers.
As can be seen in Table 13, 21 % of the workers’ unions depend on the union tax for more
than 50% of their expenses. About 54% of the workers’ unions depend on the union tax
less than 20% of their budget. Considering the long tradition of corporatism, this data
shows that the majority of the unions achieved substantial independence in terms of
their finances. But a significant minority - almost 40% - rely on the union tax to cover
more than 30% of their budget.
COLLECTIVE BARGAINING ARRANGEMENT
Another criterion provided by Valenzuela is the collective bargaining arrangement. If the state play a major role through a court or legal institution, the role of unions are 99 limited in collective bargaining. Free bargaining between employers and workers has not
been one of the major characteristics of the Brazilian labor system. According to the
study of Pastore on the bargaining practices during 1982-1983, both workers and
employers preferred to take the matter to the court. Workers considered bargaining as a
ritual that had to be passed to reachdissidio that tended to respond favorably to the
workers. Employers held back in making offers deliberately so that major concessions
were made only in the Court (Pastore 1987:88-91). Thus free bargaining was a
relatively new concept even after the 1978 mobilization. The conception of labor
autonomy and capacity to use it in the disputes in the absence of the state was a new fact.
However, there is evidence that suggests that direct bargaining increased. According to
one study court decisions in S3o Paulo dropped from 36% in 1979 to 10% in 1981,
while agreements increased from 64% to 89% (Turchi and Silva 1990:16). Out of
26,712 collective agreements sealed in 1989 69% of the agreements were the result of direct bargaining between workers and employers, while about 30% went to the Labor
Court. Out of those sent to the Court, about 80% reached agreement while 12% were determined by the compulsory arbitration of the Court (IBGE 1992:484). Overall, the main trend is toward direct bargaining and the role of the Court has steadily decreased.
Despite this increasing tendency of direct bargaining the anti-inflation policy of the government discouraged direct bargaining. The government did not allow the transfer of the portion of the wage increase to the price, which led many employers to refuse to bargain with workers. Economic shock plans had frozen the wage for several months to control inflation. The state has still been imposing restrictions on free bargaining between workers and employers. 100 LINK WITH THE POLITICAL PARTIES
The link with the major political parties of the labor movement has been weak, while small leftist parties have maintained substantially strong links with the labor
movement. The PT was created by the same force that formed the CUT. The president of the PT, Lula, was the leader of the 1978 mobilization. The PCB and the PC do B also maintained strong ties with the labor movement largely through the CGT. However, these leftist parties were minor force in the national political scene. The largest party, the
PMDB did not have any systematic or organic relationship with the labor movement.
While the moderate union groups supported the PMDB during the transition, the relation was not a systemic one that is based on the mutual penetration of party activists and union activists. The second largest party, the PFL represented employers’ interests.
Moreover, the anti-CUT force within the labor movement proclaimed itself as a nonpolitical force, accusing the CUT as serving the political interests of the PT, rather than the interests of the workers in general. The leaders of the “Unionism of the Result” also proclaimed themselves as non-political. Even though some union leaders were involved in party politics, the link was rather personal, not an organic one.
RELATIVE STRENGTH OF THE EMPLOYERS
Just as the strength of labor movement is multidimensional, so is the strength of employers. Factors such as unity, relationship with the government, link with and penetration into the political parties, and strength of the labor movement affect the strength of the employers. But there are three importance differences in manifestation of business influence compared to labor. According to Offe (1980:85-87), these differences are as follows: 1) with labor, union power potential is created by 101 organization whereas with business associations power potential is inherent in the
capitalist society without involving any collective action; 2) power in labor unions is
exercised through the activity of the members (participation in mobilization) while in
business organizations power is exercised through leadership; 3) in labor unions,
power is open and concentrated while in the business sector power is hidden and
dispersed, ‘dispersed’ meaning each sector of business has distinct interests of its own.
Labor unions utilize the visible act of organization and mobilization to achieve their
goals, because their power resource is constituted by the numbers and collective action.
Business, if anything, resorts to less visible communication with government officials
and politicians. Their actions are in m ost cases invisible.
Despite this structural advantage of employers in the capitalist society, it is not
always the case that capitalists get what they want. First, economic sectors are all different in terms of their size, location, vulnerability to economic fluctuation, and access to credit (Payne 1992:17-20). Moreover, government policy does not affect all business in the same way. Silva (1987:236-241) found out that there exist five distinct groups of employers in the early days of the Sarney government: (1)
“Agricultural industrialists” have a great political weight which is concentrated in the
PFL and the PDS. They are politically conservative and oppose agrarian reform, income redistribution, and more advanced reforms in the social area. They demand subsidies, tax exemption, cheap loan, etc. from the government; (2) “Capital industrialists” of the modern and dynamic sectors want to participate in the formulation of economic policy, oppose state intervention in the economy, and support economic liberalism. They are
“pragmatic nationalists” and want to regulate foreign capital. They are divided into three groups: capital goods and intermediary sectors are dependent on the state; the durable consumer sector is related to foreign capital: traditional sectors (textile, apparel) are more nationalistic. Their political influence is distributed in the PDS, the 102 PFL, and the PTB; (3) “Financial intermediaries” are under government control and
dependent on government economic policy. This group grew under the military regime
and expanded with distortions of the economic model such as the growth of internal and external debt, the public deficit, and increases in the high interest rate and inflation rate. They have traditionally been in conflict with the industrialists on the level of interest rates. Their influence was reduced in the Sarney government. They support the
PFL and the PDS; 4) “International groups” are the multinationals and foreign banks.
Their role was reduced in the new regime relative to during the military regime but they still enjoy significant influence over government decisions due to their potential role in helping to ease the burden of the heavy foreign debt. They defend political and economic liberalism and are against state intervention in the economy. They want a guarantee of profit return through dividends and royalties; 5) “State enterprises” were also beneficiaries of the military regime with the amplification of state intervention in the economy. They defend government control of the economy and the protection of the domestic market.
In addition to the above-mentioned differences in regard to the role of state in the economy, the specific demands they made to the government, and their preferred model of development, business is divided into two groups on various national issues such as the regulation of the union movement, economic policy, the role of the state, and foreign capital. These groups are the conservatives and liberal progressives. In regard to the issue of the union movement, conservatives want to keep the unions under government control, support restrictive legislation on the right to strike, and support centralized wage bargaining through the state and the unions. Progressives prefer autonomous unions, tolerance of the peak labor organization, less restrictive labor legislation, an intermediary role for the state in the case of impasse, decentralized bargaining, and recognition of the right to strike (Silva 1987:244) 103 In terms of political representation, business has been in a much more advantageous
position. They were supported by the rightist parties (PFL, PDS, PTB) and the conservative wing of the PMDB. Moreover, business leaders themselves became political elites. In the November 1986 election, capital owners were the largest group represented in the Constituent Assembly with 37.7%. The liberal profession followed with 35.8%. Capital owners were dispersed between the PMDB (38.9%), PFL
(37.6%), PDS (50%), PTB (42.1%), and the PL(57.1%) (Fleischer 1990:234).
This shows that despite their dominant position in the new democracy, business leaders have not been unified in the political representation of their interests.
Finally employers are not weak in the work place. The crucial disadvantage for the workers has been the lack of organization in the work place. Factory committees are limited to the most advanced and developed union sector. According to Luiz Antdnio
Medeiros, the president of the Metal Union of S3o Paulo, “the social right of workers ends when they enter the factory gate”. According to Payne (1992), who interviewed business leaders during the Sarney government, employers were not threatened by the increasing strike activity. 64% of the interviewed industrialists responded that they were satisfied with labor relations in their firms. Only 21% mentioned labor as a source of fear (Payne 1992:8-10).
In sum, while Brazilian business looks much stronger in terms of political representation and in the work place than the labor movement, it is quite possible that this strength may not necessarily translate into power. Despite their structural advantage, the functional diversity of economic sectors works to divide business resources as a whole. While strong in political representation, their manifestation is not necessarily well organized. They are dispersed across several parties. Employers seem to be much stronger in the work places. But it is not clear how this supremacy in the work place can be translated into restricting the progress of labor reform given the 104 different rule of the game in the political arena (electoral politics, public protests,
lobby).
STRENGTH OF THE RADICAL LABOR MOVEMENT (CUT)
The examination of the labor strength of the Brazilian labor m ovem ent suggests that
Brazilian labor is quite weak. Union density and the degree of centralization are low.
Labor is divided in terms of both ideologies and strategies. Labor strength is concentrated
in the Southeast region. Linkage with political parties is limited to small leftist parties.
Business has been much better represented in the government and political parties.
Business leaders do not seem to be very much threatened by the increasing strikes. If
this is the case, how can we explain the rupture of the corporatist labor control
mechanism? The presence of a strong labor movement does not appear to be a necessary condition for the corporatist system to be undermined. The spontaneous explosion of discontents was enough to call into question the efficiency and the legitimacy of the existing system. However, the spontaneous revolt was not enough to put the 50 year old corporatist system in crisis without the emergence of new union groups that challenged the existing system. Thus the answer seems to lie in the fact that the radical labor movement represented by the CUT had spearheaded the Brazilian labor movement. The strength of CUT came from the strategic importance of the economic sectors where the
CUT-affiliated unions are strong. The CUT has represented the most dynamic and modern sectors of the economy.
According to the survey of IBGE conducted in 1988, only 20% of the unions are affiliated with peak labor organizations. Out of these unions affiliated with the peak labor organization, 65% belonged to CUT, 29% to CGT, and 5% to USI (IBGE, 1988:34). The
USI is not a part of the combative unionism. In other words, 80% of the unions are independent and less committed to the political causes of the union movement. Combative 105 unionism, though it spearheaded the rupture from the corporatist structure, did not conquer most of the unions in Brazil at least in terms of numbers (see Table 14). The corporatist structure still thrives through the federations and confederations of the official structure.
Table 14: Proportion of CUT unions by region and economic sector (%)
Regions Indust. Service Comme. Transp. Bank Rural Lib. Pro. Total
North 16.1 14.3 10.7 -- 59.5 4.5 30.3 North E. 19.8 37.9 10.6 10.1 38.7 14.8 1 1.9 16.0 South E. 11.9 17.2 5.4 12.4 16.3 11.9 8.6 1 1.6 South 7.1 3.3 6.8 3.7 9.6 11.7 8.2 8.8 Cent. W. 7.7 25.0 10.0 10.0 5.9 21.9 17.0 17.7 Total 11.7 18.2 7.6 8.5 15.9 15.8 10.2 13.3
Source: CUT. Retrato da CUT. 1991:51
However, this does not necessarily mean that combative unionism is weak in Brazil.
As will be examined, most of the large unions in advanced sectors have been affiliated with the CUT. As of June 1990, 1,117 unions representing 12.4 million workers were affiliated with the CUT with 3.5 million union m em bers (CUT 1991:50). While the
CUT represents only 13% of unions, it represents 24% of the total work force. The average number of members in CUT-affiliated unions is 3,166. Considering that almost
3/4 of the workers’ unions have less than 2,000 members (IBGE 1988:60), the CUT unions are constituted by large unions.
The fact that 65% of the unions affiliated with peak labor organizations (which would be more active in their union activities as a class organization) are affiliated with the radical CUT is quite significant to understand the overall map of the Brazilian union movement. During the first eleven months of 1985, out of 6.1 million workers who participated in strikes, about 60% were led by CUT unions, and most of the other 40% received some support from the CUT (Keck 1989:278). The CUT expanded fast. In August 106 1986 284 unions were formally affiliated with the CUT, 16 which increased to 450 in
September 1988, and 1,117 in June 1990.17
Moreover, the CUT is strong in the most advanced sectors of the economy and in
sectors considered “essential” such as public services, banks, and the telephone service.
As is shown in Table 15, the CUT is strong among the workers in the metal, petroleum,
chemical and petrochemical industry, banks, and public administration (health, social
welfare, and education). The CUT is weak in penetrating traditional sectors, such as
commercial and textile sectors. In sum, the strength of the CUT comes from the fact that
CUT-affiliated unions are strong in the strategic sectors of the economy and in the
sectors considered “essential” whose disruption costs a great deal for the government and population. The following account summarizes the strength of the CUT in the
Brazilian labor m ovem ent.18
1 ) The state enterprises: As of July 1990, the CUT unions represent 50% of the unions and 64.6% of the workers in the whole category of the telephone industry
(representing more than 80,000 workers out of 124,000 workers in the category). In the petroleum industry 75% of the unions are affiliated with the CUT and they represent
86% of the workers.
2) The urban sectors : The CUT represents 40% of the unions and 55% of the workers in this category (water, sewage, gas, electricity).
3 )Rural sector: The CUT represents 12% of the unions and 28% of the workers.
16 Not all union entities that participated in the congress of the CUT were affiliated. In the second congress of the CUT in 1986, 1,014 union entities participated but only 284 unions were formally affiliated. See Rodrigues (1990:18)
17 The dramatic increase between 1988 and 1990 is due to the elimination of the requirement of the ministerial recognition in creating a new union.
18 All the data used here comes from CUT. Retrato da CUT. 1991: 51-56 107 4) Public sector. The CUT represents 28% of the unions of the national, state, and
municipal government, and represent 13% of the workers. The CUT controls almost all
of the public employees unions at the federal level (23 out of 24 unions). In the
education sector, the National Confederation of the Education Workers (teachers and
professors, service workers in the schools) is affiliated with the CUT and the CUT
represents more than 90% of the employees of this sector. The CUT also represents
77% of the unions and 94% of the social welfare employees of Brazil. In the public
health sector the CUT represents about 80% of the workers.
5 ) Industrial sector: The industrial sector produces almost 40% of GDP. The CUT
has a very strong presence in three important sectors: the metal, chemical and apparel
industry. The chemical industry (which produces chemical, petrochemical, plastic,
glass, pharmaceuticals, and abrasives products) employs 608,000 workers. 54.2% of
the workers and 25% of union entities are represented by the CUT. The three biggest
petrochemical complexes are all affiliated with the CUT.1 9 The biggest union of the chemical and pharmaceutical sector, that of Sao Paulo also belongs to the CUT. The metal
industry (which produces metal, electronic, mechanical, and transportation material
products) employs 1,850,000 workers of the 30,000 companies. The CUT represents
64% of the workers (1.1 million) and 35% of the unions. Just in the state of S2o Paulo the metal industry employs 1.1 million workers which are 61% of the workers of the category. The CUT unions represent about 414,000 workers of the 12 unions concentrated in the ABC region. The principal automobile industry (assembly and
19 Three complexes are located in Bahia, S2o Paulo, and Rio Grande do Sul. Camagari (Bahia) where 60 companies are concentrated and 20,000 workers are employed, responsible for the 1.2% of GDP. 40% of the products are exported. The Capuava complex of Santo Andr6 of Sao Paulo, has 15 companies and employ 5,000 workers. It produces 1% of GDP, and export 40% of its products. The third is Triunfo of Rio Grande do Sul where 8 companies are concentrated with 4,500 workers. See CUT, Retrato da CUT. 1991:51-56 108 automobile parts) is concentrated in S3o Bernardo and Santo Andr6. S3o Bernardo alone
produced 1,012,000 automobiles in 1988, responsible for 11 % of GDP. In the state of
Minas Gerais, the CUT controls 90% of the workers and 42% of the unions. In the
metallurgical industry that employs 132,000 workers and is responsible for 3.62% of
GDP, the CUT represents 70.8% of the workers of the category. The apparel industry
employs about 1.2 million workers, two thirds of whom are employed in the Southeast and South regions where the CUT represents 43% of the workers of the category. One of the major sectors of this industry is footwear. The unions of the two major sites of the footwear industry (Franca of S2o Paulo, Novo Hamburgo of Rio Grande do Sul) are also affiliated with the CUT.
6) Service sector: The service sector includes transportation, commerce, and banks.
In the transportation industry (land, air, marine) the CUT has 35 affiliated unions out of 424 union entities and represents 51% of the workers. The CUT represents more than half of the bus unions and all of the subway unions. In the commerce sector that includes retail employees, wholesalers, tourist employees, bar employees, the CUT presence is weak, representing 15% of the unions and workers in the category which has 500 unions and 4.3 million workers. In the banking sector which is responsible for 8% of
GDP and employs 878,000 employees of the 219 union entities, 48 unions are affiliated with the CUT (22%) but represent 56% of the workers in the category. The CUT is strong in the Southeast region that employs 61% of the workers of the category. The CUT unions represent almost 60% of the region.
Overall, the CUT is stronger in big unions. In the metal industry, 10 out of 1 5 major unions are CUT-affiliated. In the banking and telephone sectors, 4 out 5 major unions are with the CUT. In the petroleum industry, 2 out 5 major unions are CUT-affiliated. In the chemical and petrochemical sector, all three of the biggest unions are CUT-affiliated. 109 Despite the lower percentage of union representation, most of the workers and many big unions in the strategic sectors of the economy are affiliated with the CUT.
Table 15: Strength of the CUT (1990)
Sector % of CUT-affiliated unions % of workers represented by the CUT-affiliated unions State Enterprise Telephone 50 64.6 Petroleum 75 86 Urban sector 40 55 Rural sector 12 28 Public employees Government employees 28 13 Education (teachers, prof.) n/a 90 Social workers 77 94 Public health workers n/a 80 Industry Chemical sector 25 54.2 Metal sector 35 64 Apparel sector n/a 43 Service Transportation 8 51 Commerce 15 15 Bank 22 56
Source: CUT. Retrato da CUT. 1991:51-56 Note: The data is based on the 1990 survey of the CUT-affiliated unions. Unfortunately this kind of data does not exist before 1990. The survey of 1988 was insufficient. Since the CUT was growing fast after its creation in 1983, this data can be used just to indicate the strategic resource of the radical labor movement in the economy.
CONCLUSION: UNION PRACTICES. STRENGTH OF LABOR. AND THE LABOR REFORM
The leading force of combative unionism practically dismantled the structural environment that made the corporatist system viable, that is, a demobilized workforce.
The fundamental contribution of the “new unionism” in putting the corporatist labor system in crisis was the mobilization of the workers and the institutionalization of the defiant movement into the national organization. The strike activity and the spontaneous 1 10 birth of an independent unionism outside of the state tutelage made obsolete the old
corporatist labor control mechanism. The success of unionism was due to rank and file support for the combative union leadership. State intervention and the ousting of the defiant union leadership by the regime was no longer effective. This created an institutional vacuum in which the new unionism could grow fast and claim legitimacy in its representation. Many union entities of the official structure joined the new trend in the labor movement, which is demonstrated by the fact that almost 80 federations and confederations (out of total of 154 confederations and federations) participated in the creation of CUT or CONCLAT in 1983. It was very important that the hegemony of the labor movement shifted from official unionism to the new unionism before the transition occurred or even before the presidential campaign began in 1984. The defiant labor movement won the battle with the authoritarian regime in redrawing the map of the Brazilian labor movement. When the opposition began their presidential campaign the battle between the old regime and new unionism was over. To reconcile the country and to minimize social and political instability, the new ruling coalition had nothing more to do than simply accept the new union movement as a “reality”.
The whole process of labor mobilization was accompanied by the restructuring of the practice of collective bargaining. Direct bargaining increased. The strike was used to induce the reluctant employers to the bargaining table and/or to demand more wages.
There emerged a great gap between union practices and the existing corporatist legal system. “Reality” challenged the existing legal system. The Ministry of Labor under the authoritarian regime studied the new labor legislation but these studies never developed into any attempt to reform the labor system. The task of accommodating the legal system to the “reality” was left to the new democracy.
However, this need to accommodate the existing legal system to the new reality did not necessarily mean that the direction and scope of the reform would be determined by 111 the process which caused the crisis in the corporatist labor system (mobilization of the
workers and emergence of combative unionism). The analysis in this chapter suggests a
rather mixed picture. While the strike right was in practice achieved due to its
persistent use, the achievement of other demands (job security, reduction of the
working hours, and guarantee of the maintenance of real income, change of economic
policy) depended on the response of the employers and the on the government economic
policy. These demands cannot be achieved simply through mobilization alone. They need
the approval of the employers and the government. In addition, some of the factors that
determine the response of the employers and the government (economic situation, for
example) are beyond the realm of the strength of the labor movement.
Moreover, the “reality” of union organization and union structure was anything but
clear. It was a mixture of conflicting trends toward both the maintenance of the
corporatist system and its replacement. Moderate unions were advocating a corporatist
union structure (single union system and union tax) in the name of unity and the
protection of the labor movement. The radical group defended the union pluralism in the
name of the enhanced representativeness of the union movement. In regard to the role of work place organization, radical groups wanted to promote the active participation of the
rank and file through the factory committee, while the moderate group saw the factory committee as a potential rival to union power. Actually indeterminacy in regard to union structure has persisted throughout the reform process under the new government.
Another element that complicated the issue of union structure was the persistence of the official corporatist union structure, that is, federations and confederations that have been maintained through state-guaranteed finance. The hegemony of combative unionism did not result in the collapse of the official union structure. Radical groups that attempted to eliminate the official structure were a minority in the labor movement. Not only was the CONCLAT in favor of maintaining the official union structure, but also a 1 1 2 majority of unions, at least in terms of numbers, did not participate in either the CUT or
the CONCLAT. Moreover, due to the nature of corporatism which organized the official structure both among the workers and the employers, the question of liquidating the corporatist structure also involved the representation structure of the employers. The hegemony of the radical groups in challenging the existing system did not reach the point beyond which the adoption of the new union structure would have been inevitable. The internal division of the labor movement on the issue of union structure and union organization and the persistence of the official unionism portended that the reform to replace the corporatist labor system would not be easily implemented.
As was examined, the strength of Brazilian labor vis-a-vis political society was far from impressive. Despite the fundamental crisis of the corporatist labor system,
Brazilian labor has had a relatively low mobilization capability (low union density, financial weakness, low political consciousness among the workers in general), has been divided, and lacked a significant political link with the major parties. This implies that the political opportunity structure would play an important role in the labor reform process, because labor lacks the power to initiate the reform process and to impose its preferences. The weakness of the labor movement suggests that labor would not be able to impose their demands, but would need to work out a deal with the political elite. Labor would be in a stronger position in regard to those issues in which there exists a consensus among union tendencies. At the same time, the virtual hegemonic position of the combative “new unionism" means that the political elites and/or employers will not be able to impose the measures that would be rejected by the “new unionism ”.
Especially important in this context is the role and strength of the radical labor movement. Unions in the m ost advanced and modern economic sectors tend to be affiliated with the CUT. Though the number of unions that support the CUT are a minority, most of 1 1 3 the politically active unions have supported the CUT. Moreover, CUT-affiliated unions tend to be big representing a large number of workers in the category. The combination of these two contrasting elements of Brazilian labor, th at is, a strong radical tendency within a weak labor movement, implies that in the labor reform process: 1) radical labor would continue to defy the unfavorable legal scheme and would employ public pressure to deal with labor reform measures; 2) due to the strong presence of radical unionism the process of labor reform would be politicized, which implies that the major decision cannot be made within the narrow bureaucratic circle; 3) moderate union groups’ preferences, even with the support of the government and the political parties, would have limited weight in cases where radical unionism declines the reform measure in question; 4) at the same time, labor would not be able to impose its preferences to the employers and the political elites. CHAPTER IV
PAZZIANOTTO REFORM
The new democracy, named New Republic, was installed on March 15 of 1985. The
labor reform during the 1985-87 period was led by the new Labor Minister Almir
Pazzianotto. He worked as a labor lawyer for the Metal Union of Sao Bernardo during the
1978 mobilization and had a reputation as a skillful negotiator and able labor lawyer.
He had worked as Secretary of Labor in the state of SSo Paulo before he was picked up by
president elect Tancredo Neves. He was a firm believer in union autonomy and played a
crucial role in maintaining the autonomy of unions until he left his position in the
middle of 1988.
His reform efforts were constituted by three parts. Measures that guarantee union
autonomy, the reform that incorporates the spirit of the ILO Convention 87 (free
organization of the unions without the state-controlled frame of union recognition,
implying union pluralism), and the strike law. Except the first measure on union
autonomy, his reform efforts failed, largely due to a lack of congressional support,
intense controversies, and opposition by both business and labor organizations.
CONSTITUTION OF THE POLITICAL ELITE IN THE “NEW REPUBLIC"
The ruling coalition, Democratic Alliance, held an absolute majority in the Congress.
In 1985 it comprised 299 deputies out of 479 members in the Chamber (199 of the
PMDB, 100 of the PFL) and 42 senators out of 69 in the Senate (25 of the PMDB, 17 of
114 1 1 5 PFL). However, this coalition was conflictive and unstable. Until the alliance formally
collapsed in 1987, the PMDB oscillated between support for and opposition against the
government depending on the issues and the political conjuncture. It was a fragile
coalition and lacked any cohesive policy orientations.
The president elect Tancredo Neves died soon after the inauguration of the new
government in the middle of April. Vice-president Sarney succeeded Neves as president.
But Sarney suffered the lack of natural legitimacy as leader of the new democracy. He
was a former president of the PDS (the government party of the military regime) before
he joined the FL. For some time after Neves died, prominent leaders of the PMDB such as
Ulysses Guimaraes and Fernando Henrique Cardoso acted as if the real power structure
in Brazil was parliamentarism based on the majority of the PMDB in the Congress
(Schneider 1991:311). In the Congress the ruling coalition had the majority but they
were not a cohesive group. The PFL and the PMDB was in disputes over cabinet positions
and the choice of candidates for the ruling coalition in the municipal elections (ESP 5-
30-85). Sarney was in a dilemma. Without the support of the PMDB his government
could not function. At the same time the PMDB was not favourable to him. The PMDB
leadership, especially Ulysses Guimaraes had ambition to be the next president and was
not willing to give full support to Sarney. Sarney had to go with the ministers that
originally were chosen by Neves and sometimes had to accept the choice of the PMDB
leadership in the appointment of new cabinet members1. It was only in 1988 that he was
able to get rid of those ministers close to Guimaraes when the five year mandate for him
was determined by the Constituent Assembly (Schneider 1991:307). The PMDB, on the other hand, could not completely desert Sarney because of the resources which staying
1 For example, in choosing successor of the Finance Minister Dilson Funaro in early 1987, Sarney wanted to appoint Ceara governor Jereissati. But the PMDB leadership forced him to appoint Bresser Pereira from the state of S3o Paulo. 1 16 in the government provided them as well as because of their responsibility as the largest party.
The most important issue to Sarney from the early days of his presidency was the question of his mandate and the issue of presidentialism. The PMDB leadership and the progressives including the leftist politicians that saw Sarney as “accidental” president wanted to shorten his mandate to four years through the new constitution while Sarney and the conservatives, including the military, wanted to keep his m andate for 6 or at least 5 years.
Checked by the PMDB leaders who tried to limit his power, Sarney had to rely on the center and center-right of the PFL, the PDS and the PMDB. Thus, Sarney had to make a deal with the PMDB leadership while trying to undermine its power base and expand the influence of the moderates. The PMDB itself was not a cohesive party. It was more of a
“front” that sheltered all kinds of political forces within it. It was divided into conservatives, centrists and progressives. Progressives who wanted to cut the mandate of Sarney and preferred more profound change occupied almost a third of the PMDB members in the Congress ,2 Sarney had to court the conservatives and the moderates to his side using government patronage. The president of the PMDB, Ulysses, was not considered one of the progressives but was sympathetic to the demand for deeper change on the part of party progressives due to importance of some of the progressive groups3 in supporting him during the transition years and due to his need to hold the PMDB together for his presidential ambition.
2 Out of 198 members of the PMDB 64 members (32%) were considered the leftwing (progressives) of the party (ESP 5-26-87)
3 One of the several groups that constituted the PMDB progressives, “independent Travessia Left" was the nucleus of the pro-Ulysses “Travessia group”. “Travessia group” of Ulysses and the “Unity group” of Tancredo Neves made a deal that resulted in the presidency of Ulysses Guimaraes in the PMDB while some key posts of the PMDB went to the “Unity group” (ESP 5-26-85). 1 1 7 In sum, the traditional dilemma of the Brazilian political system , that is, the limited power of a minority president in a multiparty system, was repeated in the new government (Mainwaring 1992). The president has no problem when he is popular because politicians tried to exploit his popularity. But when he does not enjoy that popularity, the Congress does not support him. The result is an executive-legislative stalemate. The fragmentation of the ruling coalition thus provided the possibility that government-initiated labor reform might not pass the Congress unless it commands a consensus among the major social actors. This aspect of the Brazilian political system defies conventional wisdom on the strength of the conservative political force and especially the power of the military in Brazil’s democratic transition. The military might exercise a veto power on any reform that could threaten the conservative political structure but it does not necessarily mean that conservatives and the military can impose their preferences on reform if the president does not enjoy firm support in the
Congress.
THE STATE - LABOR RELATIONS DURING 1985-87
STRIKE MOVEMENT
One of the most pressing challenges of the new government was the dramatic increase of the strike movement. The number of strikes in 1984 was 492, which increased to
619 in 1985, 1,004 in 1986, and 2,193 in 1987 (see Table 2 and 3). The New
Republic was born in the midst of the strike movement. 240,000 metal workers of the
ABC region struck for 40 days from the middle of April to May for reduction of working hours and quarterly wage adjustment. The mobilization of the formerly immobilized sectors was remarkable. Public employees in the education, health, public 118 transportation, and bank sectors actively participated in the strike movement. The most
telling example was the 700,000 bank workers’ strike in September 1985. The bank
workers strike completely ignored the existing strike law. While failing to achieve a
quarterly wage adjustment, the bank workers strike achieved a wage increase above the
inflation rate (LAWR 9-20-85).
The Cruzado plan4 of February 1986 subdued organized labor, because it was
successful in controlling the inflation until the end of the year. While the number of
strikes was still increasing, workers were forced to limit their action mainly to small
strikes in individual companies (LAWR 1-8-87). The number of strikes increased 62%
(from 619 to 1,004 ) but lost hours decreased almost a half (from ninety million hours
to fifty million hours) compared to 1985. This suggests both the continued discontent of
the workers and the short duration of the strike due to the intransigence of the
employers in the face of price controls.
In 1987 the frequency of strikes reached its record high. 2,188 strikes took place
and 132 million hours were lost. The dramatic increase of the strike movement in
1987 was due to the bitterness of the working class after the failure of the Cruzado Plan
and the increase in the prices by the Cruzado II5 announced right after the municipal
election of November 1986. The CUT and the CGT jointly launched a general strike in
protest against the Cruzado II. The inflation in 1987 was 412% compared to 63% in
1986. The monthly minimum wage was US$68 in early March which was the second
4 It froze the price for one year, increased minimum wage 33%, and workers unemployed more than a month were given the unemployment benefit. It also introduced the “sliding wage scale" (escala mdvef) by which whenever the monthly inflation reached 20% wage would be automatically increased by the same amount.
5 Cruzado II was intended to cool down the excessive increase of the demand due to the low inflation rate and economic growth artificially maintained by the price control. Increased demand heated the economy and repressed inflation was threatening. The measure included the increase of the prices of the postal rates, electricity, car, fuels, taxes on the beer and cigarettes. 119 lowest in South America after Peru's US$53 (LAWR 3-19-87). The government-
initiated talk of a social pact went nowhere and the Bresser plan in June eliminated the
inflation trigger. All of these factors contributed to a dramatic increase in the number
of strikes in 1987.
The most prominent aspect of the 1987 mobilization was the increase of strikes in
the service sector, mostly the workers of the low income group including bus drivers,
collectors, and the public employees of the education and the health area, and street
sweepers. It was also the year of strikes in the public administration at federal, state,
and municipal levels. They conducted 838 strikes constituting not only the largest
number of strikes since 1978 in this sector but also 80% of the total lost hours this year (Noronha 1991:117-118). The state was besieged by the increasing revolt of government employees. The question of governability was raised seriously by the government, especially the military.
Despite the increasing frequency of strikes, general strikes were not very successful. A general strike against the Cruzado plan could not be launched due to the lack of support. The general strike of December 1986 against the Cruzado II was not very successful, though not a failure. The estimates of the participating workers varied from
10 million of the SNI, 15 million of the weekly magazine Veja, to 25 million of the CUT and 37 million of the CGT out of 50 million of the economically active population (IBASE
PG December 1986-January 1987:23). Though the general strike did not stop the whole country, the government was forced to resume talk of a social pact to appease the workers. Another general strike was called for after the announcement of the Bresser
Plan6 in June 1987. The strike conducted on August 20 was a failure. Public
6 The Bresser plan included the price freeze form 90 days, end of inflation-linked trigger for automatic wage increase, a new method of calculating inflation rate, and the reduction of the government spending. 120 transportation, whose stoppage played a crucial role in the success of the strike, was
normal in the city of S3o Paulo and Rio de Janeiro. The largest union in Latin America,
the Metal Union of S3o Paulo, whose president, Medeiros, had always been against the
idea of a general strike, did not participate. Workers’ support was meager in a year in
which most of the economic sectors recorded only 1-2% of growth after 7-10% record
growth during 1985-86. Even Lula, the president of the PT and leader of the 1978
mobilization criticized the CUT president, Jair Meneguelli, for not being able to read the
mood of the workers (LAWR 9-3-87). The political strength of the labor movement was not enough to pose a serious threat to government economic policy.
The increasing mobilization of the working class after the democratic transition reflected the changing map of the Brazilian labor movement. The labor movement became more combative and radical elements were gaining strength. The moderate group
(CONCLAT) was losing its ground within the labor movement in the New Republic. In early 1985 the CUT slate won the union election against the CONCLAT slate in the Bank
Workers Union of Rio de Janeiro, the largest union in Rio de Janeiro. Even the president of the CONCLAT, Joaquimzao, was threatened by the CUT in his own stronghold. In the election of the Federation of Metal Workers of S3o Paulo, Joaquimzao was able to be reelected only by the vote of pensioners. He was defeated in the factory by the CUT candidate (JB 11-25-85 ). The CONCLAT changed its name to the CGT in March 1986 in an effort to shake up the gradual loss of support among the workers. Osvaldo Bargas, the secretary general of the CUT-SP (Sao Paulo) claimed that “nearly four or five unions join the CUT every month, while the CONCLAT has never won a union affiliated to the CUT since its creation” (ESP 1-18-86). Due to the increasing revolt of the workers,
Joaquimzao’s CGT, while not very enthusiastic, was obliged to go along with the CUT in challenging government economic policy through the general strikes. At the same time, the election of Medeiros as the president of the Metal Union of Sao Paulo in 1987 opened 121 a new type of moderate unionism, the “Unionism of Result”. The “Unionism of Result” represented by Medeiros and Magri did not challenge the capitalist system but supported the mature and modern capitalism of the Western countries. This new development led to the division of the CGT between the groups linked to the communist parties and the seemingly apolitical and non-partisan group of result-oriented union leaders.
GOVERNMENT STRATEGY TO THE STRIKE MOVEMENT
The government strategy toward the increasing strike movement was a combination of conciliation and selective repression. Conciliation was led by the Labor Minister
Pazzianotto through the recognition of the strike right of the workers and the talk of a social pact. The hardline approach was made by conservative ministers and the military through public attack on the CUT and selective repression of striking unions in
“essential” sectors.
The conciliatory effort was made by the recognition of the right to strike , opening channels of the government to labor leaders, and talk of a social pact. Sarney, conservative politicians, employers, and even the military ministers admitted that striking was a legitimate right of the workers but emphasized that the strike should not be violent and the existing law should be respected and applied. Even the military did not like arrogance of the old hardliners. The comment by the former SNI chief, general
Octavio Medeiros, that “a club is not a saint but made miracles” was criticized by the
Army Minister Leonidas for the political nature of the statement (CB 5-23-85).
Another approach to conciliate the strike movement was to provide open channels of communication between the union leaders and the government. President Sarney invited union leaders to listen to their demands in an effort to build the groundwork of the social pact in 1985 and 1987. Even the economic ministers met the union leaders to discuss 122 wage issues. Labor Minister Pazzianotto met union leaders of the CUT, the CONCLAT (CGT
from March 1986), and workers’ confederations frequently to solicit their opinions and
to persuade them in regard to the labor reform and the social pact.
The effort to reach a pact with the union leaders was made through the Labor
Minister. However, it had been riddled with difficulties. Labor Minister Pazzianotto,
while trying to influence the decision making process in the economic program and
sometimes successfully keeping the pro-labor measures7, was largely alienated from
the key economic decisions and could not maintain his credibility. Moreover, the
government priority was on the control of inflation. One of the most fundamental
demands of the workers, the quarterly adjustment of wages, had been repeatedly denied
by the government. Another difficulty was the refusal of the CUT to participate in the
pact. Combative unionism led by the CUT did not see much difference between the
authoritarian regime and the Sarney government. At first it even refused to participate
in the dialogue with the government on the social pact. Faced with the charge that the CUT
was not acting responsibly, it demanded as a precondition of the participation in the pact
the fulfillment of the basic demands of the workers (such as the 40 weekly working
hour, quarterly wage adjustment, and unemployment insurance) which the government
found impossible to accept (LAWR 3-15-85 ).
The government’s attempt at the social pact appeared only when the government
lacked a clear line of economic policy, especially after the failure of the economic plans.
The proposal of the social pact gave the impression of the participation of the workers in
the national policy, and the government tried to avoid increased mobilization through
discussions with conservative and moderate wings of the labor movement (Silva 1991).
However, talk of the social pact actually never led to any real accomplishments. Sarney
7 For example, Planning Minister Sayad tried to eliminate the wage trigger in the Cruzado II. He gave up the idea due to the opposition of Pazzianotto. 1 23 emphasized the need of a social pact in the second half of 1985 but it disappeared with the announcement of the Cruzado plan in February 1986. The talk of a “national understanding” after the announcement of Cruzado II in December! 986 collapsed when the Finance Minister announced the price increase of prime material and electronic goods in January 1987 without consultation with the Labor Minister who was leading the talk with the union leaders. The idea of social talk reemerged with the indefinition of economic policy in early 1987. Sarney invited union leaders to the meeting in Granja do
Torto in which the CUT refused to participate. This dialogue was a stage action and the government made no concrete proposals (Noronha 1991:116). The dialogue with the union leaders was put aside again when the Bresser plan was announced in June 1987.
The only pact agreed with the CGT in December! 988 lasted only two weeks. It was broken by the unilateral announcement of the Summer plan in early 1989.
The conciliatory posture was more dominant in the early days of the Sarney government. As the mobilization in the “essential” sectors increased, the government, especially the military showed a more threatening posture. The strikes of the bank workers, dockers, and public employees of the government were conceived as a serious threat to national security by the military. Sarney proclaimed that the strikes after the announcement of the Cruzado plan were an attempt to destabilize the democratic regime and government economic program by the “fifth-column” (referring to the CUT) (FSP
9-10-86). The strike movement was attributed to a small group of radicals in the labor movement based on a political motivation to shake the government. The government attack was focused on the CUT. Justice Minister Paulo Brossard warned the CUT that it would be held directly responsible for "whatever might happen”, when it tried to launch a national protest in October 1986 against the government economic policy
(LAWR 10-2-86). Military ministers, Justice Minister, and the SNI were the main 1 24 components of the hardliners within the government that led repressive postures against
the strike movement.
Verbal threats were matched by frequent clashes between the military police and the
striking workers. Arrests and injuries of striking workers were routine. Striking
workers were sometimes killed by the military police and the troops. The military
police killed two individuals when it shot into a crowd of striking rural workers in May
1986 in Leme, S3o Paulo. To weaken the mobilization of the workers in the December
1986 general strike, the military deployed the troops and tanks in the streets of the
major cities and in some key strategic sites including government buildings and factories.
Another measure used by the government to counter the strike movement, especially the strikes in the “essential” sectors, was the direct intervention in the strike. The military sent troops to occupy the oil refineries in March 1987 at the request of the president of Petrobras, injuring 16 striking workers. In the same month the Navy also occupied 30 ports in the country. The most dramatic incident was the invasion of the steel plant in Volta Redonda, Rio de Janeiro, in November 1988, killing three striking workers.
ROLE OF PAZZIANOTTO
New Labor Minister Pazzianotto had worked for the Metal Union of S3o Bernardo, the birthplace of the combative new unionism, as a labor lawyer during the late 1970s, and had a firm commitment to the strike right of the workers8. When his appointment as
8 Sandra Valle, former aid to Pazzianotto, gave one example of Labor Minister's commitment: “ At one time within the elevator one of the staff commented negatively on the increasing strike. Then Pazzianotto replied ‘what’s wrong with their striking? It’s their right.”’ (interview with Sandra Valle 12-10-93). 1 25 the Minister of Labor was announced he was welcomed by the many unionists for his
knowledge and expertise on labor issues. As a firm believer in labor rights, he refused to
intervene in the striking unions and he soon became a target of the conservative
ministers in the government. The Minister of Industries and Commerce, Robert Gusm3o,
criticized Pazzianotto in the TV interview for not applying the existing strike law in May
1985. Another conservative minister, Carlos Magalhaes, the Minister of Communication
also criticized Pazzianotto for not intervening in the strikes of the post office employees
and telephone company workers (JB 5-1 5-85). GusmSo was representing the demands
of the employers to be tough with the strikes. Magalhaes was representing the
government as an employer. The confrontation between these conservative ministers and
Pazzianotto did not result in the change of Pazzianotto’s policy line. The leaders of the
PMDB supported the position of Pazzianotto that the old “debris” of the authoritarian system should not be applied in the democratic regime and that the decision of applying the law belonged to the Minister of Labor. The Justice Minister, Fernando Lyra, one of the progressives of the PMDB, also supported Pazzianotto, praising his effort to end the strikes through negotiation (CB 5-17-85). The confrontation ended in a draw.
Pazzianotto maintained his policy line with the support of the PMDB leadership and unionists. The conservative ministers kept complaining with the support of the employers and the military. Despite the attack and criticism of the conservative ministers, Pazzianotto remained as a major ally of the labor movement within a basically conservative government.
President Sarney had no other option than to keep Pazzianotto. In addition to the support of the leadership of the PMDB for Pazzianotto, his government needed him because of the respect he commanded among the unionists which was useful to maintain the talks over a social pact with the labor leaders. Pazzianotto participated as a mediator in many strikes to urge further negotiation. President Sarney himself had several 1 26 meetings with union leaders. In this context, sweeping repression of the labor
movement, which might have included the illegalization the CUT and arrests of the
radical labor leaders, was out of the question9 despite frequent threats to the strikers
and actual repression in some “essential” sectors.
However, Pazzianotto played his role within the limits of the parameter of the
basically conservative Sarney government. He remained in his position for more than three years. He was one of three ministers who had been originally appointed by
Tancredo Neves and still remained in the cabinet by the middle of 1988. This suggests that he did not challenge the basic power structure of the new government10. His role as an ally with the labor movement was limited to his commitment not to intervene in the striking unions. Moreover, the military was autonomous in responding to the strike movement and sometimes viewed Pazzianotto with suspicion because of his background and his refusal to intervene in the striking unions. The SNI was very active in preparing for the government response to the strike movement. Pazzianotto did not and could not challenge the power of the military. It was reported th at SNI led the resistance to the proposal of Pazzianotto to soften the authoritarian legislation on strikes (Diniz
1988:19). The political weight of Pazzianotto was gradually drained away with the passage of time. The government’s economic policy had been constantly criticized by the union leaders and Pazzianotto did not have much influence in the economic decision.
9 Labor mobilization after the transition in Korea, for example, did not result in the expansion of the right to strike or an overall labor reform. Radical labor leaders were put in jail and the dissident labor organization remained illegal. The government launched a heavy attack on the radical union leaders while tolerating dissident labor organization as long as it remained calm.
10 He confirmed that he was on good terms with the Army Minister general Leonidas and the SNI chief general Mendes. He admitted, though, he had some trouble with the Navy Minister over the strikes in the ports (interview with Pazzianotto 12-14-93). 127 Controversies on his draft bill on the strike law and the union structure undermined his
reputation.
The political process of the Pazzianotto reform did not involve congressional voting.
His draft bills never had the chance to be voted. The intense controversies around his
reform prevented the politicians from taking a firm stand on the issues. If Pazzianotto
was an ally of labor in the conservative government, he did not have firm allies within
or outside the government. Despite Pazzianotto’s background in the Metal Union of S3o
Bernardo, the CUT did not take him as much of an ally but just a member of the basically
anti-labor government. Moderate union groups were less critical of the government but they did not support the draft bills of Pazzianotto on the issue of union pluralism and the restrictive strike bill
In sum, the political opportunity structure during this period can be characterized as one with a fragmented ruling elite, open communication channels, and one where the
Labor Minister was an ally of labor. The government was not in a position to impose its own reform ideas on the defiant labor movement. This political opportunity structure led to the situation where the pressure and the lobbying of labor and business organizations played an important role in the process of reform politics.
REFORM OF THE UNION AUTONOMY
The foremost importance of the Pazzianotto reform was the liberalization of unions from state intervention. Right after assuming the position as Minister of Labor, he granted amnesty to the union leaders who had been expelled from their positions under the military regime. Many of these leaders were already rehabilitated through the
Federal Appeals Court. He characterized it as “a full testimony of the new phase that is beginning in the country” and “effort for a conciliation, a demonstration that the 1 28 government and Labor Ministry is engaged in the creation of free and autonomous unionism” (FSP 3-19-85). The unionists welcomed the measure. Lula, the most prominent leader of the Brazilian labor movement, said th at “rehabilitation of the revoked unionists is the obligation of any civil and democratic government. It is the minimum that can be expected” (FSP 3-19-85). Many unionists were of the opinion that the government measure was of symbolic importance since they had been already rehabilitated by the court.
Several days later in March Pazzianotto revoked the regulation in the CLT that had prohibited the inter-union alliance. The CUT and the CONCLAT had been technically illegal by that time. The recognition of this combative unionism outside the corporatist union structure is s a good indication that the political elite did not believe that the maintenance of the existing system was a viable option in a democratic political system.
The old regulation, which stipulated that “the union entity should act as an organ of collaboration with the public power” and “partisan-political activity and the propaganda of the doctrine incompatible with the existing institutions is prohibited to the unions,” was practically repudiated by the new reform-minded Labor Minister (CB
3-26-85). By signing a new ministerial regulation portaria ( ), Pazzianotto recognized the new force in the labor movement which had been growing since the 1978 mobilization.
Another reform measure by Pazzianotto was the liberalization of union elections from state tutelage. Pazzianotto revoked the ministerial regulation that controlled the union elections and gave a period of one year for the labor organizations (unions, federations, confederations) to adopt their own statutes within the rules of the CLT. The existing rule was to be maintained until March 1 1986.
However these liberalization measures were possible and made with ease due to the fact that they did not need the approval of the Congress. They were all made and revoked 1 29 through ministerial regulation. According to Pazzianotto, these measures were made with his initiative and without consultation with president Neves, who had been hospitalized just one day before the inauguration of acting president Sarney, or with any other ministers (interview with Pazzianotto 12-13-93). The initiative and speed of the measure is obviously due to the fact that Pazzianotto was committed to labor reform.
But his role should not be overrated because these basic measures for union autonomy had been already promised by Tancredo during the presidential campaign. At the same time liberalization of union operations was the minimum precondition for the promotion of the social pact which Tancredo had been promoting since his campaign in 1984.
These measures reflected the conquest of the labor movement in practice. Amnesty was already made with the decision of the Court. The legalization of the CUT and the
CONCLAT was an act of recognition of the new leading force of the Brazilian labor movement on the part of the government. The liberalization of union elections was also a reflection of the impossibility of controlling the union leadership through electoral manipulation. The rank and file support for the combative union leaders made ministerial intervention obsolete.
Another more important change was the commitment of Pazzianotto not to intervene in the labor unions especially in the case of illegal strikes. Despite the liberalization, the laws that needed approval of the Congress, including the strike law did not lose their legal validity. The Court was forced to apply the authoritarian law due to the absence of new law. Especially in the case of so called “essential” services and the public sectors, where strikes are practically prohibited by the existing authoritarian law, the commitment of the Labor Minster to not exercise his privilege to intervene was the essential element of the liberalization of labor relations. In this respect, Pazzianotto was the major ally of the labor movement. 130 THE FAILED REFORM OF THE UNION STRUCTURE
FAILURE OF THE RATIFICATION OF ILO CONVENTION 87
Right after the installation of the new regime, the Sarney government wanted to
ratify the ILO Convention 87, which guarantees the full freedom of workers to create
labor organizations as they see fit. Though it does not explicitly call for union pluralism,
the freedom to create unions m eant in the Brazilian context the collapse of the single
union principle in each base territory. Ratification of the ILO Convention 87 also meant
the dismantling of the union tax which had been collected from all of the workers in each
category, unionized or not. Thus ratification of Convention 87 signified a total
restructuring of the corporatist labor system.
The motivation of the government to ratify Convention 87 was to weaken the labor
movement through fragmentation which was expected to result from the emergence of union pluralism and the denial of state-guaranteed union finance. The influence of the defiant labor movement, especially the radical movement of the CUT, was facilitated by the monopoly of representation in each category and in each base territory. Once the defiant leadership settled in, the monopoly of representation worked as a force against the government. 60% of the obligatory union tax which was collected from all the workers in the category was used by the unions. The corporatist system without state control over the unions did not necessarily mean the weakening of the labor movement. If the official system of representation is colonized by the defiant group, the state not only guarantees and helps support radical union organizations but also feeds the confrontation mechanism in labor relations.
The decision was made in the context of the fast growth of the CUT within the
Brazilian labor movement. In the largest union in Rio de Janeiro, the Bank Workers 131 Union, the slate linked to the CONCLAT was defeated by the slate linked to the CUT. Even
Joaquimzao, the leader of the CONCLAT, won election for president of the Federation of the Metal Union of S3o Paulo over the CUT by a slim margin, and only with the support of pensioners. The real target of the government was the CUT. The logic of pluralization was based on the idea that the ratification of the ILO Convention 87 would result in the creation of many smaller sized unions that would neutralize the force of the radical CUT.
The government could have tried to take advantage of the division of the labor movement in an attempt to lessen the CUT influence in the strike movement. However, the strategy of giving favorable treatment to CONCLAT could not work. Increasing inflation and the resulting loss of purchasing power contributed to increasing confrontations in the work place. The increasing confrontational attitude of the rank and file led even the moderate union leaders to take a combative attitude. Taking a moderate posture was risky. It could lead to defeat in the next union election and could bring criticism of being pelegos, the non-representative parasites of the corporatist system.
Moreover, the government did not have many resources to give to the moderate union leaders. Fighting inflation has been the first priority of government policy. The recognition that confrontation yields better results has been widespread since the mobilization of 1978.
The CUT was in favor of the ratification of Convention 87. The CUT was the force born through the struggle with the corporatist system. Since its creation in 1983, or even in earlier days of mobilization, the force that created the CUT had been demanding union liberty and autonomy, which meant the removal of state intervention in the creation and operation of the unions. The CUT fought against thepelegos that had been in charge of the official union structure. Since the position of thepelegos was almost guaranteed by the single union principle and the union tax, it was the first priority of 1 32 the CUT to pluralize the system. Pluralization meant a greater opportunity to establish
the CUT unions in the strongholds of moderate or conservative unions.
Contrary to the CUT position, conservative union leaders conceived the question of single union principle as the “employer offensive against the workers organizations”
(Jose Calixto, the president of the CNTI, JB 11-25-91). They argued that pluralism would divide and weaken the union movement. They also supported the idea of union liberty and autonomy but wanted to achieve it through the “principle of public order and the common good” which meant the legal regulation of the creation of the labor unions and avoidance of competition among the rival unions. The CUT repudiated that Convention
87 would fortify the labor movement by enhancing the representativeness of the unions.
According to the CUT, union leaders have to seek support from the rank and file, and have to defend the interests of the workers, because support of the workers is the only way for them to be reelected.
It was not just the workers’ unions that opposed the pluralist labor regime.
Employers supported the idea of liberty and autonomy but they preferred “a little bit of” government control. They feared that pluralism would bring in chaos in labor relations. President of the Federation of the Industries of Parana argued that “neither the employers nor the employees are mature enough to coexist with pluralism." The president of the Federation of Agriculture of the state of S3o Paulo also argued that as a result of pluralism “anarchy will follow in the class representations” (FSP 6-2-85).
Some employers hated to lose the power and prestige that came along with monopoly of representation.
The FIESP (Federation of Industries in the State of S3o Paulo) and the CNI (National
Confederation of the Industry), which represent the official structure of the employers’ union, were also against the ratification of the Convention 87. Della Mana, director of 1 33 the Union Department of the FIESP, argued that the principle of union autonomy and
liberty did not necessarily mean an implantation of union pluralism (JT 1 1-27-85).
Related to the issue of union structure, but even more important was the question of the union tax. The union tax was the means to support the corporatist system, guaranteeing the survival of the non-representative unions. Union leaders were in favor of the abolition of the union tax only as a principle. The union tax was established in
1 942. The money was collected from all of the workers of the category regardless of whether the workers were unionized or not. Each March one day’s worth of wages was deducted from the payroll by employers and sent to Caixa Economica Federal, a government bank. 60% of the money went to the unions, 1 5% to the federations, 5% to the confederations, and 20% to the Ministry of Labor. The union tax was supposed to be used for welfare purposes such as medical doctors and dentists. The union tax was also collected from the employers to support the federations and confederations of employers. The extinction of the union tax also meant that employers would be affected.
Money was not a great concern for the employers’ union entities. The leadership of business organizations could have been affected because the small unions had one vote just like the big unions. If these small unions were left to die with the extinction of the union tax, the leadership of the Brazilian business circle could be challenged.
The CUT was in favor of abolition of the union tax. While admitting that the small unions might be pulverized if the union tax was abolished immediately, most of the CUT union leaders defended the ratification of Convention 87, emphasizing the desirable changes the Convention 87 would bring. One representative of the Bank Workers Union said “more important than the unfounded fear are the advantages of union liberty”. Many others also mentioned the inefficacy of the union bureaucracy in helping workers as a reason for abolishing the union tax. Vicente de Paulo da Silva, the president of the CUT-
ABC, argued that Convention 87 would mean the freeing of the unions from the Ministry 134 of Labor. He admitted that there was a risk of division of categories, but denied that the
union movement would be atomized as a result. Against the worry that the union
movement might be divided and pulverized he argued that for the sake of the real unity of
the unions and of the workers struggle, the freedom to form new unions was essential. A stronger argument, suggested by the president of Metal Union of Osasco (CUT), was that even though the Convention 87 would be ratified, “in practice there will not be union pluralism. ..No one will be able to create a new union where there exists already real one which fight for the workers. The new unions will surge where existing ones do not represent the workers” (FSP 2-13-86).
Conservative and moderate union leaders (CONCLAT and leaders of the federations and confederations) opposed the extinction of the union tax. Magri, one of the moderate union leaders, argued that “the pluralism will represent the end of the union movement, by permitting the division of categories in weak unions, which will be manipulated by the political parties. .. Pulverization of the union structure will make difficult the realization of strikes" (FSP 2-13-86). Joaquimzao, the president of the CONCLAT, also argued that the abolition of the union tax would decrease the resources of the labor unions and as a result would favor employers.
Employers also opposed the abolition of the union tax. IF it should be abolished, they argued, it should be gradual to give the union entities the time to adapt themselves to the new financial situation. Della Mana of the FIESP argued that more than half of the unions would not survive the abolition of the union tax. He proposed that there be a 5 tol 0 year adjustment period. He argued that the issue was of great importance and needed to be discussed carefully with enough time (JT 12-17-85). This exemplifies the response of conservative unions, both employers’ and workers’. That is, they acknowledged the need for reform, but preferred not to do it at the moment due to the lack of conditions for the success of the measure or out of concern for the weakest unions. The four big employer’s 135 confederations, CNI, CNC, CNA, and FNB actually put this strategy into practice when
they sent the document to president Sarney, asking for the creation of the triple joint committees (government, employers, workers) “to examine in depth the result of the eventual adoption of the Convention and examine the convenience and the opportunity of its ratification, taking into consideration of proximity of the CA.” (JB 1-17-86).
By November 1985 Sarney wanted the Senate to ratify Convention 87 with urgency.
He got the support of the PFL. But the rapporteur of the bill on the ratification of
Convention 87 in the Senate, senator Nelson Carneiro (PMDB) did not see any urgency.
Convention 87 had been sitting in the Congress almost 40 years to be voted on. After the approval of Convention 87 in the Chamber on June 26, 1984, the senators were not in a hurry to vote on that controversial issue. A backlog of work and upcoming municipal elections held on November 15 of 1985 were also reasons why the Senate was not in a hurry. Moreover, Nelson Carneiro did not like the stipulation that the validity of
Convention 87 would last 10 years once approved. He preferred to write the domestic law that contained the principles of Convention 87 (GM 1 1-22-85).
The lobbying of the unionists who were against ratification was pretty strong. They sent 200 telegrams to the Senate asking members to not approve Convention 87. Vice leader of PMDB in the Senate admitted that that opposition could compromise the commitment of the government. According to him, “the unions and federations favorable to the Convention 87 are sleeping” (JB 11-25-85). Though the CUT sent 5 members of the National Executive to the Congress to argue for ratification in the Senate, the intensity and amount of support were not comparable to those of the opposition. The CNTI
(National Confederation of the Industrial Workers), which opposed ratification, announced the results of a study that had surveyed 39 federations and 386 unions.
92.3% of the federations and 89.6% of the unions were reported to be against
Convention 87 (JT 1 1-25-85). It is not clear how this survey affected the Congress, 136 but it was a clear indication for those politicians who were not committed to ratification
that all these controversies merited more caution.
The PFL was for the approval of Convention 87. The PMDB, the largest party, did
not clearly manifest its position except that it leaned against the ratification as a result
of the strong lobbying of conservative union leaders. The vice leader of the PMDB in
the Senate, Helio Gueiros, said that “for the first time, I see the workers and employers
on the same side, that is, against the convention.” The PDS remained vague on this issue.
The leader of PDT, Mulio Badaro, acknowledged that he received strong pressure to not
approve the Convention 87 and agreed that there was no urgency for the ratification of
Convention 87. The combination of the strong lobbying and the lack of clear positions
among most of the parties except the PFL and PT led to an understanding among party
leaders in the Senate to postpone the voting to March ofl 986.
However, by March 1986 the government had changed its policy. The fact that the
radical union movement was for the ratification of the Convention 87 while employers
and conservative union leaders were against it led to suspicion and division within the
government. The military and information community within the government came to
think that with Pazzianotto, who was a union lawyer for the Metal Union of ABC, in favor
of ratification it might not be such a good strategy to manage the radical activism of the
CUT (JB 1-17-86).
With all of the controversies and the lack of government conviction about the impact
of the ILO Convention 87 the government gave up on the immediate approval of
Convention 87 in March 1986. Instead Labor Minister Pazzianotto decided to push for
intermediary union legislation that would reflect the principles of Convention without extinguishing the union tax. According to Pazzianotto, the obstacles to the approval of the
Convention were : 1) the fact that the text of convention has to be approved in its entirety, which would be valid at least 10 years once approved; 2) the fact that the 137 government was not convinced that this convention should be extended to the public
employees; 3) the division of opinions on the ratification of Convention 87, especially
on the abolition of the union tax (FSP 3-14-86).
The attempt to ratify ILO Convention 87 was revived with the increasing labor
conflicts in the wake of the failure of the Cruzado Plan in November 1986. The general
strike of December 12 1986 was a relative success in the Brazilian context. The talk of
a social pact ended abruptly with the price increase by the Planning Minister at the end
of January 1978. In February all the peak labor organizations (CUT, CGT, USI) and all
the workers’ confederations united in submitting unified demands for a change in the
economic policy. The number of strike in January was 120, which increased to 279 in
February involving 1.2 million lost hours for each month (IBASE PG April 1987:16).
In response to the increasing conflicts the military resorted to repressive measures. In
its crackdown against the strikes of petroleum workers and dockers and seamen, the troops occupied all of the government-owned oil refineries and 30 ports of the country.
With the increasing strikes and united opposition of the labor movement against the government’s economic policies, the SNI submitted a confidential report to Sarney which strongly urged the government to do something to curb the advances of the labor movement (FSP 3-18-87). The government tried one more time to weaken the labor movement through ratification of ILO Convention 87. This time the target was not just the CUT but the whole labor movement. The motivation of the government remained the same. With the end of exclusive representation and the accompanying elimination of the union tax, the unions would have less time to organize strikes and would have to turn to themselves for restructuring and for new source of income (FSP 3-1 5-87).
It was in this context that in the middle of March 1987 the new rapporteur on the bill of Convention 87, senator Jose Richa, convoked the meeting of the presidents of the federations, confederations, peak organizations of employers and workers, and party 1 38 leaders to discuss his proposal to create a tripartite committee to modify the existing
legislation. In this meeting, it was decided that the vote on Convention 87 would be
postponed until June 18 of 1987 (FSP 3-19-87). The postponem ent of the vote in the
Senate was proposed by the rapporteur himself who received hundreds of manifestations
against the immediate ratification of Convention 87 in addition to the united opposition
of CGT, USI, and employers’ confederations (JBs 3-22-87). Meanwhile, the president
of the CNI, senator Albano Franco, asked for more time to discuss the matter with his
unions. Sarney agreed to grant 90 more days (FSP 3-18-87).
The president of the CUT, Meneguelli, while acknowledging the government intention
to weaken the labor movement, repeated his defense of ratification of Convention 87. He
emphasized that workers had to have the right to choose the type of organization they
wanted - single or plural union structure. He argued that single union system should
prevail in practice, but advocated that it should be conquered by the workers rather than
by law. This way the CUT was able to defend itself against the criticism that Convention
87 and the resulting pluralism would lead to the weakening and division of the labor
movement.
However, the focus of the CUT at this time was more on the mobilization of the
workers and other social groups to criticize government economic policy than on the
reformation of the union structure. Meneguelli noted “a hasty manner” of the
government in seeking to modify the union legislation and the strike law: “ the
government may be trying to put these issues in the order of the day to deviate attention
from wage issues and the Constitutional Assembly” (FSP 4-7-87). The CUT did not, and
perhaps could not, mobilize support for the ratification of Convention 87. Their emphasis went to the mobilization of the small manufacturers, businessmen,
neighborhood associations, churches and students by organizing meetings to discuss the 1 39 "Non-payment of the foreign debt, No to repression, No to recession”, which was aimed
to broaden social support for the general strike the CUT was planning (ESP 3-21-87).
Conservative union leaders such as Joaquimzao of the CGT were still against the ratification of Convention 87, saying that “the government want to divide in order to conquer.” They feared that companies might finance the yellow unions “Which would be docile and modest” and run by the employers themselves (FSP 3-18-87).
As the date of the vote on Convention 87 (June 18) was approaching, twenty two leaders of industrial federations submitted in mid-May to the senators a request for the rejection of Convention 87. They argued that Convention 87 was against the current constitution, collided with existing Brazilian social and economic reality, and that definition of Convention 87 in regard to the essential services might allow strikes in the transportation, railways, telecommunication, and electricity sectors. They also argued that Convention 87 authorized the strike not only for the improvement of wages but also to protest the social and economic policies of the government and problems within the company (ESP 5-14-87). Overwhelmed by the pressure from the union entities, senator Jose Richa, who was in charge of writing a bill that endorsed the Convention 87, finally gave up. The pressure came not just from conservative union leaders (both employers’ and workers’), but also from the leftist politicians linked to communist parties.
FAILURE OF THE LAW OF THE UNION ORGANIZATION
Faced with strong opposition to the ratification of the ILO Convention 87 during
1985, the government tried to implant the spirit of Convention 87 through ordinary law. With the increasing mobilization of the workers against the wage freeze contained in the Cruzado plan which was announced in February 1986, the Sarney government tried 1 40 another measure in regard to the union structure. On July 16 1986 in a meeting
between president Sarney and nine ministers which included the SNI chief, general
Mendes, Sarney authorized Pazzianotto to prepare the Law of Union Organization (Lei de
Organizagao Sindical) and another law that regulated the collective bargaining. Two
principal measures of the new law were the provision for the autonomy of union
organizations and the end of the union tax. The installation of union pluralism as a way to
reduce wage pressure through the division of professional categories was the proposal
that obtained consensus among the ministers including the minister of the SNI ( Globo 7-
18-86). With union pluralism, various unions can be instituted in the same category
in the same base territory. The purpose was the same as the first attempt; to weaken the
hegemony of the CUT unions in the strike movements. Breaking the monopoly of CUT
representation in the base territory was the real intention of Sarney and the military
while Pazzianotto himself denied that union pluralism was a political maneuver to
control the union movement. For him it was a m atter of principle to have union
autonomy in a democratic regime. He said, “there will be no democracy without union
autonomy in this country. President Sarney is taking a historical initiative. It is the
first time for the government to touch the union structure” (IBASE PG July 1986:21).
The response of the union leaders was similar to the previous one. The CGT was
against the extinction of the union tax and against pluralism. The CUT was in favor of the
union pluralism. The greatest difficulty was the extinction of the union tax. According to
Pazzianotto, 95% of the almost 10,000 union entities (both employers and workers) depended on these resources to survive. Though Pazzianotto wanted to restructure the
union system, he did not want to “launch a torpedo and provoke a bomb explosion in the
union sector” (JT 8-12-86). With this dilemma, Pazzianotto chose to maintain the
union tax as a way of implanting union autonomy in Brazil. 141 The new draft bill incorporated regulations on collective bargaining, striking, and
union organization into one body. Due to controversies on the regulation, the final draft
bill was sent to the Congress only on June 22 of 1987. The draft bill on union organization made it possible to form unions at any level including that of category,
profession, company, and plant. It stipulated that new unions could be established with the participation of at least 1/3 of the employees in each level, or 1/8 of the category or profession. The union tax was supposed to be extinguished gradually over five years.
This was contrary to the rule approved by the Committees of Social Order of the CA, which permitted unions only at the category level and prohibited more than one union in each category for each base territory and also maintained the union tax.
The bill had no real chance to be examined by the Congress. The bills sent earlier by the government (the bill on the ratification of Convention 87 and the bill on collective bargaining and the right to strike) were still waiting to be voted on. The Congress was busy deliberating the constitution and many congressmen expressed perplexity about receiving a draft bill whose possibility of deliberation was remote. Senator Mansueto de
Lavor commented that “I don’t know why Pazzianotto does this. This is disrespectful to the CA. This is one more attempt by Sarney to conduct a parallel Constituent Assembly.
He wants to defeat what was already approved in the Committee. He wants to be Getulio
Vargas” (JB 6-23-87). This final attempt at union restructuring was doomed from the start. The gravity of power moved to the CA. Big issues such as the question of presidentialism and the length of Sarney’s mandate were at the center of political debate.
Moreover, the CA already approved the maintenance of the corporatist shell. 142 THE FAILURE OF THE RESTRICTIVE STRIKE BILLS
THE STRIKE LAWS UNDER THE AUTHORITARIAN REGIME
The strike was controlled in the authoritarian regime by two laws: Law 4,330
promulgated in June 1964 and the Decree Law 1,632 issued in August 1978. The authoritarian constitution also prohibited strikes in the public service and in
“essential” activities (article 162).
Law 4,330 amended the 1946 constitution (which had guaranteed the right to strike) by defining the conditions under which a strike would be considered legal. Public employees or employees of the state-owned corporations and agencies were forbidden to strike. Strikes in “essential” services were also prohibited. The essential sectors in which strikes were prohibited included: water, energy, light, gas, refuse, communications, transports, loading and unloading, funeral service, hotel, and basic industries or industries essential to the national defense. Strikes mobilized for political, partisan, religious, or social reasons were prohibited. The definition of a political strike was left to the government. The law permitted strikes only for “better working conditions or wages”. In the Labor Court strikes were allowed only when the employers had not paid the wages declared in a Court decision and when the employers had been behind in payments (Erickson 1977:159). Most strikes declared legal by the
Labor Court since 1964 were cases where employers had not paid their workers for more than three months (Alves 1985:52). It permitted only purely economic strikes mobilized after parties had reached an impasse after the expiration of the labor contract.
Once the Labor Court rendered its normative sentence, the strike was to be legally terminated. 143 Certain types of strike-related behavior were also prohibited under the old law.
Strikers could not perpetrate “any act of violence against persons or property” (which
include aggression, depredation, sabotage, invasion of establishments, insults or the
hanging or displaying of posters or pamphlets which are offensive). It was unlawful to
publicly call your boss “a thief” during a strike. Any picket line which prohibited
workers from entering the establishment also constituted an unlawful aggression (Gacek
1993:72). Strikes were required to be authorized in the general assembly by the
participation of 2/3 of the members of the union in the first round of vote, and 1 /3 in
the second round. For the unions with more than 5,000 members the quorum was
reduced to 1 /8 of the members.
The 1978 law expanded the list of “essential” activities where strikes were
prohibited. In addition to the essential activities of Law 4,330, strikes were prohibited
for government officials at the federal, state and municipal levels, and for workers in all
the other industries considered “essential” through presidential decree. It was
extremely difficult for unions to satisfy all of these legal prerequisites. It was almost
impossible to conduct secret balloting in a general assembly involving hundreds of thousand of workers in the case of big unions. But the failure to comply with any single requirement made the entire strike illegal. Even after fulfilling all of these requirements, the employer or the Ministry of Labor could petition the Labor Court for a compulsory arbitration. The normative sentence was generally issued within 48 hours and this terminated the strike legally (Gacek 1993:74).
In sum, the strike laws of the authoritarian regime were designed to prevent the strike from the start. It not only limited the scope of strikes (only of purely economic nature, exclusion of “essential” activities) but also installed numerous procedural obstacles which made legal strikes almost impossible. The extra guarantee that strikes 1 44 would not occur was based in the availability to resort to the compulsory arbitration of
the Court.
THE DRAFT BILL OF 1985
At the end of May 1985, Labor Minister Pazzianotto announced the draft bill1 1 that
regulated collective bargaining and the strike right. The proposed bill was supposed to
be of a transitory nature until the Constituent Assembly revised the existing
constitution. The basic idea was to stimulate bargaining by framing strikes as part of the
collective bargaining process. Workers and employers were forced to bargain once
called to do so by the Ministry of Labor. It stipulated a period of 48 hours before the
parties could resort to the compulsory arbitration of the Court, which provided a final
opportunity to negotiate (article 10).
The draft bill recognized the strike as a legitimate right for the workers. But the
quorum of the general assembly to authorize the strike remained the same. Two thirds of
all union members for the first round vote and 1 /3 for the second were required to meet
in the union assembly to authorize a strike. For the unions which had more than 5,000
members the quorum was reduced to 1 /8 (article 13). Occupation of the work place,.
depredation of installations, blocking access to the work place, and physical and moral
aggression were considered “invalidimprocedente ( )” (meaning that striking workers who did not return to work during the time the Labor Court set would be dismissed without prior notice and employers are entitled to hire substitute workers) (article
16). Workers were required to maintain minimum service to provide essential services
and to preserve the firms and their equipment through the agreement with the
11 For the text of the draft bill, see Pastore (1987) 145 employer’s union. Lacking agreement, the employers were able to hire substitute
workers (article 19). Essential services were reduced to ten (water, electric energy,
refuse, funeral service, post office and telecommunication services, cashing in the bank,
transportation, combustibles, and hospitals) (article 20). The strikes in the public
service and in “essential” activities were rendered “invalid ”. Strikes for political
purposes and solidarity were prohibited. Failing to observe these requirements led to the
immediate resort to compulsory arbitration (meaning the termination of the strike)
(article 25). Strikes could be ended by the decision of the union leaders without the
consent of the workers through the general assembly (article 26).
The draft bill was not much different from the authoritarian strike laws. It
maintained almost the same definition of essential activities and the same quorum
requirements. Strikes in the public service and essential activities, strikes of political
or solidarity purpose were considered “invalid”. The imposing role of the state through
the Labor Court was still dominant or even fortified in resolving labor disputes. Except
for the new concept of “valid and invalid” strikes which caused a great deal of
controversy, the draft bill brought in only very minor modifications such as a shortened
period in the declaration of the strike and the exclusion of cashing activities of banks
from the list of “essential” activities (Pastore 1987:142).
The draft bill created intense debates and controversies. Several prominent jurists
argued that the “valid-invalid” concept of strike was about judgment on the process or
the intention of the parties, which could not replace the concept of legal-illegal strike
(Pastorel 987:143). The adoption of the “valid-invalid” concept was viewed with
suspicion on the part of employers. The FIESP argued that “invalid” strikes were not
necessarily illegal strikes and saw the draft bill as an invitation to strike. It even considered the draft bill as “unconstitutional” in that the constitution explicitly
prohibited the strikes of public employees and in “essential” activities. The FIESP 146 demanded the restoration of legal-illegal concept of strike and a limited role for the state in the bargaining process (ESP 6-27-85).
Many employers’ organizations, such as the CNI, the ANFAVEA, and the Commercial
Associations of the State of S3o Paulo, presented a substitute bill that maintained the legal-illegal scheme of the strike, diminished the intervention of the Ministry of Labor in the bargaining process, and limited the role of the Labor Court in the case of impasses.1 2 The CNI introduced its own substitute bill which was extremely conservative or even reactionary. It suggested ministerial intervention for six months in the unions which conducted the illegal strikes. It prohibited the formation of factory committees and peak labor organizations such as the CUT and the CONCLAT (ESP 6-23-
85). It also preserved the concept of illegal strike, stipulating as illegal those strikes in public services and in essential activities, as well as those unleashed for “reasons other than labor claims” such as for political, partisan, religious, and social reasons. (Diniz
1988:16). The draft bill of the CNI was aimed at restoring the old authoritarian law.
The CUT characterized the bill as timid and unacceptable. The CUT demanded the unrestricted right to strike, saying “we are absolutely against any discussion of the regulation of the exercise of the right to strike that in fact amounts to the restriction of a historical right of the workers” (FSP 7-7-85). The CUT argued that it will discuss the strike law only when the unlimited right to strike was guaranteed in the new
Constituent Assembly. The CONCLAT also considered the bill not satisfactory, because it used the same mechanism as the existing strike law. Both the CUT and the CONCLAT were emphatic in their demand for the unlimited right to strike. The CONTAG (National
Confederation of the Rural Workers) said that “the government bill does not attend to the aspirations of the working class, maintains unacceptable rules, and is worse than the
12 For the summary of the substitute bill of these organization, see FSP 7-7-85 147 existing one.” The criticism of the CONTAG also included the maintenance of essential
activities in which strike rights are restricted and the power given to union leaders to
end strikes without the consent of the general assembly of the workers (IBASE PG July
1985:13). Even conservative union leaders proclaimed that the draft bili was a “dead
letter” as long as it prohibited strikes in essential sectors (GM 6-25-85). The
president of the Workers’ Confederation in Commerce demanded that employers who
refuse to negotiate should be punished (CB 6-23-85).
Due to the controversies on the government bill, the delivery of the bill to president
Sarney was withdrawn by Pazzianotto himself to incorporate criticisms and new suggestions. Actually it was rewritten 7 times by the end of August, which reflected the difficulties of making even a minimum consensus on the right to strike. Employers were using newspapers, especially Estado de Sao Paulo to attack the government bill. For the employers’ organizations the bill was much too liberal and very soft with regard to strikes. For workers, Pazzianotto bill was not different from the laws under the authoritarian regime. Surrounded by a barrage of criticisms, Pazzianotto summarized the difficulties: “On the one side, there are employers that want to maintain the existing law. On the other side, there are workers who do not want to recognize the national reality and the constitutional limits” (IBASE, PG, August 1985:23).
THE DRAFT BILL OF 1986
Pazzianotto presented his second bill in July 1986. The second draft bill eliminated the concept of a “valid or invalid” strike and reintroduced the concept of a legal or illegal strike, clearly specified the requirement of a secret ballot for the declaration of the strike (article 20), and extended the time between the first and second round of votes in the general assembly from one to two days while adding five days for the 148 announcement of the convoking of the general assembly and three days for the
notification of strikes to employers (article 20-22). The minimum quorum was
reduced from 2/3 to one half plus one of the members in the first round of voting, from
1/3 to 1/5 in the second round. For unions with more than 5,000 members the quorum
was reduced from 1/8 to 1/10 of the members (article 20). In general the second bill
was more or less the same as the previous one. The quorum was reduced but the time for
the declaration of the strike was extended so that employers could have more time to
respond. Strikes in public services and essential activities were explicitly prohibited
(article 32). The list of “essential” activities was almost the same except that funeral
service was dropped while the loading and unloading in ports were added.
The CUT and CGT^ 3 criticized the new version since they viewed it as not at all different from the previous one. This time the FIESP applauded the second bill (JT 7-
31-86). By this time, employers were more concerned about enforcing the existing law.
If the second bill was more or less the same as the authoritarian strike law and if the old law was ignored and not enforced, there was no point in opposing it. The president of the
FIESP protested that “we want the law to be enforced. There are many cases where the military police does not show agility in deploying vehicles when we ask them come to protect the property” (ESP 8-2-86).
The second bill was sent to the Congress but was not examined. The party leaders of the ruling coalition did not make a clear case. While the draft bill was still being studied by the Ministry of Labor, the party leaders of the ruling coalition did not want to move forward on the matter of the strike bill, alleging that it was still in the process of adjustment in the Ministry of Labor (CB 3-13-86). Moreover, the Congress had always been behind schedule in the deliberation of the law. Inaction on the part of
13 CONCLAT created in November 1983 has changed its name to CGT in early 1 986. 149 Congress was frustrating to Pazzianotto: “How can I accelerate the legislative process if
the Congress is practically in recess for almost all of the year in 1986?” (CB 10-19-
86). In addition, the general election was coming in November 1986. Congressmen were
busy in their election campaigns and were not interested in being involved in such a controversial issue as a strike.
THE DRAFT BILL OF 1 987
The third bill was presented in June 1987 after the Subcommittee on Workers’
Rights already finished its work. The bill included the chapter on union organization, which was mentioned in the above section. The third bill was not different from the previous two draft bills. The quorum required for a strike remained almost the same(half plus one at first turn, 1/3 at second, 1/8 for the unions with more than
5,000 workers). The list of “essential” services was the same and strikes in public services and “essential” activities were also prohibited.
The CUT and the CGT did not like the regulation of the right to strike. The CUT distributed detailed criticism of the bill to the press, whose main points included: permission of the right to strike only on the occasion of the renewal of the contract; prohibition of strikes in the public sector and essential activities; requirement of a minimal quorum, direct and secret votes in the general assembly, and notice to employers 72 hours in advance and publication of the notice in the newspaper (GM 6-
30-87). The lack of likelihood that the requirement of strike declaration would be fulfilled was criticized again. Even the leader of m oderate groups, for example,
Medeiros, the president of the Metal Union of S3o Paulo (the largest union in Latin
America which represents 400,000 workers) commented that “this law will not be observed.” Unionists saw the bill as a clear intervention in the internal issues of the 1 50 labor movement. Vicentinho, the president of the Metal Union of S3o Bernardo argued
that the manner in which the strike was declared should be decided by the workers. He
also criticized the bill for stipulating that the strike should be determined only by the
unionized workers: “The struggles and strikes concern all the workers, unionized or
not” (6-23-87 JB). This time the government bill did not draw much attention in the
midst of the debates on the new constitution in the Constitutional Assembly. The
Committee of Social Order already approved the unlimited right to strike by this time.
The bill was simply ignored.
EXPLAINING SUCCESS AND FAILURE OF THE PAZZIANOTTO REFORM
SUCCESS IN THE REFORM OF THE UNION AUTONOMY
The labor reform effort by the Sarney government was geared to control the
increasing mobilization of the working class. The measures on union autonomy in March
1985 , that is, recognition of the CUT and the CONCLAT, repeal of the government regulation of union elections, and the amnesty of the union leaders were made by
Pazzianotto’s own initiative. However, there existed a consensus on the need to accept the reality of labor relations with the rising power of the new unionism during the last years of the authoritarian regime. It was reflected in the campaign addresses of Tancredo
Neves. He repeatedly promised that he would guarantee union autonomy and would respect the right to strike . On union autonomy, even the SNI did not resist (7-18-86
JB).
Employers, while aggressive on the strike issue, acknowledged the need for free and direct bargaining with the workers. Since the practice of direct bargaining with 151
Table 16: Pazzianotto reform: cleavage lines
Reform measure Supporters and reason Opponents and reason Union autonomy Labor unions, employers, (Amnesty to union leaders, politicians - spirit of Recognition of CUT and democracy, conquest of the CONCLAT, Autonomy of union right through the election) mobilization, reality in practice Union structure 1) the government, PFL 1) CGT, USI, federations and - democratization of the union confederations of the workers 1) Ratification of ILO structure, reduction of strike - fear of division in the labor Convention 87 (1985-87) movement, weakening of movement, fear of being (containing elements of union labor movement through the manipulated by the pluralism and end of union division of movement and employers, end of financial tax) drain of resources resource for the most of the unions 2) Law of union organization 2) CUT (1987) - fortification of labor 2) employers organization - Both were never voted in movement, enhancing - loss of power and prestige, the congress autonomy of the unions, end of financial source, restructuring the labor stimulating chaos and anarchy movement through the in the labor system, weakening of the moderate stimulating the strikes in the labor groups some essential services The bill of collective The government 1) CUT, CGT, USI, federations bargaining and strike - reduction of strike and confederations of (May 1985, July 1986, June movement, implantation of workers 1987) the practice of the direct - violation of the unrestricted bargaining right of strikes
2) employers organizations - too soft to confront the strike movement
combative unions had been established since 1978, employers’ resistance in regard to
the union autonomy was not significant. The political elite and employers had no other
choice but to acknowledge and respect union autonomy because it was faita accompli. If
the combative new unionism swayed the direction of Brazilian labor m ovem ent even
under the harsh repression of the authoritarian regime, there was no way to return to authoritarian mechanism in a democratic regime. On the other hand, it should be pointed 1 52 out that these measures were made with ease by the simple revocation of ministerial
regulation. The signature of the Labor Minister was all that was necessary.
The Pazzianotto’s commitment not to intervene in the unions was also another significant element that contributed to the establishment of the union autonomy. His strategy to control the strike movement was to encourage negotiation (interview with
Pazzianotto 12-14-93). He played the role of the mediator in almost all of the important strikes. If he could not be at the meeting, he sent his aides to encourage negotiation. He did not fear conflicts with conservative ministers and succeeded in persuading the hardliners by pointing out the greater risk of repressive measures on the labor movement.
FAILURE OF THE REFORM OF UNION STRUCTURE
The government effort to control the mobilization of the working class was crystallized through attempts to ratify Convention 87. It implied the possibility of a pluralist union structure and the extinction of the union tax. This posed a serious threat to the existing official union structure (federations and confederations) and the CONCLAT
(CGT after March 1986) which included many federations and confederations as members. They were very active in opposing the ratification of Convention 87 and the
Law of Union Organization through public statem ents and lobbying of president Sarney and the senators. The positions of labor organizations reflected the differences in their organizational base and strategy within the labor movement. The CUT which supported union pluralism did not occupy the majority in the labor movement, in terms of the number of unions affiliated to it and was promoting an aggressive organizational expansion. It challenged the strongholds of the moderate unions movement. Under the official union structure where the incumbent had the advantage, the most effective way 1 53 of challenging the existing system was the legal rule which allowed the existence of rival
unions at all levels.
Not only was the labor movement divided, but the theoretical and moral implication
of the ratification of Convention 87 was far from clear. Pluralism was more in tune
with the spirit of democracy but at the same time it might atomize the union movement
at the plant level and employers might create the yellow unions. The charge of dividing
the labor movement was a burden which the CUT faced. The CUT modified its rhetoric
later in a way to make the demand of pluralism more compatible with union unity. CUT
leaders said that they supported labor unity but it should not be imposed by law but
decided by the workers. Part of the problem that instilled a sense of confusion and
uncertainty was the lack of clear distinction between the concept of unity and a single
union principle. In the early days of public debate, unityunidade ( ) was frequently
confused with the single union principleunicidade ( ). The major newspapers also did not
make proper distinctions between the two. The uncertainty and fear accompanied with
the unfamiliar union structure after 50 years of the corporatist structure was one of
the obstacles to the adoption of Convention 87.
As for the union tax, conservative union currents which had many “phantom”
unions1 4 were afraid that their political standing would be undermined by the extinction of the union tax. Actually only a small number of unions were in a position to not be affected by the extinction of the union tax. However, even conservative unions were forced to pay a lip service to the elimination of state-guaranteed financial security due to the universal appeal of union autonomy. They opted to propose the gradual abolishment
14 “Phantom” unions refer to those inactive unions with small number of union members. In the official structure, each union had one vote regardless of the size. Thus unions with tens of thousands workers had only one vote just like the unions with several hundred workers. This was designed to control the influence of the big unions and possible challenge of the big unions against the system. These small unions had been the basis of the control of the federations and confederations. 1 54 of the union tax. The perception that only the unrepresentative unions would advocated the union tax made even the conservative unionists decide to advocate its elimination. The conservative unionists employed a double strategy: proposing more study to minimize the negative impact of the elimination of the union tax while vigorously lobbying for the maintenance of the union tax behind the scenes. Pazzianotto testified to this when he said that “I have documents of union leaders during the military regime, in which they ask for the implantation of Convention 87. When there was a political opening these same leaders changed their mind” (JT 2-26-91).
Another reason for the failure of the ratification of Convention 87 was the opposition of employers’ associations, especially the CNI and other confederations. Part of the reason why employers opposed union pluralism was the possible “chaos” in labor relations under the union pluralism in which they would have to bargain with various labor union factions. But the more fundamental reason has to do with the impact of union pluralism on relations among the employers. Exclusive representation through the corporatist system gave a group of business leaders a privileged position that could affect government policy and enable it to maintain contacts with the top political elites.
The exclusive representation made it possible for these business leaders to speak on the behalf of the whole business class. The power of these groups of business leaders was, just like the workers’ federations and confederations, based on the support of the bureaucratized employers’ unions. The introduction of union pluralism and the extinction of the union tax could have disrupted the existing power structure of the employers. 1 5 Another reason seems to have to do with the need to maintain the unity of
15 The competition between different tendencies of the employers were evident in the campaign for the president of the FIESP in 1992. The Emerson Kapaz of the PNBE (Pensamento Nacional dos Bases Empresariais: National Thinktank of the Base Employers) which represents the liberal employers of the small and medium sized companies, campaigned against Carlos Eduardo Moreira Ferreira who represented the big business. He criticized the FIESP for being “statist” dominated by the professional bureaucrats rather than serving the “grassroot” employers (Veja 7-29-92:80). 1 55 representation of employers interests in the context of the fragmentation of the rightist
political parties (PFL, PMDB, PTB, PDS). While business leaders have organized
several associations to enhance their political power since the establishment of the new
democracy, the basis of organization of such associations, in many cases, was still the
corporatist structure. The UB (Uni3o Brasileira de Emprescirios: Union of Brazilian
Entrepreneurs), for example, was constituted by the existing national confederations of
the employers (Dreifuss 1989:62). In contrast to labor, which developed peak
organizations outside the corporatist structure, the employers lacked alternative way of
organizing themselves except for the several voluntary associations which had limited
purposes.16
The government on the surface was unified In their support for the ILO Convention
87. But as was mentioned, there was suspicion about the impact of ratification. The
military was suspicious of the intention of Pazzianotto who had been a labor lawyer for the defiant S3o Bernardo Metal Workers’ Union. Moreover, union pluralism was supported by the radical CUT while the moderate unions, which had been the main interlocutor for the Sarney government, opposed it. There existed a curious policy coincidence between the conservative government and the radical labor organization, a coincidence of the means to accomplish opposite goals. Moderate unions which were less critical of the Sarney government opposed the government initiative while the trouble makers for the government supported the government measure.
On the other hand, congressmen, especially the leaders of the ruling coalition in the
Senate were not enthusiastic about passing the bill. For them, the deliberation of such a controversial issue was a political burden. There was no need to take a risk on such a
16 For the voluntary organizations of the employers during the Sarney government see Dreifuss (1989). 1 56 divisive issue. Moreover, the system had been there for 50 years. Both the PMDB and
PFL of the ruling coalition had nothing much to do with the labor movement. The labor
movement was more closely related to the opposition parties of the PT, PDT, and the communist parties. While the leftist parties except the PT tended to support the maintenance of the single union principle, the PMDB, the largest party, had no clear commitment to either side. If any thing, however, the PMDB tended to support the maintenance of the single union principle. For example, F. H. Cardoso, one of the leaders of the PMDB and an internationally renowned sociologist, presented a draft bill on union structure in 1985 which maintained the single union principle. Lacking mobilization or a strong lobbying of the party by the CUT to support union pluralism, the PMDB was leaning toward the maintenance of the single union principle under the heavy pressures of the conservative unions of employers and workers. Given the lack of commitment on the part of the politicians of the ruling coalition, the public pressure and the lobby were able to influence the congressional leaders to shelve the government draft bill.
FAILURE OF THE STRIKE LAW
The strike bills of the government did not call for much reform. They were not much different from the strike laws under the authoritarian regime. They did not reflect the reality of the Brazilian labor movement. The technical requirements for the authorization of the strike by the general assembly were intended to obstruct the large union’s strike movement. It was practically impossible for the big unions to assemble tens of thousands of workers in one place and conduct secret voting.
The government bill failed due to a lack of the support from both the employers and the workers’ unions. Employers’ associations wanted a stronger measure to control strikes. In the case of the CNI substitute bill, they wanted the Ministry of Labor to 1 57 intervene in the unions just like under the authoritarian regime. On the contrary, labor
unions, even the moderate ones, refused to put any restrictions on their right to strike.
Unions were united in refusing to discuss measures that limit the right which was conquered during the authoritarian regime.
Strike activity which had been formerly thought of as a criminal act and as a matter of police involvement began to change its image as a legitimate weapon for the workers.
The erosion of wages, instability of job tenure, and the recession made work stoppages a legitimate response for workers. Tancredo Neves recognized this and public opinion began to show favourable attitude toward strike action. Public opinion against the government control over unions/strike activity increased from 7% in 1972 to 42% in
1982, and 62% by 1989 (Mois6s 1993:164). The sectors which were not allowed to strike (public employees, “essential” activities) stayed on strike despite the illegality of the action. Most of the strikes were found illegal by the Court. In 1986 between the
January and November, 99% of 480 strikes that occurred in the state of S3o Paulo were found to be illegal (ESP 11-30-86). Once the legal authority of the strike law collapsed, labor unions did not respect the law governing strike activity. Workers’ unions had no new risk in mobilizing workers in the democratic regime compared to under the authoritarian regime.
On the contrary, democratization helped to generate more tolerance toward strikes.
President Sarney and even the military ministers said that strikes were normal in a democratic regime. While Pazzianotto was responsible for the strike bill of the government, ironically he helped to encourage the rejection of his bill by refusing to intervene in the unions. The unions had no reason to support the government bill that restricted the exercise of the right to strike. Workers had nothing to gain by supporting the bill and nothing to lose by ignoring it. 1 58 Moreover, the strike bill had almost no moral appeal. The old mechanisms of strike
control reappeared with only very minor modifications. The change was timid.
Pazzianotto, who appeared to be an ally of the working class when he refused to intervene
in unions, turned out to be just another member of the conservative government when it
came to the strike bill. Pazzianotto faced some constraints. The existing constitution
prohibited the strike of public employees and of unions in “essential” activities. The
technical requirements of the law were subject to the stipulations in still effective
authoritarian constitution and this prevented him from adopting more progressive
measures.1 7 Pazzianotto himself repeatedly emphasized the transitory nature of the
bill he proposed due to the fact that the CA would be convoked in 1987. Because of the
constitutional limit on reform, the CA was the only institution through which real
reform was possible. This again contributed to the fact that the unions ignored his strike
bills. In this respect Pazzianotto had little time to act. He should have carried out a
reform in 1985. In 1986 it was too late. In less than a year the CA was supposed to
resolve all of the important issues of Brazilian society and politics. No one would be
reasonably expected to respect a bill whose validity would last less than a year.
In the case of the strike bill, the lobbying of class organizations was insignificant.
The bill was so close to the old law that the labor unions simply denied and ignored the
draft bills. While the two bills (one in 1986, one in 1987) were sent to Congress, they
were not even picked up as an order of the day. Moreover, civilian politicians were more
liberal than the military in their views on the role of strikes in a democracy. In the
1 7 This was the result of the gradual, controlled transition. The CA was constituted only in February 1987 after the November 1986 election. This gap between the Constituent Assembly and the inauguration of the new regime was made due to the legal manipulation that gave Figueiredo 6 year presidential term while the Congress had still 4 years of mandate. The extra two years for Figueiredo was intended to assure the presidential control of the transition period, which had failed anyway due to the break-up of the government party, PDS. 1 59 early days of the New Republic, the leaders of the PMDB, PFL, PDS, and PT, reached
consensus on the way the New Republic should deal with the strike movement: to
encourage negotiation and to recognize strikes as a spontaneous and normal manifestation
of the democratic society (JB 5-1-85). Even the leaders of the PDS considered the
strike movement normal. Pimenta de Veiga, the PMDB leader in the Chamber, showed a
benign view of strikes when he considered violence in strikes (referring to the hostage
accident in the GM factory during the metal workers strike in 1985) an
“understandable distortion in a country that did not have democracy for 20 years" (JB
5 - 1 - 8 5 ) .
CONCLUSION
As is summarized in the Table 17, the measures on the labor autonomy had all of the
facilitating conditions: the corporatist system was partially displaced by the actual
practice of the labor movement; labor was united in demanding autonomy; autonomy had
been one of the most fundamental demands of the new unionism; business groups did not
raise any significant opposition; part of the political elite were committed to preserving
union autonomy; the moral appeal of union autonomy was clear.
This condition was not present on the issue of union structure: labor was divided;
business actively opposed the ratification of ILO Convention 87; there was a mismatch of
alliance, that is, the m oderate groups opposed the government while the radical groups supported the government bill; the moral and theoretical appeal of the reform was not clear.
The strike bill failed due to the lack of all of the facilitating conditions: the bill lacked moral appeal; the government had no ally in labor; business did not support the government bill but had different motivations than labor; labor pressure against the 160 bill was strong in the form of continuous illegal strikes and emission of public statements; labor was united in opposing the government bill; the strike was recognized as a legitimate weapon of the working class; Congress was inactive on the strike bill.
Table 17: Factors that affected the Pazzianotto reform
Factor Union autonomy Union structure Strike bill
Crisis of the Autonomy partially Partially challenged Strike law was being corporatist system achieved ignored Labor unity Labor was united in Labor divided on unionLabor was united in demanding autonomy pluralism and union opposing the tax government bill Labor pressure One of the most Conservative and Strong negative public pressing demands of moderate tendencies statements and labor actively engaged in continuing illegal lobbying against it strikes Business resistance No significant Employer unions Employers opposed resistance actively opposed ILO the government bill Convention 87 for being too soft Political opportunity Labor Minister was Policy alliance with No alliance structure committed to union labor was accidental autonomy and partial (only the CUT) Moral and theoretical Minimal requirement Fear, uncertainty, Government bill appeal for the democratic disputes were morally not appealing regime predominant
The most prominent aspect of the Pazzianotto reform was the veto power of labor and business organizations before a government which had the strong support of the military. What happened to the power relations between the state and social actors in
Brazil where basic power relations presumably did not change throughout the transition period? What explains this apparent lack of power on the part of the government vis- a-vis social actors in defining the labor relations issue? First, the government had to work under a reality in which simple repression or legal manipulation did not work any more. The increase of strikes in legally prohibited sectors and the legitimate status of the strike as one of the fundamental rights in a democracy was achieved through the 161 mobilization which took place since 1978. Almost all of the strikes had been
determined to be illegal by the Court but the strikes kept occurring. With the
parameters of the labor reform shaped by the combative unionism, and with the gap
between law and reality expanding, the success of the reform was dependent on the
response of social actors.
Second, the government lacked firm congressional support. The ruling coalition was
not a homogeneous political force. The PFL and the PMDB were in constant dispute over
ministerial positions, distribution of public funds, the scope of the reform, and the
question of Sarney’s mandate. The leaders of the ruling coalition, the PFL and PMDB,
formally supported the government bill in the m eetings of the Political Council. But the
PMDB was not enthusiastic about the government bill. With the PMDB’s ambivalent
position and the indefinition of most of the parties on the labor issues, the response of the Congress was subject to the pressure of lobbies. That is, political opportunity structure afforded interest groups ample space to exert pressure for the defeat of the government bill.
Third, the time and the authority given to the government was quite limited. The CA elected in November 1986 was expected to resolve all of the major issues. Whatever decisions made during 1985-86 were subject to change by the CA. The strategy of business and labor organizations was to wait until the CA began to meet. Since the gap between reality and law had been a part of political life under the authoritarian regime, the coexistence of the unreal law and illegal reality was not something impossible to bear. Labor and business opted to wait until a better political opportunity structure came along through the CA.
Finally, a consistent pattern of policy alliance that is supported by the existing political alliance did not exist. There was an inconsistency or a misfit between support groups and beneficiary groups. On the union structure, the government bill was 162 supported by the most defiant union groups while opposed by the moderate groups that
had been more willing to enter the pact with the government. Employers were engaged in
heavy lobbying to obstruct the government bill. The blurring of cleavage lines (or
multiple cleavage lines) over the reform issue was the result of the lack of a politically
imposing cleavage lines that might have converged the responses of the social actors into
a coherent pro- or anti-government position.18 The piecemeal approach of the
government toward the mobilization of labor, which employed talk of social pact, labor
reform, selective repression depending on the political and economic conjuncture,
allowed the individual actors to follow a narrow conception of self-interests rather than
acting on the basis of strategic considerations in relation to the power elites. The centripetal force of the core power elite to streamline the preferences of the social actors according the need of the government decreased with the democratization while the centrifugal force of the interest groups to pursue their group interests even against the wishes of the ruling elite was increasing.
18 Inference can be made to the bipolar system in international politics. The leading cleavage line of the pro- or anti-capitalist bloc in the bipolar system plays the role of streamlining the conflicts within each of the socialist and capitalist bloc. In the multipolar system conflicts within the capitalist/socialist bloc loom larger. In the case of Korea, confrontation with the North Korea converged the response of the social actors to the government policy toward the moderate/conservative orientations even after the transition, leaving little room for the growth of an independent social actor. CHAPTER V
LABOR REFORM THROUGH THE NEW CONSTITUTION
The most important occasion of labor reform was contained in the new constitution.
The Constituent Assembly elected in November 1986 began its work on February 1
1987 and declared a new constitution in October 1988. The process of constitution
making lasted more than one and a half years. Due to the long process, almost all of the
social forces were given the opportunity to present their views. Labor was particularly
active. The DIAP, lobby organization of the labor movement (endorsed by all the
currents of the labor movement including the CUT, CGT, USI, confederations,
federations, and unions) played a crucial role by providing unified draft texts on labor
clauses.
While the CA did not approve all of the labor demands, labor fared much better than expected. In the benefit dimension, labor achieved many new victories such as a 6 hour shift in the industries that operated 24 hours, expanded material reward for vacation and overtime. The major setback was the defeat of job security which continued to allow employers to fire workers at will with relatively light indemnification. In the pressure dimension, the CA recognized what labor actually conquered through the everyday practices, the unlimited strike right. On the union structure, the CA maintained the corporatist principle of the single union principle and union tax.
The most important parameter of the labor reform through the constitution was the distribution of power between the conservatives, centrists, and the progressives in the
CA. The fact that members of the CA, especially the centrists and moderates, are more 1 63 164 sensitive to public pressure was crucial to the many victories of labor through lobbies
and the mobilization of protests. This chapter will demonstrate that despite their
minority position within the CA the progressives had significant leverage in overcoming
the conservative forces through adroit strategies of alienating the centrists from the
conservatives and through the concentration of progressive forces in key stages of
voting. The success of the reform was made possible by a substantial number of
progressives in the CA, labor rights conquered through mobilization and actual
practice(“reality”), the unity of the labor, and effective lobbying and protesting by
labor organizations. The constraints against reform were set by the structural power of
business in a capitalist society, the threatening presence of potential anti-democratic
forces (the military and supporting political forces), and the division of labor.
NEW COMPOSITION OF POLITICAL ELITE
The newly elected CA was seen to be composed largely of moderates and conservatives.
The strength of the parties in the CA reflected this. Excluding the PMDB, the rightist parties (PFL, PTB, PL, PDS) constituted 35% of the members of the CA. The leftist parties (PDT, PT, PSB, PCB, PC do B) constituted about 10% of the members of the CA.
The PMDB, the largest party , was more heterogeneous. It had sheltered a wide range of political forces from the former supporters of the military regime to the communists.
72 of the 298 PMDB members (24%) in the CA were former members of ARENA (the government party before 1979). “Historicos" who fought against the military regime constituted about 46% of the PMDB members of the CA.
However, the distribution of parties does not provide a precise distribution of the political orientations of the members of the CA. Brazilian parties are notorious for their lack of discipline and the freedom by which candidates change party labels for the 165 sake of electoral convenience (Mainwaring 1990a, 1990b). Party programs are in most cases just a bunch of good ideas which no one takes seriously. While there exists a ideological spectrum along which each party can be located, the internal cohesion of parties is not very strong. The PMDB, the largest party, has been considered by many as a political front, rather than a party in the classic sense. Both leftist and rightist forces were divided across several parties.
Table 18: Party and regional representation of the Congress elected in 1986
Party North Northeast Southeast South Centerwest Total PMDB 35 84 91 55 33 298 PFL 16 69 26 12 10 133 PDS 5 14 8 9 2 38 PDT 2 1 16 6 1 26 PTB 2 2 14 - 1 19 PT -- 14 2 - 16 PL -- 7 -- 7 PDC -- 2 - 4 6 PSB 1 - 1 -- 2
PCB - 4 - 2 1 7 PC do B - 4 2 - 1 7 Total 61 178 181 86 53 559
Source: Baaklini, 1992:162
Another criterion frequently used to identify the political orientation of the political elite is social background. As the Table 19 shows, 37.7% of the members of the CA were capital owners. The middle class sector (managers and white collar) constituted almost
60% of the members. Members of blue-collar background comprise just six out of 559 members. This provides a picture that capitalist interests are heavily represented while the majority is constituted by members with a middle class background. Despite the apparent overall strength of conservatives and moderates, the fact that middle class members occupied a majority suggested a possibility that a progressive reform could be adopted depending on the issues at stake. 1 66
Table 19: Social background of the members of the Constituent Assembly (major parties and total)
PMDB PFL PDS PDT PTB PT Total* Capital owners 38.9 37.6 50.0 19.2 42.1 0.0 37.7 Managers 24.2 31.6 23.7 30.8 21.1 6.3 24.9 White-collar 36.6 30.9 26.3 46.2 36.8 75.0 36.3 Manual workers 0.3 0.0 0.0 3.8 0.0 18.8 1.1 Total (N) 298 133 38 26 19 16 559
Source: Fleischer, 1990:234 * Total include other minor parties: PL (7) PDC(6) PSB(2) PCB(7) PC do B(7).
According to a survey of the political orientations of the members of the CA, almost a third of the 559 members of the Constituent Assembly classified themselves as centrists; together with center right and center left, the new Congress has an overwhelming centrist character. In all, 438 deputies and senators (78.3%) were centrists in this broad sense of the term.
Table 20 : Distribution of political orientations among the members of CA
Left 52 (members) 9.3 (%) Center Left 126 22.5 Center 181 32.4 Center Right 131 23.5 Right 69 12.3
Source: FSP: 1-19-87
The survey is based on the self-description of one’s political orientation, which is not always in agreement with the public perception. This is not fully objective but is still a meaningful estimate in a country where leftist forces had been repressed for twenty years. The self-description reflects the political environment through which members of the CA perceive their roles and priorities. The fact that 31.8% of the 167 members described themselves as left and center left indicates that at least a third of the
members are actively identifying themselves as sympathetic to the issues of social
equality and worker demands.
The above distribution of political orientations shows that, despite the conservative
democratic transition, left leaning political forces were not that weak. The left and right
forces were almost evenly distributed. This was a rather unexpected performance for
leftist political forces considering that they had experienced harsh repression during the
20 years of military dictatorship. The leftist forces grew with the political
liberalization and the popular discontent on the military regime. The leader of the PDS,
the government party of the authoritarian regime, Amaral Neto said “the left is not
small as is thought commonly.” Leftist parties were based on firm ideological
commitment and were more disciplined and vocal in their demands. This factor led
Amaral Neto to comment that “my fear is not the forces of the left, but the cowardice of
the center and the right" (ESP 2-1-87 ).
The progressive deputy Cristina Tavares of the PMDB Iabeled30% of the PMDB,
80% of the PDT, and 20% of the PFL, as leftist forces, together with the PT, PCB, PC do
B, and PSB (CB 2-8-87). Another survey that interviewed 93% of the members of CA
reported that the right constituted 1%, the center right 5%, the center 36%, the center
left 40%, the left 13%, and the extreme left 1% (FSP 3-21-87). Compared to the data
in Table 20 which had been surveyed in the middle of January, there was a substantial
increase in the center left in this survey which was made in the middle of March, almost one and half months after the opening of CA. It suggests that after the opening of the CA more members wanted to project themselves as progressives.
Some progressive members of the CA were confident that the center would move toward the left when the electorate began to mobilize and pressure the members of the CA at the time of voting (CB 2-8-87). The progressive leadership of the PMDB in the CA 168 represented by Mario Covas and Fernando Henrique Cardoso thought that the popular mobilization and the participation of the general public were favorable to the victory of the progressive cause in the CA. The idea of popular participation was realized by making it possible that the amendment with 30,000 signatures would be treated just like the amendment of the members of the CA.
The fact that the centrist politicians occupied the majority position (including center-left and center-right) meant that they would be less influenced by ideological concerns than by situational factors, such as political exigencies, responses of the electorate, and the strategy of each of the core political forces. It signifies that there existed a substantial margin of political maneuver. There was a substantial room for emotional discourse, electoral pressures, and effective congressional strategies to affect decision making in the CA.
In sum, the analysis of the composition of members of the CA shows that despite the prominent position of capitalists and the overall strength of conservative parties, the predominant tendency of the CA was centrist. This implies that depending on congressional strategy and public pressure there was the possibility for the majority of the center ally with leftist/progressive members in order to gain approval for a pro labor constitution.
FORMATION OF BLOCS AND FRAGMENTATION OF THE PARTY LINES
The fragmentation of political forces across the parties prompted the formation of political blocs that were supraparty in nature. The leftist parties and the progressive wing of the PMDB, were aware of their minority position in the CA, and got together to form progressive blocs in social and economic areas. These blocs were never formalized but took the form of temporary alliances for voting on controversial issues. 1 69 Conservatives led by the PFL leadership called for the formation of the Tancredo Neves bloc. The conservative wing of the PMDB formed the “Democratic Center” whose adherents numbered 107 members (FSP 3-15-87).
Thus two broad ideological blocs were formulated before the CA began to work on the text of Constitution. The left-oriented progressive bloc was comprised of the PT , PDT,
PCB, PC do B, and the left wing of the PMDB. The “moderate” (read “conservative" in this context) bloc called the Tancredo Neves bloc was made up of “moderates” of the
PMDB, PFL, PDS, PTB, PL. The number of members of the CA who could participate in the leftist bloc wasl 50, according to the Lula’s counting. The DIAP, a labor lobby organization in the Congress, counted more than 100 members of the CA from all of the parties who were committed to union demands.
Table 21: Profile of Party genealogies of the members of the PMDB in 1987
Party genealogy: 1978-82 sequence ARENA- ARENA- MDB- none- Others None- Total PDS MDB PMDB PMDB None Social economic status Capital owners 56.6 57.1 27.7 34.0 35.7 57.2 38.9 Managers 26.7 26.2 27.7 14.9 14.3 21.4 24.2 White-collar 16.7 16.7 43.9 51.1 50.0 21.4 36.6 Manual workers 0.0 0.0 0.7 0.0 0.0 0.0 0.3 Total (%) 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Regional profiles North 6.6 9.5 9.5 21.3 7.1 17.9 10.9 Northeast 70.1 23.9 21.2 23.4 42.9 25.0 31.8 Southeast 10.1 21.4 37.2 40.4 14.3 25.0 32.4 South 6.6 19.0 21.9 10.6 14.3 28.6 15.4 Central-West 6.6 26.2 10.2 4.3 21.4 3.6 9.5 Total (%) 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Total (N) (30) (42) (137) ..(47) (14) (28) (298)
Source: Fleischer, 1990:238 170 The formation of the bloc was also promoted by the fact that the largest party, the
PMDB, was not a homogeneous political force. As is shown in Table 21, it contained a substantial number of former government party (ARENA) members (24.2%) whose political power was based on the rural Northeast and Centerwest regions of the country.
Most of them were capital owners or business managers (about 80%). The “historicos”
(MDB-PMDB) occupied 46%. The leadership of the PMDB was constituted by these
“historicos” such as Ulysses Guimaraes, Fernando Henrique Cardoso, and Mario Covas.
The leadership of the PMDB was not leftist but reform-oriented enough to ally with the leftists.
The leftist parties, with the support of newly elected members, played an important role in determining the organizational procedures for deliberation on the constitution.
They opposed the idea of a Grand Committee proposed by the president of the PMDB and the CA, Ulysses Guimaraes. The leftists and newly elected members did not want to be alienated from the process of elaboration of the constitution. The left worried that the mostly center-oriented leadership of the CA might not permit the expansion of social rights. The newly elected members of the CA, which constituted the majority, did not wanted to simply follow the old politicians. United, they ended up defeating the idea of a
Grand Committee which was supposed to be made up of 83 members. The newly elected members complained that the grand committee would “create first and second class members of the CA” and would have “the characteristic of activities among friends”
(JBs 1-22-87). The upcoming election of the president of the Chamber for which
Ulysses was the candidate and the complaints of the majority of the members of CA led
Ulysses to give up the idea of a Grand Committee. Thus all of the members of CA were allowed to participate in the process of elaboration of Constitution.
The idea of thematic committees that divide the constitution according to the specific themes or subjects finally prevailed with the initiative of the small parties of the left 171 and the right (PT, PDT, PL) and the support of the progressive leaders of the PMDB
(Mario Covas, F. H. Cardoso, Nelson Jobim) ( FSP 1-30-87, Baaklinil 992:167).
The blocs were still thriving in the second year of constitution making. In late 1987,
the alliance of the center-right and the right resulted in the biggest bloc, theCentrSo,
whose orthodox members numbered 230. Within the PMDB, the conservative wing of
the PMDB was organized around theCentro Democratico which numbered 61 members.
The left wing of PMDB was organized through the MUP Movimento( de Unidade
Progressista: 20-30 members). Centrinho was the bloc that grouped together the
liberal and leftists ( in its peak it included 139 members).Movimento Democratico
developed from the Centro Democratico to undermine the rightist of the CentrSo along the
centrist line, arguing that they cannot accept the leadership of the PDS, the former
government party under the military regime. Other small groups included the
“ Modernos■” who were the liberals within the PFL, and“Consenso” referring to the
groups of members of the moderate of PFL and the part of PMDB. The “Group of 32”
were the members who were following senator Jose Richa. These group were not
necessarily exclusive of each other and the form of alliance was loose and temporary,
varying depending on the issues (JB 2-14-88).
WORKS IN THE SUBCOMMITTEE AND COMMITTEE
The CA established 9 committees to write the text of the constitution. Eight thematic committees were divided into three subcommittees each. The ninth committee was called the Systematization Committee whose function was to put together the final text of the eight thematic committees. The labor issue was dealt with in the Subcommittee on the
Rights of Workers and Public Employees which belonged to the Committee of Social
Order. 1 72 The progressive leadership of the PMDB managed to control the rapporteurs of the
committees and subcommittees in order to control the drafting of the Constitution. The
rapporteurs of the nine committees were monopolized by the “historicos” of the PMDB.
In exchange, the PFL got the presidencies of most of the committees. Though the left and
the center-left were a minority in the full assembly (178/559), they occupied half of
the rapporteur positions (12/24) . The right and the center-right (200/559) and the
center (181 /559) had 6 rapporteurs each. According to the agreement made between
the leaders of the PMDB and the PFL, the moderate had to support the left leaning
members occupying the rapporteur position in the Subcommittees.
The composition of the Subcommittee of Workers’ Rights was considered the most
progressive among the 24 Subcommittees. The old demands of the labor unions met
approval without any serious challenge. They included the monthly adjustment of wages,
40 hour work week, 120 days of maternal leave, minimum wage determined by the
Congress, the unrestricted right to strike, annual vacation paid at double the normal wage, unionization of public employees (FSP 3-23-87). Only job security became a quite controversial issue. Even the progressive members of the CA were critical regarding the draft on job security (FSP 3-29-87).
The Subcommittee of Workers’ Rights was composed of a total of 22 members: the
PMDB had 11, PFL 4, PDS 1, PDT 1, PTB 1, PT 1, PCD 1, PC do B 1, PCB 1 (FSP 4-
12-87). The rapporteur of the Subcommittee of Workers’ Rights was the deputy Mario
Lima of the left wing PMDB, who had been the president of the Petrochemical Workers’
Union of Bahia (1980-86). Out of 22 members of the Subcommittee, 10 were formerly or currently union leaders (FSP 4-29-87).1 According to DIAP, 7 members of the
Subcommittee were representing employers position while the rest of the 15 members
1 According to DIAP unionists in the Subcommittee were 8 out of 22 members. DIAP, Boletim da Constituinte. No.5, April, 1987 173 were supporting workers’ rights. (DIAP, Boletim da Constituinte, No 5, April 1987:4-
7) This was a quasi-colonization of the Subcommittee by the left and center-left forces.
In late April the DIAP presented its own draft which had been approved by the three
peak organizations (CUT, CGT, USI) and three national confederations. The Subcommittee
of Workers’ Right unanimously adopted the proposal of the DIAP (FSP 4-29-87). In
most cases, the bill presented by the rapporteur of the subcommittee was elaborated
based on suggestions and contributions by the civil organizations. The fact that
employers failed to present any suggestion and that the DIAP draft got unanimous support of the labor movement was the most crucial factor in garnering labor’s overall success
in the CA. The DIAP draft set the tone of the debate in the Subcommittee and in the
Committee. In this respect, the DIAP played a crucial coordinating role in the labor issues in the CA (interview with Ulysses Riedel).
Another factor that helped the union forces in the Subcommittee was the fact that the workers’ organizations (unions, confederations, peak organizations, lobby organizations of the working class) were amply heard while the position of the employers on labor issues were barely heard. Employers at this stage was not organized to deal with labor issues. All along until the new constitution was promulgated, the employers' strategy was a passive one, that is, to “add commas and qualifiers” to the labor-initiated proposals (interview with Carlos Alberto Cidade, Coordinator of the Legislative Affairs of CNI, 12-6-94). Table 22 shows the participating organizations and the issues of the public hearings.
In other Subcommittees it was observed that many left-leaning rapporteurs had a hard time putting their drafts through the Subcommittees. For example, the rapporteur of Subcommittees of the Agrarian Reform, of the State Role in the Economy, and of the
Financial System were under threat of removal from their position for lack of support.
The rapporteur of the Subcommittee of Agrarian Reform, Osvaldo Lima Filho could not 1 74
Table 22: Public Hearings in the Subcommittee of Rights of the Workers and the Public Employees and in the Committee of Social Order on the workers’ rights (between April 23 and July 5, 1987)
Organizations Major issues of hearing DIAP Strike law USI Minimum wage CONTEC Workers’ rights Brazilian Union of Public Information Influence of informatics in the labor relations National Confederation of the Workers in the Communication Workers’ right and the Publicity National Confederation of Commercial Workers Minimum wage National Confederation of the Liberal Professions Unification of the juridical regime of the workers National Confederation of the Workers in the Land Transpor. Strike right Confederations of the Industrial Workers ILO Convention 87, the work of DIAP National Confederation of the Fishermen Independence of the category Minister of Labor Labor right Minister of Administration Administrative reform Domestic Workers of Brazil Recognition of the category and the unionization of the domestic workers Confederation of the Public Servants of Brazil Public servant National Confederation of Workers in the Transportation Union organization in the Sea, Air, and River National Association of the Teachers in the Higher Education Union organization Superintendency of the Development of Pernambuco Fishing activities Ministry of Planning Guarantees to the workers DIEESE Working hours, Job security, Representation of workers in the work places Movement of the Rural Women of Brejo Paraibano Rights of the female workers Workers Union in the Spinning and Weaving Industry of Rights of the female workers Salvador Metal workers Union of Sao Paulo Equality of women in the work Interunion Department of Study and Research on the Health Health and working conditions and Working Environment Confederation of the Professors of Brazil Right to unionization National Confederation of the Workers in the Agriculture Union right CGT Union structure CUT Union liberty and autonomy National Committee on Children and Constitution Wage policy to the youth National Confederation of the Commerce Values of union
Source: Assembleia Nacional Constituinte, 0 Processo Historico da Elaboracao do Texto Constitucional. V3, 1993, Brasilia: 171-174 1 75 even put up his draft for a vote. Instead an alternative draft was approved (FSP 5-28-
87). The conservatives successfully blocked the idea of the progressive rapporteur
through their majority and in many cases had not faced serious problems in approving
their views in the Subcommittees. This led the PMDB leader in the CA, senator Mario
Covas, to admit the need for better organization of the center left “not to lose more space
to the right” (FSP 5-26-87).
The Subcommittee of the Workers’ Right was an exception to this conservative trend.
It approved many of the old demands of the workers, especially job security according to
which employees can be fired only through judicially proven grave fault, the reduction
of working hours from 48 to 40 hours, and the unrestricted right of workers to strike
(FSP 4-29-87). The first two issues were considered the most important issues among
the labor demands by the DIAP. Other issues approved in the Subcommittee included the
maintenance of the single union principle,^ having the minimum wage set by Congress,
prohibition of hiring temporary workers in the case of a strike, provision of
unemployment insurance, workers’ participation in the management of public
enterprises, and factory committee in the work places.
By the end of May 1987 the work in the Subcommittee was over and the Committee of
Social Order took over. The Committee of Social Order had the following composition: the
PMDB 33, PFL 1 5, PDS 4, PT 3, PDT 3, PTB 2, PL 1, PCB 1, PC do B 1, with a total of
63 members. Many of the PMDB members in the Committee of Social Order were
considered left-oriented (FSP 3-31-87). While the progressives were concentrated in the Committee of Social Order, the conservatives were more preoccupied with the
Committee of Economic Order. The rapporteur of the Committee of Social Order was the
2 Despite the disagreement on the union structure, the CUT signed the DIAP draft. The PT, linked to CUT, later put the amendment that would abolish the single union principle but was defeated. 1 76 senator Almir Gabril who belonged to the progressive wing of PMDB, who later joined
Mario Covas after the creation of PSDB in 1988.
Contrary to the Subcommittee, the pro-labor force in the Committee of Social Order
did not have a majority. Out of 64 members of the Committee, only about 25 members were ready to approve the progressive draft of the Subcommittee of Workers’ Rights, while about 20 members opposed the draft radically, especially the text on job security,
the unrestricted right to strike, and the reduction of working hours. About 19 members were centrist in these issues (FSP 6-6-87).
The most controversial issue was job security. The conservatives tried to eliminate job security and instead wanted indemnification for workers dismissed without a just cause. The draft of the conservatives also maintained the 48 hour work week, 90 days of maternal leave, elimination of the double payment for vacation, and suppression of the prohibition of extra hours (FSP 6-10-87).
The progressive leadership of the PMDB and the rapporteur of the Committee of
Social Order tried to ensure the support of centrists and reduce the opposition of the right by making some minor concessions. One of them was the concession in regard to job security. The bargaining of the rapporteur with the conservative and progressive wings of the Committee resulted in the attachment of some restrictions for which job security would not be guaranteed: 1) cases of judicially proven grave error 2) contracts of less than two years 3) occurrence of “economically insurmountable technical fact or adversity in the management of the establishment.” This concession was inevitable considering the composition of the Committee of Social Order. Other concessions
Included: the decision to set the minimum wage in relation to increases of GDP; strikes were allowed only when employers would be notified in advance; “essential service to the community” had to be provided by workers during the strike; the elimination of free food for workers and of monthly adjustment of wages. 177 Despite the challenge of conservatives and some concessions made to reduce the level of opposition, the final draft of the Committee of Social Order maintained most of the original text of the Subcommittee: job security, 40 working hours, unlimited right to strike, a maternal leave of 120 days, vacation paid at double the normal wage, unemployment insurance, factory committees, prohibition of hiring temporary workers in the case of a strike. The progressives in the Committee were not satisfied with the final draft, but the evaluation of the DIAP was that the result was “amply favourable to the workers” due to the “serious and com petent work” of rapporteur Almir Gabriel
(DIAP, Boletim da Constituinte, No.9, June 1987).
VOTING IN THE SYSTEMATIZATION COMMITTEE
In the Systematization Committee the progressives and the conservatives were evenly divided in numbers. Out of 93 members of the Committee, 36 were progressives,
34 were conservatives, and 23 were centrists (DIAP, Boletim da Constituinte, No 9
1987). Again the centrists were playing a crucial role due to the even distribution of forces between the progressives and the conservatives.
The hottest issue, job security, was maintained despite the repeated challenge of the conservatives and the protests of the employers.3 A major setback was the defeat of the
40 hour work week. Instead 44 hour work week was approved as a compromise. Most of
3 Employers began to mobilize in June 1987. About 5,000 employers of the Rio Grande do Sul met in Parque de Exposigdes Assis Brasil and the representatives of the 105 business entities declared “Manifesto for the Business Liberty” to repudiate the reduction of the working hours, job security, and unlimited strike right approved by the Committee of the Social Order. UB (Uniao Brasileira de Empres^rios) launched one of the most impressive campaigns using TV and newspapers against job security and reduction of working hours. PNBE also organized “A national day of reflection and protest against the job security" involving 3,000 business entities. See Dreifuss (1989:1 87-1 89). 178 the issues dealing with workers’ benefits remained intact which included: overtime paid at double the normal wage, previous notification of 30 days before dismissal, right to indemnification in the case of spontaneous resignation, 120 days of maternal leave
(DIAP, Boletim do Constituinte, No.13, 1987). Overall, the draft approved in the
Systematization Committee was still favourable to workers.
The voting behavior of the political parties in the Systematization Committee is shown in Table 23. The five leftist parties supported workers’ rights in 100% of the votes. The four rightist parties (PMB, PDS, PFL, PL) showed less than a 40% support rate for workers’ rights. The PMDB showed a great deal of support for workers’ rights with a 75% rating. This was due to the participation of the many members of the MUP, the progressive bloc of PMDB in the Systematization Committee.
Table 23: Voting in the Systematization Committee on the workers’ right (%)
Political party Number of members In favor of workers Against rights
PT 2 100 -
PDT 3 100 -
PC do B 1 100 -
PCB 1 100 -
PSB 1 100 - PTB 3 88.33 11.67 PMDB 49 74.50 25.50 PDC 1 60.00 40.00 PDS 6 39.65 60.35 PMB 1 38.46 61.54 PL 1 36.84 63.16 PFL 24 33.83 66.17
Source: DIAP, Boletim da Constituinte, No.13.Nov. 1987:11
According to the voting record provided by the DIAP (Boletim da Constituinte,
No.13,1987), out of 49 PMDB members, 13 always voted for labor rights together with the five leftist parties. Seven members voted for labor rights more than 75% of the 179 time. Thus out of 49 members 20 members were active supporters of labor rights
(40%), leading to the favourable outcome in the Systematization Committee. If we
include 21 substitute members who participated in the voting, 22 members always
voted for the labor rights while 11 members voted more than 75% of the time. Out of 70
members of the PMDB who participated in the voting in the Systematization Committee,
33 members (47%) were active supporters. The progressive forces of the largest party
were concentrated in the Systematization Committee. Progressives (who voted for the
labor rights more than 75%) constituted 40% (47% if substitutes are included) of the
PMDB members in that committee. Compared to the usual 30% proportion of
progressives in the PMDB this was almost 30% (60% if substitutes are included)
over-representation of the progressives in the Systematization Committee. Twenty one
(25 including the substitutes) members of the PMDB voted for workers’ right 50 to
75% of the time. Only 8(12 including substitutes) voted for the workers rights less
than 50% of the time. The favourable result in the Systematization Committee was due
to the concentration of the PMDB progressives in the Committee and the support of
centrists for workers’ rights.
Out of 20 major votes on labor rights, the PMDB voted 13 times with a high level of
homogeneity, that is, 75% of the members voted for workers rights. For the remaining
seven votes, PMDB members were divided more or less evenly. The PFL voted 15 times out of 20 votes with the same level of homogeneity (75%): four times for and seven times against the workers’ rights. Workers rights were approved only when the PMDB members voted as a homogeneous group. The failure of the amendment for workers’
rights occurred when the PMDB was more or less evenly divided and the PFL voted against it. Thus the role of the centrists, especially those of the PMDB, were crucial. 1 80 MOBILIZATION OF THE CENTRAO
The over-representation of the progressives of the Systematization Committee led to the discontent of the conservatives. Many centrists were also discontented because they were excluded from the Systematization Committee. This led to an alliance between the centrists and the conservatives by the end of 1987. The Centrao was organized as the largest bloc. About 300 members of CA were grouping under the banner of the Centrao.
They wanted to change the rules to change the content of the draft approved in the
Systematization Committee. The existing rule was that in order to defeat any article in the draft in the plenary session it was necessary for the absolute majority, 280 members of the CA, to vote against the provision. It was very difficult to collect votes continually for each controversial article of the text. The proposal of Centrao was: whenever an article receives an amendment and is approved by the majority, the article is abolished and an amendment takes its place. If an amendment is not approved, the original article is not saved yet. The original amendment has to be ratified by a majority vote. Moreover, the amendments of the Centrao came to have priority in the text of
Systematization Committee, because they were signed by more than 280 members. If the text of the Centrao was not approved a 24-hour suspension was stipulated in search of an agreement. The passage of proposals of the Centrao created a need for agreement on the part of both the conservatives and the progressives, because none was a commanding absolute majority. Thus the polemical issues had little chance of approval without negotiation.
The general pattern of agreement was that the Centrao conceded a less fundamental part of their am endm ents to the progressives and protected the essence of Brazilian capitalism, such as the guarantee of the right to private property and the freedom to dismiss workers. On the part of the progressives, it was risky to push much beyond the 181 existing distribution of power. The accumulated discontents were feeding the tensions
between the Executive, the military, and the conservative employers on the one hand,
and the CA on the other hand. The threat of Sarney to take the issue of his mandate to the
Federal Supreme Court revealed the real possibility of an institutional impasse. The
rumors of a coup were considered not unreal, though not imminent.
The members of the Centrao did not share common political goals or orientations
other than the change of the internal rule in deliberation of the text of constitution. The
Centrao included both liberals and conservatives as well as centrists. Once the rule was
changed, the Centrao began to lose its predominant power. By early February 1988, the
important part of Centrao, a total of 61 members of the Centro Democratico returned to
the leadership of the PMDB, supporting the idea of “consecrating the advances in the
social and economic areas."4 Another smaller group ofEvangelicos also left the group
due to their differences on divorce and abortion.
The Centrao lacked effective leadership. The leadership was multiple and informal.
There was a lack of communication between the members and leaders of the group. The
rhetoric of the extreme right on the part of some leaders of the Centrao also isolated the
moderates from the group. Many simply joined the group not because of its ideological appeal but because of their desire to change the internal rules. 5
Due to the lack of effective leadership the Centrao tried to recruit a renowned leader such as senator Jarbas Passarinho for his prestige, who declined the offer for being too late for him to play any significant role and asked for the change of orientation of the
4 Their real intention was to gain more influence within the party and positions in the technical committees of the Chamber. Remaining in the Centrao ran the risk of defeat in the internal competition due to the negative public opinion on the Centrao (JBs 2-14- 88 ).
5 For example, deputy Manuel Moreira said, “I prefer to vote with the PT when it comes to social rights. After all, the Centrao is a pure fiction. It never existed. They are just a group of people who wanted to change the internal rule.” He also cited the pressure from the electorate to desert the group (CB 2-11-88). 1 82 group from “center” (read conservative) to “center-left" (read moderate) as a
precondition of his acceptance. According to one of the leaders of Centrao, the orthodox
members who always voted with the orientation of the group were 230, 41% of the total
of 590 members (FSP 2-12-88). The conservatives with relatively homogeneous
orientation were far less than half of the whole members of the CA.
As the power of Centrao in the plenary session of the first round of voting was not so
overwhelming, the Centrao was forced to negotiate with the progressive leadership of
PMDB, the senator Mario Covas. For his part, Covas was also inclined to negotiate with
the Centrao. First, the political force that supported his leadership was not strong
enough. He was able to command just a little bit more than a half of PMDB members in
the CA. He was considered to command about 150 votes altogether (JBs 2-14-88). Out
of 510 members who usually participated in the voting, about 130 members were
fluctuating over the issue and the emotional mood of the day (JBs 2-14-88). This led to
a situation where the majority was gained by the side which had competence in the
point-by-point negotiation (Deputy Antonio Britto of PMDB, JB 2-1 7-88).
The negotiation was also necessary because negotiation could lead to a further
weakening of the Centrao. The intransigence of the rightist leaders cost Centrao dearly.6
The intransigence of the progressives might cause the moderates to flock around the
Centr§o and reinforce the conservatives again. The negotiation left the committed
rightists and leftists discontented. Sometimes these committed minorities took the matter to vote even knowing that their amendment would be defeated. But overall the alliance between the left and the progressives of the PMDB was maintained due to their common ground, that is, the draft of the Systematization Committee.
6 For example, the conservative leader of the Centrao, Bonifacio and Jose Lins, put their amendment on the right to property in vote even after the agreement with the PMDB leadership. The result was their defeat 236-248. Out of 291 members who signed the amendment of Centrao, 28 voted against it and 37 did not appear, 8 abstained (JB 2-17-88). 1 83 In the first several round of votes, it turned out that Centrao was not an
insurmountable “steam roller” (rol compressor) but just the largest bloc within the
CA. At the time of its peak, the group numbered 320 members, but after the exit of
Centro Democratico andEvangelicos, and many other individual desertions, the group
numbered just about 230. It had to depend on negotiations with the progressives to
proceed with the business of the CA. This meant that radical change was impossible, but
did not necessarily mean that major advances in the social area were impossible if the
progressives were able to enlist the support of the centrists. Moreover, public
pressure from labor organizations led many members of the Centrao to desert the group
in the voting.
The left was observed to behave with discipline influencing the most docile and timid
members of the CA through its campaign in the street and electoral pressure. During
February 1988, the negative campaign of the CUT against members of the Centrao was
quite effective. The CUT distributed posters printed with the picture, telephone
numbers and addresses of those members of Centrao who opposed job security. These
posters called those members of the Centrao “traitors of the people". Tens of thousands
of CUT posters were sent to each state despite police intervention (JT 2-20-88). Many leaders of the conservatives were worried that many conservatives and centrists acted out of fear of being called as “traitors of the people” by the CUT posters and fear of the resulting negative image.
LABOR ISSUES IN THE PLENARY SESSION: THE FIRST ROUND
BENEFITS FOR WORKERS
Job security was the most controversial labor issue in the CA. In the text of the
Systematization Committee, job security was maintained with restrictions in several 1 84 exceptional cases. Employers were not allowed to dismiss workers except 1) for a
judicially proven grave error on the part of the workers, 2) in the case of short term
contracts, 3) uncontrollable changes in the economy, technology, and the management of
the firm. Job security was one of the old demands of the “new unionism” which emerged
since 1978 . Employers had been dismissing workers in order to reduce labor cost
before they reached the higher level of wage. Then they used to rehire the workers at the
previous lower wage level. Moreover, the arbitrary power of the employers to dismiss
workers was used to threaten the striking workers. Militant workers had been
systematically eliminated in work places and this had impeded the further development
of the labor movement. It is no wonder that the DIAP listed job security as one of the
most important issues in the CA7 Employers had been vigorously opposing job
security under the banner of “free initiative”, which had been one of the demands made
to the new government to decrease state intervention in the economy.
The conflict on the issue of job security was resolved only after 15 days of impasse
with the agreement between the Centrao and the leadership of PMDB over the opposition
of leftist parties. It was approved by 373 vs.l 51. The approved text compensated the
workers dismissed without just cause with 40% of FGTS. The existing compensation was
10% of the FGTS. Senator Covas, the PMDB leader in the CA, was accused of having
betrayed the workers for this agreement. Progressive indemnification, the idea of the
Centrao was opposed by the three peak labor organizations and the National
Confederations of Industrial Workers (CNTI), but found the support among the leaders of
the “Unionism of Result,” Medeiros and Magri.
7 The DIAP gave the highest importance to the matters of job security, 40 weekly working hour, six hour shift, assigning 1.5 point each when they recorded the score of the members of the CA on the labor issues. Other issues such as minimum wage set by the congress, prescription, vacation paid double the normal wage were given 1 point each. Strike right and factory committee were given 0.5 each. See DIAP, Quern Foi Quern na Constituinte. 1988:29-30 1 85 The approved text did not satisfy the all the leaders of the Centrao . But at the time of
the agreement, the negotiations had proceeded too far to withdraw and withdrawing from
the negotiation could stigmatize the Centrao as a radical group interested only in
confrontation. Moreover, major business leaders sent a sign of support for the ideas of
the Centrao during the negotiation. Employers in general liked the approved text. The
president of the FIESP supported the approved text. The president of the CNC said the
decision was “mature and responsible.” The director of the Pao de Agucar Group said
“the agreement was good and the negotiated agreement cannot please everyone” (GM 2-
25-88). 40% of FGTS for the workers dismissed without just cause was considered not
too much of a burden.
Covas’ concession on job security was based on three major factors: 1) the
aggravation of the institutional crisis and the need to accelerate the progress on the
constitution^; 2) fear that confrontation might reunite the Centrao; 3) the perception
that the agreed text is not far from original position of the leadership of PMDB (JB 2-
24-88). According to senator F.H.Cardoso, the leader of the PMDB in the senate, the
PMDB leadership approved the text on job security due to the three dangers that
confronted the CA: the Planalto (the presidential palace), the right wing of the CA, and
the conservative employers. He said “the Planalto worked against the agreement because
it wanted to create a climate of unrest in the CA” (FSP 2-25-88). Other members of the PMDB shared the perception. Deputy Cid Carvalho said the impasse on job security
“could have provoked an alliance of the extreme sectors of the employers with the extreme sectors of the military” (FSP 2-25-88). In fact, the possibility of a coup was not imminent. What worried the leaders of PMDB was the loss of initiative in politics in
8 Deputy Ulysses, the chairman of the CA and of the president of the PMDB, was crucial in persuading Covas to accept the revised draft of Centrao with the argument that further impasse in the vote might put the process of democratic transition at risk (Globo 2-24- 88 ). 186 general. The institutional impasse, accumulation of discontents among the business
circle, ineffectiveness in the progress of the CA could have deprived the PMDB
leadership of the initiative in leading the political agenda.
The reduction of work hours from 48 to 40 hours per week has been one of the old
demands of the labor movement. In the Systematization Committee it was defeated. The
left tried again to pass the amendments of 40 and 42 weekly working hour in the
plenary session, which failed by a margin of more than 100 votes. Despite all the
argument for the reduction of working hours, the agreement between the Centrao and the
leadership of PMDB (44 hours) prevailed (CB 2-25-88).
The maximum 6 hour shift for the sectors that need uninterrupted operation (such
as steel, petrochemical, and health industry) passed with a 324-125 vote. The
amendment of the Centrifo that substituted the “maximum working hours” to “special
working hours" was defeated (271-209). Employers were complaining. The president
of the CNI, senator Albano Franco argued that this would increase the cost average of
33% (FSP 2-26-88). The FIESP demanded this be the object of collective bargaining, complaining about the intervention of CA on the economy. Some employers were lobbying hard to affect the decision but failed.
The CA also approved the amendment that maintained a universal minimum wage for the country which would be determined by law. The 13th wage to the retired was also maintained according to the agreement between the leadership of the PMDB and the
CentrSo. The CA also approved the “at least 50%” more for overtime. The approval was the result of the fusion of the amendments and approved with a vote of 307-112.
Currently CLT was providing 20-25% more for the first two hours of overtime. But it had no provision on the cases where overtime lasted more than two hours. Various unions achieved remuneration of 50% from the third extra hour and even got more than the CLT provision for the first two hours of overtime (FSP 2-26-88). 1 87 The CA also approved a five year period during which workers could claim grievance against employers. This was the result of the agreement among the PMDB leaders,
CentrSo, and the leftist parties (405-22). The time limit was eliminated in which rural workers could make claims for the injuries inflicted during work (formerly 5 years). A two year period for judicial action was also approved (333-1 15). A maternal leave of 120 days was maintained. Paternal leave of 8 days was passed with the emotional appeal of the deputy who proposed it, which before had been just one day for registration.
While the deliberations on labor issues took place the influence of the CentrSo was much reduced. The leading force at this stage was in the hands of the PMDB leadership.
An estimate of the PT deputy Jose Genoino was that the majority of the members of the CA were under the influence of Ulysses. According to him, “savvy groupm ( iolo) affects
280 votes while the left and the hardliners of the Centrao have 120 members each.” The large number of defections by members of the CentrSo was attributed to the “nazifascist process of intimidation promoted by the CUT” by one of the leaders of the CentrSo (FSP
2 - 2 6 - 8 8 ) .
These measures favourable to the workers irritated hardliners of the CentrSo. They criticized the members who approved the text for not behaving with social responsibility. Softening of the PMDB leadership on job security diminished the cohesion of the centrist members, who feared the domination of the CA by a small number of radical progressives, to the CentrSo and led them to follow the orientation of
Covas. The elimination of the centrists’ preoccupation that the PMDB leadership was leaning too much toward the leftist position led them away from the influence of the conservatives of the CentrSo. Leftist politicians expressed their satisfaction saying that the approved text on social rights was coming along much better than they expected. In contrast, the leaders of the CentrSo did not hide their irritation. One of the leaders of the 188 Centrao, deputy Jose Lins said “the plenary session is totally overpowered by the
leftists”. He also commented that the campaign of the CUT was “extremely efficient” (CB
2 - 2 6 - 8 8 ) .
But the demands that were rarely practiced or the ones that had to do with
institutional change had not been approved. The amendment that called for the co
management of company shares was rejected (341 -107). Amendment by the PT deputy
Luiz Gushiken which gave the workers access to economic, financial, and administrative
information of the firm through union organization was also rejected. Even the PMDB
progressives thought that it would create tumult and noise within the companies (Globo
2 - 2 6 - 8 8 ) .
The amplification of workers’ rights preoccupied many employers. The president of
Firjan (Federation of the Industries of Rio de Janeiro) argued that “the paternalism of
the CA will impede the maintenance of the existing level of employment and the elevation of the wages.” Former Finance minister, Franco Dornelles (PFL) also criticized that the
CA approved the text without realizing the damage that would be inflicted on the economy
(CB 2-28-88). The president of the Gerdau group criticized the decision of the CA as
“demagogic and stupid” and said that industries would lose their competitiveness as exports diminished and unemployment increased. The following remarks by Gerdau represented the overall feelings of the employers.
“The country will be less efficient, less capable, less realistic in terms of the economy. The reduction of working hours from 48 to 44 might not be that serious. What is serious is to regulate these things through the constitution. A maternal leave of 120 days will lead to discrimination against women. The creation of 8 days of paternal leave is not necessary and demagogic and we know that it is ridiculous to have this in the constitution. It is the intervention of the constitution in the CLT, when the tendency should be less regulation in the CLT and freer negotiation. Brazil is already suffering excessive regulation and interventionism” (ESP 2-28-88). 189 According to the calculation of the FIESP, the extra burdens the employers had to pay
for the new workers’ rights were as follows: an annual vacation with a 1/3 increase in
the normal wage would cost an additional 2.6% in the wage burden: the reduction from
48 hours to 44 hours would add another 7%; 6 hour shift in uninterrupted rotation
another 33%. All these would add up to a 12% increase in price on average, according to
the FIESP (GM 3-1-88). Overall, employers were frustrated by the expansion of
direct benefits to workers while relieved about the elimination of the provision for job
security.
THE RIGHT TO STRIKE
The unlimited right to strike was approved by a vote of 436-38. It was unlimited in the sense that there was no restriction on the purpose (political, economic, solidarity) and in the sectors where strikes could occur. The agreement on the right to strike was made by the fusion of nine proposals and a dramatic last minute deal between the Centrao and the PMDB leadership. The text of the Centrao prohibited strikes without previous bargaining and limited the strike right in the “essential” sectors. The text of the
Systematization Committee prohibited the lock-out, but unions had to guarantee the maintenance of indispensable services to the community. The approved text said that
“the strike right is assured, enabling the workers to decide the opportunity and the interests that they would defend thereby” (article 10). Thus the political strike as well as the solidarity strike was allowed. Strikes in the “essential” activities were also allowed as long as the workers heeded the urgent need of the community.
The agreement was made at the final moment after a series of intense negotiations.
The leaders of the Centrao managed to suppress the resistance of the hardliners within the group who could not accept the strike right in the “essential” services. One of the 1 90 leaders of the Centrao, Jose Lourengo, who supported the agreement reminded the other
members of the uselessness of laws which already were surpassed by reality. He said
that “we should make law that is loved and not repudiated by the people.” The leader of
the PDS, deputy Amaral Neto followed the same line of reasoning when he allowed the
members of his party to vote as they want; “for me, I will prohibit striking in essential
services. But this is a utopia, because striking is prohibited today and is occurring all
the time” (CB 3-2-88).
Table 24: The views on the right to strike among the members of the CA (%)
PMDB PFL PDS PDT PTB PT others total Strike rights for all the 48 25 23 83 47 100 64 45 sectors Strike prohibited in 47 73 71 17 41 - 36 51 essential sectors
Other response 3 - 3 - 12 - - 2
Not decided 2 2 3 ---- 2 Total 100 100 100 100 100 100 100 100 No. of interviewees 267 120 34 24 17 16 28 506
Source: FSP 3-1-88: A-6
Table 25: Views on the right to strike among the population in the major cities (%)
SPRJ BH C PA S R F Bs Bm Strike permitted for all 65 60 66 63 67 61 68 64 68 58 the sectors Strike prohibited in 26 29 20 24 29 30 18 26 23 23 essential sectors Against all strikes 1 3 2 3 1 1 2 2 2 5 No. of interviewees 1048 717 431 426 431 432 432 432 433 409
Source: FSP, 3-1-88, A-6 N ote:l) SP: Sao Paulo, RJ: Rio de Janeiro, BJ: Belo Horizonte, C: Curitiba, PA: Porto Alegre, S: Salvador, R: Recife, F: Fortaleza, Bs: Brasilia, Bm: Belem 2) Total for the first row is 63%, for the second row 26%. 191 The survey of CA members interviewed one day before the agreement showed that the majority (51%) preferred to prohibit the strike in “essential” activities while
45% supported the unrestricted right to strike in all sectors (Table 24). However, among the population interviewed in major cities 63% supported the unlimited right to strike while only 26% wanted to prohibit strikes in the “essential” sectors (Table 25).
It is not clear how this survey affected decisions in the CA. However, the fact that the general public is much less inclined to regulate the right to strike could have influenced the decision of the Centrao leadership to go along with the progressive version of the approved text. The leaders of the Centrao were very well aware of the fact that the strike movement, which had expanded even under the harsh authoritarian regime, would not go way under the democratic regime. The mobilization of the workers not only had dismantled the effectiveness and legitimacy of the corporatist labor control mechanism but also shaped the content of labor reform in the new regime.
UNION STRUCTURE
In regard to the union structure, the single union principle was adopted over the union pluralism by a vote of 340-103. The fusion of the amendments that united the
PCB, PC do B, PDT, leadership of PMDB, and part of the CentrSo succeeded in maintaining current union structure - the single union system. The amendment for union pluralism that had the support of the PT and liberal wing of the CentrSo (mostly
PFL and PL) were defeated by a vote of 305-148. This was one of the peculiar patterns of political alliance in the CA. The shape of the alliance in each vote was different depending upon individual issues according to the individual political interests of the various groups. 1 92 The pro-labor camp was divided on the union structure. The PT argued that single
union principle was a strait jacket imposed on the workers. Communists argued that
union pluralism ran the risk of atomizing the unions. Leaders of the “unionism of result” also supported the single union principle. Magri argued that “we have to take into consideration 50 years of culture, the period in which the single union principle has prevailed, which had fortified the union movement” (Globo 3-2-88). Progressives within the PMDB were also supporting the single union principle. The deputy Mario
Lima of the PMDB, a former president of the Petroleum Union of Bahia, argued that union pluralism would lead to the formation of unions at the firm level, thus weakening the unified pressure of the workers. Senator Jose Fogaga also argued that “pluralism will weaken the representation of the workers” (ESP 3-2-88) The PMDB leadership went along the moderate groups within the labor movement, responding favorably to the lobbying of the CNTI (CB 3-2-88).
The criterion of moral and theoretical judgment was not clear. There was no overriding universal appeal in the choice over union structure. Those who supported the official union structure were afraid of the division and the atomization of the labor movement which was quite persuasive considering the weakness of the Brazilian labor movement in the work places. This position was fortified by the attempt by the CentrSo to maintain the single union system in the employers’ unions while pluralizing the labor unions. Deputy Mario Lima of PMDB commented that “the single union principle is so good that the employers want it while defending pluralism for the workers” (FSP 3-1 -
88). At the same time, the single union system was one of the characteristics of corporatism which induced the unrepresentativeness of union leaders. Moreover, without the direct control of the unions by the state, the single union system was perceived more favorably by the general public (Table 27). The lack of universal appeal of the issue can be found in the lack of firm conviction on the part of the members 193 of the CA. Just about a week before the voting on the union structure, there was more
support for the union pluralism. On the day of the vote, union pluralism was defeated by
a margin of more than 150 votes. Many members of the CA had changed their position
according to their leadership orientation without difficulties.
The CA also approved the maintenance of the union tax and created a new contribution
that was designed to cover the cost of maintaining the confederative system. This
“confederative contribution” was to be decided by the general assembly of the unions and
to be deducted from the payroll. The union tax was in a sense duplicated by specifying the
exclusive use of the contribution that would be sent to the official union entities of the
higher level. The communists and the moderate groups of unionists of both the workers
and the employers actually fortified the corporatist structure by including the
“confederative contribution” through the influence of lobbies.
Table 26: Views on union organization among the members of CA (% of support)
PMDB PFL PDS PDT PTB PT others total Single union 48 29 35 75 29 31 64 44 Union pluralism 44 64 62 25 59 69 25 49 No. of interviewees 267 120 34 24 17 16 28 506
Source: FSP 2-26-88:A-7
Table 27: Views on union organization among the population in the major cities (% of support)
SP RJ BH C PA S R F Bs Bm Single union 60 68 54 58 58 54 54 66 53 45 Union pluralism 34 25 32 34 42 44 38 26 38 43 No. of interviewees 1048 717 431 426 431 432 432 432 433 409
Source: FSP 2-26-88:A-7 Note: SP: Sao Paulo, RJ: Rio de Janeiro, BJ: Belo Horizonte, C: Curitiba, PA: Porto Alegre, S: Salvador, R: Recife, F: Fortaleza, Bs: Brasilia, Bm: Belem The plenary session also approved the election of employees representatives in the
companies of more than 200 employees “with the exclusive purpose of promoting an
understanding between employers and employees.” The amendment got the support of all
the parties (397-9). This was the result of the alliance between the CentrSo and the
PT. However, the factory committee proposed by the PT deputy JoSo Paulo was rejected
by a vote of 278-147. Again the pro-labor force was divided. For example, Jose Fogaga,
the progressive of the PMDB, opposed it because in his opinion it presented the danger of
dividing and weakening the union movement (CB 2-26-88). Moderate union groups
opposed the factory committees because they thought they would weaken the union power
in the work place. Their position was supported by the PMDB, conservatives, and
communists. The position of the radical CUT, which was in favor of work place
organizations, was supported by the PT and liberal wing of the PFL and the PL.
VOTING BEHAVIOR OF THE PARTIES
The DIAP’s survey of voting behavior on the ten most important labor rights9 in the first round of voting in the plenary session shows that support for labor rights was distributed along the ideological spectrum of the parties. The five leftist parties (PT,
PCB, PC do B, PDT, PSB) voted almost always for workers’ rights. The three rightists parties (PFL, PDS, PL) refused to support workers’ rights six to seven times out of ten.
The PTB and PDC showed more support for workers’ rights more than the DIAP had expected (DIAP, Boletim do Constituinte, No15, 1988:34).
9 These include: job security, 40 hour work week, six hour shift for the uninterrupted work, minimum wage, period of labor claim, holidays, wage floor, previous notice of 30 days for dismissal, right to strike, and factory committee. DIAP, Boletim da Constituinte. No. 15, March-April 1988:2 195 The PDS led actions against the interests of the workers with 66.9%. The PL, the
party of liberal discourse and conservative practice followed with 61.82%. The PFL
followed with 60.65%. Leftist parties demonstrated strong party discipline. The PT,
PSB, PC do B, PCB voted for the workers’ rights 100% of the time. The PDT followed
with 96.97%. The PTB showed a surprisingly high rate of 78.77% which was thought to
be the result of union pressure (DIAP, Boletim da Constituinte, No 15, March-April
1988:34). The PMDB had 69.71% of pro-labor voting record. The PDC which had links with the UDR (Rural Producers’ Democratic Union: conservative landlord organization) showed higher percentage than was expected with 57.69%.
Table 28: Voting behavior on the workers’ rights in the first round of voting in the plenary session
Parties No. of Actions for the interests of Absence (%) Weighted members the workers (%) score ** against for PMDB 300 30.29 69.71 14.60 5.72 PFL 134 60.65 39.35 22.24 2.76 PDS 36 66.90 33.10 20.28 2.25 PDT 24 3.03 96.97 3.75 9.42 PTB 21 21.23 78.77 14.76 6.69 PT 16 0 100 0 10 PSB 4 0 100 0 10 PC do B 5 0 100 0 10 PCB 3 0 100 0 10 PDC 6 42.31 57.69 13.33 4.75 PTR 1 50 50 80 0.5 PL 7 61.82 38.18 21.43 2.86 PMB 1 55.56 44.44 10 3.5 w/o party ■v 1 0 100 0 10
Source: DIAP, Boletim da Constituinte. No.15, March-April 1988:35 Note: * Senator Itamar Franco (MG) ** The weighted average score is constituted by job security (yes 1.5, abstention 0.5, no or absence 0), 40 hours / 6 hour shift(yes 1.5, abstention, absence, no 0) minimum wage/ prescription/ vacation/ wage floor (yes 1, abstention, absence, no 0), strike right, previous notice of minimum 30 days/ factory committee (yes 1, abstention, absence, no 0) 1 96 In regard to the rate of absence , the PFL showed the highest rate at 22.24%. The PL
and the PDS followed with 21.43% and 20.28%. Many of members of these parties were
responsible for business-commercial-financial activities in their home states and could
not sustain a constant presence in Brasilia. These conservative parties were also
responsible for the delay of progress in the CA through the denial of quorum. The denial
of quorum was partly a strategy to draw more concessions from the progressives, and
partly a strategy the Planalto to delay the work of the CA. On the contrary, four leftist
parties showed 100% participation in the votes, followed by the PDT with a 96% rate
of attendance.
LABOR ISSUES IN THE SECOND ROUND
At the beginning of the second round of voting on workers’ rights in early August
1988, the unionists were ready to fight to maintain their achievements in the first
round of voting five months earlier. Unionists of all entities decided to maintain
permanent observers in Brasilia to watch the daily proceedings in the CA for the second
round of voting. The necessary instruction to pressure the members of the CA in each
state were distributed through the PT newspaper. Its recommendation included: to call
the members of the CA , to put up placards showing the votes of CA members in their
district, to organize the group to lobby in Brasilia on the day of voting, posting ribbons
and posters, and demonstrations in the street (JT 8-1-88).
On the employers’ side, or Centrao, there was not much of a strategy to mobilize its
members. Many members of the Centrao stayed in their home states to take care of their
business and electoral base, rather than staying in Brasilia to deliberate on the constitution. What the Centrao tried to do at most was to check the attendance of their members in the CA so that the attendance record could be used to inform the employers’ 197 organization in their home states to pressure the members of the CentrSo in their states to participate in voting (JT 8-1-88).
In the second round of voting, the president of the CA, deputy Ulysses GuimarSes accelerated the process of voting because of the Sarney’s attack on the first draft of the constitution.1 0 The voting, which began at the end of July ended in about a month. The speedy progress was facilitated by the rule that modifications were limited to the elimination of phrases in the text and the addition of phrases required the agreement of all the parties.
The hottest issue in the second round of voting was that of the “maximum 6 hour” shift in the industries that operated without interruption. Both the workers and the employers were active in lobbying. About 100 unionists from the Petroleum Workers’
Union of Rio de Janeiro, Metal Workers’ Union of Rio Grande do Sul, and Paper Workers’ union of S3o Paulo went to Brasilia to lobby on this issue. Unionist Medeiros and the business leader Jorge Gerdau were busy making contact with the new PMDB leader in the
CA1 1, Nelson Jobim, and other party leaders. Gerdau emphasized the loss of competitiveness in the economy while Medeiros was focusing on accidents of workers during work due to accumulated fatigue. Both arguments had their own appeal. According to deputy Antonio Britto, members of the CA did not want to be seen as against the workers nor want to disturb the employers. While Medeiros was lobbying inside the
Congress about 400 unionists demonstrated outside the Congress with shouts, flags, and ribbons in favor of maintaining the 6 hour shift (CB 8-4-88). Employers’ lobbying was not very successful. First they backed down on the 40 work hour week instead of
10 In a nation-wide radio and television address, Sarney claimed that the first draft was unworkable and would make the country “ungovernable.” The attack backfired. The members of the CA overwhelmingly decided to retain the first draft by a vote of 403-13. LAWR. Aua.l 1 1988, no.31:10
11 Mario Covas and other progressives in the PMDB created PSDB in June 1988. 198 insisting on 6 hour shift. But eventually the amendment of PT deputy Jo3o Paulo that withdrew the “maximum” was approved allowing workers and employers to bargain12.
It was almost a unanimous vote (443-2). On the other hand the amendment of the
Centrao which simply eliminated the 6 hour shift were defeated by a vote of 49-330.
The lack of cohesion of the Centrao in this issue was remarkable. Employers expressed their disappointment while unionists celebrated their victory.
Most of the text on the labor rights remained the same. Agreements were made to maintain 50% more pay for overtime hours and the proportional previous notice before the dismissal (proportional to duration of the employment). The paternal leave was maintained but its period was diminished from 8 to 5 days until the ordinary law would be established.
On the strike right, the goal of the CentrSo was to eliminate the expression of article
9 which said “It is up to the workers to decide on the opportunities and interests which they defend”. At least they wanted to change the “interests” to “their collective interests” thus limiting the nature of interests to declare the strike. The goal of the
CentrSo was to eliminate the possibility of a political strike. Due to the internal rule any modification (addition) had to be made with the approval of all the parties and the PT had to agree to this for the change in the text on the strike to happen. But the PT opposed this for weakening the strike movement and impeding the workers from exercising solidarity strikes. There was pressure for concessions by the PT even by the other leftist parties. But the PT refused to make any concessions and eventually the plenary session approved the same text as in the first round. The attempt to limit the strike law was defeated by a 287-112 vote. The fear of bad publicity in the upcoming municipal
12 This withdrawal of the word “maximum” was already proposed by Jo3o Paulo himself in the first round of voting. The word was retained in the first round of voting because the modification of the phrases had to wait for the second round of voting. Thus practically employers did not achieve any new concession in the second round of voting. 199 election made many members of the CentrSo support the unlimited strike right. One of
the leaders of the CentrSo, Luis Ponte complained that “everyone votes for fear of the
ballot box on November 15th” (CB 8-17-88).
The military and Sarney expressed their complaints about the approval of unlimited
strike rights. But due to negative public opinion on his previous attack on the CA in late
July, Sarney was advised to be silent and did not make any official criticisms. Employers
were more ready to accept the result while criticizing it. Mario Amato, the president of
the FIESP, said new strike law was a “fait accompli” that was not worthy of laments. But
he made the criticism that the decision was motivated by the November Municipal
election. On the workers’ side the victory was conceived as the result of a defiant
struggle against the authoritarian law.
“We have made strikes for 10 years without adventurism and with responsibility. The constitution only recognized what was already occurring in practice for long time. The struggle makes the law as always” ( Joao Avamileno, the president of the Metal Union of Santo Andr6, JBs 8-18-88).
Another attempt to limit the right to strike was to withdraw the job security of union
representatives and substitutes, limiting job security only to union officers. The
amendment of the CentrSo was defeated by a 302-105 vote.
The freedom to form unions was guaranteed. The permission of the Ministry of Labor
was not necessary, enabling workers to organize unions and register them in the civil
register office (Cartdrio). On the issue of union structure, the intervention of the
government in union matters was prohibited. The single union principle was maintained
together with the union tax and the new confederative contribution.
In the second round of voting, it was difficult to change the text. Rules made the modification of the text difficult. Moreover, the CA had the burden of finishing the new constitution before the November municipal election. The controversial details were in 200 many cases handed over to the ordinary law. That way the work speed was accelerated and
the members of the CA could avoid a negative image in the Municipal election in
November. Internal rules and the existence of the municipal election worked unfavorably
for the Centrao. The Centrao complained at this final stage that polemical issues were
arranged by the PMDB and the leftist parties, without the effective participation of the
conservatives. In sum, the Centrao failed to use the second round of voting as an
opportunity to bring about the changes it wanted.
EXPLAINING THE SUCCESS AND FAILURE OF THE LABOR REFORM IN THE CA
BENEFITS FOR WORKERS
Labor reform was successful in legally formalizing many rights which were already
obtained in practice through the mobilization of the workers and the emergence of “new
unionism". Existing practice, legal or illegal, became the bottom line of the negotiation.
Among the three most important issues in this dimension (job security, 40 working
hour, six-hour shift) the overall score was a draw. Job security was defeated by the
alliance of the Centrao and the progressive leadership of the PMDB. 40 hour work week
was defeated but Centrao amendment (48 hour) was also defeated. 44 hour work week
was a compromise. Six hour shift was also a result of compromise that withdrew the
word “maximum" so that workers and employers could accommodate their specific
situation of the firms through collective bargaining.
The text on job security was defeated for three major reasons. First, the employers
were united in launching intense protests and lobbies. Second, the risk of alienating the
structural power of business and the impact of this on the democratic process was ominous. The Planalto and the military were very displeased with the work of the 201 Systematization Committee and tried to deter progress in the CA. Combined with the
bitter frustration of the employers, it could have generated the fortification of the anti
democratic forces, including the possibility of military intervention. Third, the alliance
between the progressives of the PMDB and the leftists was not sustained for fear of the
former that this might lead to an institutional impasse. Finally, while most of the labor
leaders were vigorously demanding job security, the leaders of the “Unionism of
Result”, who supported modern mature capitalism with the strong influence of the AFL-
CIO, were against job security for discouraging the investment of capitalists. Before the
PMDB leadership agreed to the amendment of the Centrao, it consulted Medeiros, one of
the leaders of “Unionism of Result”, and was encouraged by his support.
Employers expressed their concern and worry for the added cost associated with
more liberal labor rights. But their reaction reflected through the Centrao was not as
tenacious as with the job security issue. Why was the job security issue a source of
tension that eventually upset the decision of the Systematization Committee while the
other benefits issues were not? The fundamental reason was that the job security was
not simply a matter of extra cost for the employers. Job security, or negation of employers’ freedom to hire and dismiss workers as they see fit, was considered a fundamental threat to the free initiative of business in the capitalist society. It was considered to touch the basic power relations between capital and labor. Jos6 Zamprogna, the president of the Association of the Steel Industries of Rio Grande do Sul warned that “ after job security, the next step will be socialism” (Dreifuss 1989:187). The amendment of the CentrSo, progressive indemnification, transformed the institutional restriction on the employers’ power to dismiss the workers into an additional (30% more of FGTS), but not that heavy, financial burden to employers.
In regard to the 44 hour work week and the six hour shift, the leadership of the
PMDB played a key role. PMDB leadership was in agreement with the CentrSo to support 202 the 44 hour work week but was against the Centrao on the matter of the six hour shift.
44 hour work week was a compromise between the 40 hour amendment by the left and the 48 hour amendment by the Centrao. It reflected widespread practices. Payne
(1992: 10) reports that 74% of the business elites she interviewed already agreed on the 44 hour work week in the collective bargaining before its approval in the CA. On the 6 hour shift, the fact that some sectors in this type of industry were already practicing a 6 hour shift, together with the emotional appeal of the health and family life of the workers who work odd hours, was crucial in defeating the CentrSo’s attempt to eliminate the 6 hour shift (DANC February 1988:7621-7624). In all cases, the result of the vote was determined by the orientation of the PMDB leadership.
Issues related to the worker benefits were also strongly influenced by the consideration of the next election. About 120 members were about to compete in
November 1988 municipal election. The negative campaign of the CUT, the poster listing the “traitors of the people” was quite effective in making the less committed members of the CentrSo desert the group. The reason why this method was effective was that it was directly related to the well-being of individual workers, and thus, brought strong political pressure against members of the CA. The issue of strikes or the union structure was more related with the union leaders and the political and social power of the labor organizations, which implied that practices in the work places and lobbies were more effective methods of pressure.
THE RIGHT TO STRIKE
While the right TO strike in “essential" activities was contested by the Centrao during the negotiating process, the Centrao eventually agreed to a progressive provision on the right to strike. Even the political strike was allowed and the sectors formerly 203 prohibited from striking (such as public employees and many “essential” sectors) were
allowed to strike. The text on the strike right was passed with an absolute majority in
the first round of voting. The Centrao tried to limit the purpose of the strike in the
second round of voting, which was defeated by a margin of more than 170 votes. The
reason why the Centrao agreed to the text of the Systematization Committee was that they
were well aware of the fact that a law that did not reflect the reality of the labor
movement would not be respected. Even with the harsh authoritarian laws during the
authoritarian regime, the government could not control the strike movement. The strike
movement would not go away unless political and economic reasons for it disappeared.
Thus, the ineffectiveness of the legal control mechanism, the emerging new reality based
on the mobilization of the workers became the major parameters of the labor reform.
The unlimited right to strike became a source of discontent among the government
and the military while it was getting support among the general public. It began to
establish its status as one of the fundamental rights of the workers. Especially in the
early years (1985-86) of the New Republic, president Sarney, the military, and
employers, the conservative core of the Brazilian society, revealed relatively tolerant
attitudes to the increasingly powerful strike movement, while resorting to a double
strategy of appeasement (talk of a social pact) and the threat of repression.
What explains this legitimacy of the strike movement in a society where the strike
was considered an anti-social criminal act for such a long time? First, historically the
strike movement was thought of as a part of the struggle against the authoritarian
regime. Striking was thought of as the minimum the workers could do to protect the
workers right to survive in the circumstances where workers had been suffering a
decrease in real income due to the wage squeeze policy of the government, as well as the
recession and inflation. There was no other way to effectively express and demonstrate workers’ demands other than the strikes under the authoritarian regime. The social 204 resistance against strike had decreased in those circumstances. Strikes were also one
way of undermining the authoritarian regime. The radical labor movement which led the
strike was allied with the other social movements, especially the neighborhood
movement and the community movement of the Catholic church. The morality of the
strike movement was established by its anti-authoritarian, pro-lower class, pro-
nationalistic orientation.
Second, many middle class sectors were also involved in the strike movement from the early days of the strike movement. The medical doctors, school teachers and university professors, and government employees saw striking as the only weapon they could use, despite the fact that striking was illegal for them. The fact that broader segments of the society had been forced to resort to strikes to realize their demands greatly contributed to the legitimacy of the strike weapon.
Third, the spirit of democracy, that is, the toleration of the conflicts, and the perception that new democracy would experience a period of adjustment in terms of dealing with pent-up grievances also served to create an environment that strikes were the legitimate weapon of the workers in the new regime. Pazzianotto’s commitment to non-intervention in the striking unions and his conviction that strike action was a legitimate right of workers helped to establish the legitimacy of the strike movement as an exercise of citizen rights. What the CA did was to recognize this reality in the constitution.
UNION STRUCTURE
In the CA the corporatist union structure was maintained and even fortified by the addition of the confederative contribution which would be used exclusively to maintain the official structure. The main reason is that PMDB progressives were against the idea of union pluralism. They were close to the m oderate union groups. Radical unions were 205 grouped under the CUT which was linked with the PT. Almost 90% of the delegates in the
Third Congress of the CUT in 1988 supported the PT. From the viewpoint of the PMDB which did not have much penetration into the union movement, most unions were not
linked with the CUT and they did not have to risk the opposition of that majority of unions.
If anything, the PMDB leadership was closer to the CGT which supported the single union principle. The president of the CGT, Joaquimzao was the substitute of Mario Covas in the Congress. Ulysses, the president of the PMDB and the CA, invited five unionists to listen to the opinions of the union leaders on the new constitution just before the second round of voting. All these five unionists were linked to the CGT who had advocated the single union principle (JB 8-3-88). The PMDB progressives were sympathetic to the social equity issue and the suffering of the workers but they were not in favor of the radical labor movement led by the CUT and its strategy of organizational expansion.
The influential figures of the PMDB progressives were more accepting of the idea that the single union principle preserved union unity against the atomization attempt of the employers. Senator F. H. Cardoso presented the labor reform bill that maintained the single union principle in 1985. The suspicion about the impact of union pluralism was strengthen by the Centrao’s attempt to pluralize the workers unions while maintaining the single union principle among the employers unions. Deputy Cabral, the rapporteur of the Systematization Committee and one of the progressives of the PMDB, said, “a union is not a recreation club or a football club. It is an instrument of economic pressure against the government. In the pluralist system it is not clear who will have the representative power and there will be chaos” (CB 3-2-88).
Moreover, part of the Centrao was in favor of maintaining the corporatist structure.
Senator Albano Franco of the PMDB, the president of the CNI, was especially active in preserving the corporatist structure. Employers were also struggling to maintain the 206 political power of exclusive representation among themselves. To change the union
structure meant the shake-up of the power structure of the employers’ unions which
allowed the presidency of the CNI to be in the hand of Albano Franco who came from the
small Northeast state of Sergipe (Dreifuss 1989:186). On the side of those who
supported union pluralism were the CUT and the liberal wing of the Centrao, especially
the deputy Afif Domingo of the PL who introduced the analogy of political competition
among the unions. Despite the division in the Centrao, those who wanted to change the
union structure were outnumbered by those who wanted to keep the old system.
The issue of the union tax was always the twin issue connected with that of union
structure. Those who supported the single union system were in favor of the maintenance
of the union tax. However, union leaders who supported the union tax had the burden to
advocate it against the criticism that they were not the real representative of the
workers. The representative leaders will not depend on state-guaranteed financial
security, but on the spontaneous support of the workers. Moreover, given the
Pazzianotto’s attempts to extinguish union tax with the ratification of ILO Convention
87, it was not unreasonable to expect another attempt of the government to abolish it.
So the advocates of the union tax conceived and managed to insert new contribution to exclusively cover the cost of the confederative system.
The survival of the corporatist shell suggests that the cultural legacy or the power structure the corporatist system had created is stubborn. This was fundamentally a result of the limit of the new unionism. The “new unionism” was born out of the official union structure, while struggling against the inactivism of the official structure. The power of the “new unionism” was facilitated by the fact that it was part of the legitimate system under authoritarianism. While factory committee played an important role in mobilizing workers, due to the risk of building a completely parallel union organization, the leaders of the “new unionism” opted for a strategy of colonizing official unions 207 through union elections (Boito 1991). Thus the establishment of factory committees, while reflecting a new trend of the Brazilian labor movement, was relatively limited among the work places where rank and file activism was strong.
In sum, the cleavage line on the union structure was drawn between those who took advantage of the old system and those who wanted to change the existing system. It cut across the usual lines of capital and labor. The cultural legacy and vested interest in the corporatist structure of the interest representation was deep and tenacious. The force of change was simply outnumbered by those who preferred the old system, which reflects the limits of the "new unionism” and of the political power of the radical labor movement, on the one hand, and the sway of deep-rooted patrimonial practices of the employers, on the other hand.
CONCLUSION
The possibility of reform was open by the fact that conservatives did not constitute a majority force in the CA. The alliance between the leftists and the progressives was the fundamental cause of the advancement of labor rights in the CA. The “political opportunity” was there to make it possible for the leftist to enlist the support of the progressives and centrists of the CA. This was partly a result of the Brazilian transition type. While the overall power structure of the CA was considered conservative to moderate, the substantial presence of left and center-left was possible due to the development of both the social movement and the reformist opposition elite during the authoritarian regime. The Brazilian type of transition that allowed the functioning of the
Congress and regular elections, however manipulated, did not prevent the emergence of leftist and progressive political forces. While the authoritarian elite managed to control 208 the challenges of defiant political forces, it could not control the advancement of the
labor movement and the politicization of the working class.13
How did the alliance of the left and center-left th at constituted barely a third of the
members of the CA succeed in drawing a successful result for the working class? The
strategy was to concentrate the pro-labor force in the Subcommittee of the Workers’
Rights. This made it possible for the progressives to set the tone of the debate and to
direct the course of the labor reform. The unionists and progressive forces colonized the
Subcommittee and accepted almost all of the common demands of the labor movement
including job security and 40 hour work week. In the Committee of Social Order
progressive forces were no longer the majority but managed to maintain most of the text
of the Subcommittee. The strategy here was to maintain the overall text in exchange for
minor concessions. The fact that rapporteurs of both the Subcommittee of the Workers’
Rights and Committee of Social Order belonged to the progressive force was an important
factor, because the rapporteur is the one who proposes the text on which congressional
debate is made. The rapporteur of the Subcommittee of the Workers’ Rights was the
former unionist. That of the Committee of Social Order was one of the trusted
progressives of the PMDB.
In the Systematization Committee the progressives were overrepresented. This
caused the mobilization of the conservatives in the largest bloc called CentrSo for the
revision of the internal rules. However, the core of the conservative CentrSo did not
occupy the majority. They comprised a little bit over 40% of the CA members.
Moreover, some of them did not always stay in Brasilia always. Many of them were busy
13 Increasing influence of the PT is a good case in point. The PT members in the Congress increased from 8 in 1982 election to 16 in 1986 election. “Lula”, the leader of the 1978 mobilization and the president of the PT, ran for the presidential election in 1989 and came out as a figure powerful enough to represent all the progressive forces in Brazil. He was defeated by a narrow margin (35 vs. 31 million) even under the heavy manipulation of the mass media by the conservatives. 209 taking care of business and local politics in their home states. The progressives, who were in most cases professionals (journalist, doctors, lawyers, etc.) stayed most of the time in the capital to participate in the voting. Neither conservatives nor progressives had the majority and the voting results depended on the public pressure, lobbies, emotional appeals, and the responses from the electorate. This worked mostly in favor of the progressives who had the advantage of public opinion. The upcoming municipal election scheduled right after the promulgation of the new constitution increased the political pressure of the public opinion..
Another fundamental source of labor success in the CA was the mobilization of the public pressure of the working class organization and the effective lobbying of the DIAP and union entities. The effectiveness of the CUT’S public pressure (using the posters with names and photos of the “traitors of the people”) in making some members of the
Centrao desert the group was acknowledged by the leaders of the group. The lobbying by the workers’ organizations was much more effective and better organized than that of the employers (interview with Ronan Tito 12-16-93).
From the beginning of the CA, labor was keenly tuned to the composition of political forces within the CA and knew that the progressive forces were in minority position.
Three peak organizations and nine national confederations got together and discussed the strategy in January 1987. The DIAP14 played the role of coordinator in this meeting and
14 The DIAP (Interunicn Department of the Parliamentary Advice) was founded in December 1983 as an instrument of the working class to institutionalize the consensual demands of the working class. At the end of 1986 215 union entities including peak organizations, confederations, federations, unions and associations all over Brazil were affiliated with the DIAP. In 1988 its membership increased to 431 union entities. The DIAP publishes the Boletim Informativo, Jornal do DIAP, Boletim do DIAP, Quern E Quern and annual report. These publications have provided explanation and criticism of the amendments on labor issues, means of communication with congressmen (telephones and addresses in Brasilia), and identification of those who opposed labor demands. It provided basic information on what was going on in the Congress and the government and how and who should the unionists contact and pressure for the approval of labor demands. During the CA, it published the Boletim da Constituinte andQuern Foi Quern na Constituinte. Especially the latter was providing information on the voting record on major labor demands, brief information of the congressmen including their district, political party, 210 produced a “work plan” in the CA (ESP 1-31-87). Their plan included the offering of
technical and legal information, draft bills, opinions and consultation. The DIAP
formulated and implemented the plan which included the preparation of the draft and
opinions, lobbying to persuade members of the CA, and informing the workers about the
voting record of the members of the CA (DIAP, Relat6rio 1986-87, FSP 2-8-87).
The biggest contribution of the DIAP was that it was able to provide common ground
to fight for workers rights. Three peak labor organizations, including the radical CUT,
nine national confederations, and the two other major union entities endorsed the DIAP as
representing the interests of the labor movement in the CA. The DIAP promoted the
various meetings with members of the CA, the unionists, and its own technical staffs.
The proposal of the DIAP was later turned into the Popular Amendment which obtained
almost one million signatures (DIAP 1988:23). The DIAP also effectively employed the pro-labor score which was published with the promulgation of the new constitution and timed just before the November municipal election. This strategy of grading the members of the CA was quite effective according to DIAP’s own estimation in maintaining the conquests achieved in the first round of voting (DIAP Relatdrio 1988-89).
It is hard to estimate the role of the DIAP in each voting. But it is clear that the meetings of the DIAP and the progressive members of the CA which were continued throughout the CA played a crucial role. The DIAP had enjoyed the recognition and support of the progressive members of the CA. The parties of the left and the center (five leftist parties and the progressive wing of the PMDB, PSDB, and PTB ) formally appointed the representatives of their parties to the meetings of the DIAP. The DIAP also got the support of the leaders of the PMDB in the CA, Mario Covas until the middle of
and political orientation. It gave each congressmen a pro-labor score according to the important issues of labor legislation during the CA. The DIAP had a committed staff and support groups. About 50 labor lawyers who were working in the labor unions voluntarily served as lobbyists in the CA . 21 1 1988 and Nelson Jobim who became the successor of Mario Covas after Covas left the
PMDB to create the PSDB. The rapporteur of the Systematization committee Bernardo
Cabral was favourable to giving the DIAP ample opportunities for the reexamination of
views and new suggestions.
In addition to the effective lobbying of labor, labor unity on most of the issues,
including many worker benefits and the right to strike, contributed to the passage of the
pro-labor text. Labor leaders, including Meneguelli of the CUT, Joaquimzao of the CGT,
and many presidents of the national confederations stayed the whole time in Brasilia
during the deliberation on workers’ rights in the Systemization Committee (DIAP
Relat6rio 1986-87). Two major exceptions to labor unity were the opposition of the
leaders of the “Unionism of the Result” on the issue of job security and the division
between the CUT and the moderate union groups on the union structure. As a rule, the
reforms which were directly related to divisions of and within the labor movement did
not succeed. Union pluralism, extinction of the union tax, and factory com m ittee failed
due to the opposition by the CGT, USI, and the federations and confederations. These
moderate union groups were supported by the progressives of the PMDB and most of the
centrists and the conservatives.
The employers’ lobby was less organized and prepared (Amadeo 1991). Employers
were not ready for labor issues in the CA. Their focus was more on the Committee of
Economic Orders (privatization, diminished role of the state in the economy, opening of
the market, etc.) and the key issue area was divided according to the industry. Job
security was an exception. It was not simply a matter of increase of remuneration for
the workers. It touched the basic power structure in capital-labor relations in
Brazilian society. The increase in the financial burden due to the approved text on labor issues provoked mostly verbal protests. In case of job security, however, many 212 employers’ organizations mobilized large scale rallies in protest of the approval of job
security in the Systematization Committee.
Finally, many of the issues that were successful in the reform had been already
practiced in many of the modern and advanced sectors through collective bargaining. The
systematic survey on how widely these approved rights had been actually practiced does
not seem to exist. But many newspaper accounts suggested that many of these approved
rights were already in force. For example, a 50% higher wage for overtime hours,
reduced working hours (mostly 44 hours per week), and proportional (to the period of
employment) previous notice before the dismissal were reported in the press(FSP 2-
26-88, JT 8-5-88). The 44 hour work week was also widely practiced before the
decision of the CA. The right to strike is the best example. Despite the stubborn
opposition of the hardliners of the CentrSo, the Centrao leadership persuaded them to
support the approval of the unlimited strike based on the fact that the more harsh
authoritarian law had not been observed at all. Whether the worker’s right in question
had been widely practiced became a parameter that determined the scope of reform.
Those which had not been practiced widely and which touched the power relations within the firm were not approved. Those amendments that calls for the co-management of the shares of the firm and the establishment of the factory committee was rejected. Together with the disunity of labor on the union structure and job security, the lack of practice in the working places was one of the major sources of the limits in the labor reform. CHAPTER VI
STRIKE LAW OF 1 9 8 9
The unlimited right to strike achieved in the CA came to be regulated through the complementary law in the middle of 1989. The initiative to control the increasing labor conflicts was made by the government under the strong pressure of the military to adopt tough measures. The resulting emergency MP (Medida Provisoria: Provisionary
Measure) 50 contained several authoritarian and unconstitutional elements. The labor movement united in opposing and challenging MP 50. The Congress agreed that MP 50 was too harsh and had unconstitutional elements. The substitute bill of the Congress was much more liberal than the MP 50, but was not as liberal as the leftists wanted.
Despite the opposition of the leftist parties, the agreement between the conservative and centrist parties transformed the substitute bill of senator Ronan Tito into the new strike law.
INTENSE MOBILIZATION OF THE WORKING CLASS IN EARLY 1 989
The government announced the Summer Plan in January 1989. The plan included the de-indexation of the URP (Price Reference Unit), an index that had automatically adjusted the wage each month. The price was not frozen and the workers and employers were allowed to negotiate wage levels. But the transfer of the wage increase to price
213 214 increases was not permitted. In general employers refused to increase wages without having permission to pass them on to prices (LAWR 2-2-89). As a result, the elimination of the automatic monthly adjustment of wages was a serious threat to the workers. The wage policy was not a part of the Summer Plan and was postponed to be included in a later wage law. The unions reacted immediately with the threat of a general strike. Both the CUT and the CGT were united in sponsoring the general strike on March
1 4-1 5.
The military was ready for intervention in case there were requests for intervention from the state government. According to its national security doctrine, the maintenance of “internal order” was a priority for the military. Though there was no request of intervention, military troops were deployed in the streets of major cities. 84,000 troops, including police, were deployed in S3o Paulo. In Belo Horizonte and other major cities of Minas Gerais about 14,000 army troops were stationed. About 16,000 soldiers were on the streets of Recife (JB 3-14-89).
Despite the display of force by the military, the March general strike was a success in the Brazilian context, especially in big cities of the major states . The support of leftist mayors in big cities1, such as in S3o Paulo, Porto Alegre and Vitoria, and the adhesion of the mass transportation sector to the general strike was crucial to the success of the strike in the big cities. The mayor of the city of S3o Paulo, Erundina, stopped the operation of 3,200 buses run by the city. The mayors of Porto Alegre and
Vitoria joined the street demonstration of the workers. Six big cities (S3o Paulo, Rio de
Janeiro, Porto Alegre, Curitiba, Salvador, and Recife) were in a “holiday mood.” The
1 In the municipal election of November 1988, the PT won in the cities of S3o Paulo, Porto Alegre, Campinas, Santos, Vitoria. In all, PT won 37 cities. The PDT won in Rio de Janeiro. These cities account for about 40% of the GNP (Veja 11-23-88). The fact that three workers were killed just six days before the election day by the Army troops at National Iron and Steel Company in Volta Redonda, Rio de Janeiro, had a negative effect on the conservative force in the election. 215 CUT and the CGT claimed that 35 million workers joined the general strike, which is
70% of the 50 million economically active population (LAWR 3-30-89). The government estimate of participation of workers was much lower. Precise evaluation is difficult. However, it was obvious that it was much more successful than the December strike of 1986.
From April a strike wave swept the country. The banking sectors, including the
Central Bank, Banco do Brasil, and Caixa Economica Federal, went into strike. In the
Central Bank, 90% of employees were on strike. In Rio de Janeiro out of 850 workers of Central Bank only 8 worked. In Brasilia where the headquarters of the Central Bank is located, only 180 employees showed up to work out of 2,600 employees (CB 4-26-
89). Money circulation in the banks and the private sector became scarce. The national financial market and the conduct of international trade were at risk of paralyzation.
About 200,000 metal workers in the ABC area, Campinas, SSo Jose dos Campos, dockers in Rio de Janeiro, and teachers in S3o Paulo also went on strike. Most of them were reported to be linked to the CUT (JBs 4-20-89). The CUT helped to organize even the strikes of the policemen who committed human right abuses under the authoritarian regime. Moreover, April was the month in which the greatest number of strikes occurred during 1989. The number of strikes in the first half of 1989 is seen in Table
29.
Table 29: The number of strikes during the first six months of 1989
January February March April May June 169 2 1 8 4 3 9 4 7 9 36 7 3 4 0
Source: ESP 7-28-89 216 The increasing frequency of strikes, especially in the sectors which were formerly
considered "essential” and linked to national security (banks, public administration)
led to the perception on the part of the government, especially president Sarney and the
military ministers, that something had to be done. One presidential aid said “Never was
president Sarney so irritated and preoccupied about how to limit the strikes” (CB 4-
27-89). The preoccupation of the government became even greater as 15% of the labor
force had their collective contract renewed during the following month of May.
THE MEDIDA PROVISORIA 50
THE GOVERNMENT RESPONSE TO THE STRIKE MOVEMENT
The government saw these strikes as an attempt to destabilize the government and its
economic plan by the radical labor movement. The Planalto and the military considered
that the strikes were being manipulated by the radical groups for political and
ideological motivations. The military view on the increasing strength of the strike
movement was that the country was reaching “the border of social indiscipline and even
urban guerrilla” (Globo 4-28-89). The military ministers and the chief of the SNI met
together to analyze the strikes. They prepared for intervention in case of a request for intervention from the state or national government. At the same time they urged Sarney to take tougher measures. The MP 50 was the direct result of military pressure on president Sarney. The pressure to regulate the strike movement also came from the
Judicial Power. One of the judges of the Supreme Labor Court, Marcelo Pimental, accused the government of being responsible for a series of strikes in the country. He criticized Labor Minister Dorothea, who was supportive of the workers’ right to strike,
“for practicing demagogy and for not being competent for the job” (FSP 4-28-89). 217 The government had the perception that the absence of the complementary legislation
to the new constitution was stimulating strikes. The old strike laws were rendered
ineffective with the guarantee of the unlimited right to strike in the new constitution.
The complementary law that regulated the strike according to the new constitution was
yet to be made. The team of ministers led by Labor Minister Dorothea Wernecl: was
preparing the government bill for the strike law. Labor minister Werneck was enjoying
the respect of the labor movement and she supported the ample right to strike. Her draft
did not prohibit the exercise of the right to strike in the “essential” services. It
regulated only how “essential” sectors would function during the strike and how the
abuse of strikes would be punished (FSP 4-22-89).
But Werneck’s strike bill did not please Sarney. In the meeting with the president and other ministers, Werneck opposed the amplification of the list of essential services, the introduction of the penalty of one to six months of prison for the workers that abused the right to strike, and the creation of the “civil requisition.” But Minister Werneck was isolated 2 and Attorney General Saul Ramos’ tougher version won the support of other ministers, including the economic ministers and the chief of SNI. Thus, the liberal minded Labor Minister was isolated and excluded from the process at the final stage of decision making. The more conservative ministers and the military prevailed easily.
Sarney initiated the talks with the pro-government party leaders in the Congress.
But the most important allies of the government did not have a consensus on how to handle the strike movement. For example, Jose Lourengo of the PFL believed that the regulation of the right to strike was unnecessary. Citing the case of Italy, he argued that it was better for the society to regulate the abuses of the strike right, either through
2 Minister Werneck was surprised to find that her version was overturned by Sarney, because her version had been made with the consultation with the ministers of SNI, Military Cabinet, and Civil Cabinet. She contemplated resignation but eventually stayed in her position (JT 4-29-89). 218 protests or non-adhesion to the strike. At the same time, he urged Sarney to use the
armed forces to deter the strike movement. Some leaders thought that the government
should wait until the Congress took the initiative (JT 4-25-89). This lack of consensus
even among the closest allies of the government in the Congress led the government to
believe that the normal process of legislation would drag the legislation process
indefinitely in the Congress.
Actually there were already eight bills on the strike law waiting for deliberation of the Congress. Some of them dated back to 1983 and obviously were unconstitutional in terms of the new constitution. Out of eight bills that had been shelved in the Chamber six of them were elaborated before the new constitution was adopted (three in 1985, two in
1986, the other in 1987). Two other recent bills were made by the leftist politicians and had little chance of being discussed in the Congress (FSP 4-16-89). Faced with this stalemate in the Congress and the lack of consensus among congressional allies, the government resorted to the Medida Provisoria (MP). The MP had the force of the law immediately, but was effective only one month. If no action was taken by the Congress within a month, the MP was supposed to lose the force of law but could be reissued by the government.
THE CONTENTS OF THE MP 50
The MP 50 was a little bit more liberal than the old strike laws but still had some of the authoritarian elements of the old laws. It allowed strike in “essential” activities but the president had the power to convene the workers in the case unions did not take the necessary measures to provide urgent service to the population or to protect the property of the employers. It brought back the old idea of a quorum in the union assembly for the strike to be declared . It also provided harsh punishment for those who 219 abused the right to strike. Once a certain sector was designated by the president of the
Republic to provide continued service (the sectors with civil requisition), the strike
was supposed to be terminated. Violations constituted the abuse of the right to strike and
were subject to punishment. It meant in practice that the president had the power to stop
the strike as he saw fit. Disobedience to public authorities and even “moral offense”
constituted abuses that could be punished up to two years.
The main points of the MP 50 were as follows. 1) quorums: The strike should be
declared with the approval of a third of the union members in the general assemblies of
the unions: 2) essential services: the strike would be permitted on the condition that
strike is notified to the employers and users or population in the community are notified
of the strike 48 hours in advance, designating workers who would maintain urgent
services to the population and the preservation of equipment and installations; 3) list of
essential sectors: water, electric energy, sewer, garbage collection, loading and
unloading at the port and airport, hospital, processing of data in the public
administration, fuels, medicines, food items, air line controllers, Central Bank,
radioactive materials, nuclear materials and related technological information; 4) civil
requisition: the president of Republic can convoke the civil requisition of the striking workers to maintain “essential” services if the service is not provided by the unions;
5) the abuse of the right to strike: abuse includes strikes not observing the process defined in the MP 50, violent picketing, damage to the property of the company, disobedience to the authority, occupation of the work place, non-designation of the workers for “essential” services; 6) crime against the labor organization: disobedience to civil requisition, attempt to disrupt the activities carried out through the civil requisition, moral offense to the public authority, lockout, strike ignoring the judicial decision 7) penalties: one to six months in prison and a fine, which could be prolonged for up to two years when accompanied with violence (FSP 4-28-89). 220
Table 30: Comparison of the MP 50 and the old strike laws
Old strike law, no.4,330 (1964) MP 50 (1989) Decree law 1,632 (1978) Declaration of Approval in the general assembly No need for two convocations. But the strike with 2/3 of union members present 1/3 of the union members in the in the first convocation, and 1/3 in assembly required for the approval the second convocation. The of the strike. Voting procedures will convocation need to be published in be determined according to the union the local newspaper 10 days before statutes. The secret vote was the assembly. Secret vote with the abolished and the representative of presence of the representatives of the Ministry of Labor is not the Ministr/ of Labor required. Essential The strike is prohibited. The strike Striking is permitted, as long as 1) services is allowed only when the employers the strike is notified to the do not pay the wages or do not employer and to the community 48 follow the decision of the Court. hours in advance, 2) the workers maintain urgent services to the population and the property is protected. List of essential Water, energy, gas, sewage, Refuse collection, process of public services communications, transport, loading data, preservation of radioactive and unloading, funeral services, material, Central Bank was added. In hospitals, paramedics, sale of basic the case of other banks, cashing food, pharmacies, banks, industries checks is considered essential. linked to the national security Public sector The strike is prohibited in the direct The regulated sectors should be administration of the federal, state, defined through the complementary and municipal government. law. Penalties The abuses are punished with the The abuses are punished by the warning, suspension up to 30 days warning, suspension and dismissal. and dismissal. The crimes with the The crimes are punished with prisonment of six months to a year prisonment of one to six months and and the fine. the fine. In case of violence, the detention will be one to two years, in addition to the penalties of the penal code. Picketing Peaceful picketing is permitted the same Lock-out prohibited the same
Source: FSP 5-7-89 221 LABOR AND BUSINESS RESPONSES
The MP 50 faced harsh criticism from union leaders and the press. One commentator
in the newspaper called it "bureaucratic ritual and formalities" that would be
ineffective like the old law. (Luis Francisco Carvalho, FSP 4-29-89) Meneguelli, the
president of the CUT, declared that MP 50 would not be respected by the workers. He
argued that MP was unconstitutional and the only way to defeat MP was to continue to strike (FSP 5-5-89).
Even the moderate groups criticized the MP 50. Magri, the new president of the CGT, said, “This government committed an error to make this MP. Nobody is frightened by this. It lacks good sense. If the negotiation with the companies does not go well, this MP does not make any sense to me. I will strike in these companies. If workers are essential, you should pay their ‘essentiality’” (FSP 5-7-89). Ulysses Riedel, the technical director of the DIAP also criticized MP 50 as unconstitutional, absurd, and illegal. He argued that in no country of the world were union leaders responsible for the illegal acts of strikers in the way the MP 50 stipulated (JBr 4-29-89).
Medeiros, the future president of the Forga Sindical which was created in early
1991, said that it would the impossible to observe MP 50. For example, for a metal union of SP of which he was the president, it was simply impossible to get together
50,000 members (1/3 of 150,000 union members) for a vote. Another problem he pointed out was the question of representativeness. Only the union members were allowed to participate in the decision on the strike, leaving the non-union members who were majority of workers in most of the categories out of the decision making process
(JB 5-6-89). The jurist Amaury Mascaro do Nascimento also agreed that “the law which demanded a quorum in the general assembly is designed not to be carried out” (JB
5-6-89). Many other commentators pointed out the difficulty of observing the law, 222 especially in the case of the air lines and railways where at least 1/3 of the lines would
need to stop just to decide whether they should enter the strike or not (JB 5-6-89).
Leaders of the business circle were not completely in consensus on how to handle the
MP on the strike. There were three distinct types of responses. What complicated the
business response was the fact that the government also announced the MP 52 which
punished the employers who charged more than the official price guideline. The first
response was the protests against both the MP 50 and MP 52. Mario Amato, the
president of the FIESP defended the rejection of the new MPs on the strike law (MP
50)and the law of consumer defense (MP 52). He called the current period of the
economy as “a state of terror”. He protested that neither the employers nor the workers
were consulted (CB 5-3-89). Second, the president of the CNI, senator Albano Franco
supported the MP 50 saying that MP 50 was opportune because it outlined “a good direction for the right to strike”, especially “in a moment in which strikes are on a wave, considering the radicalization and the intransigence of some union leaders” (GM
5-8-89). Third, the vice-president of the FIESP supported some regulation against the
“savage strikes"(referring to strikes that involves violence and the occupation of the factory) but preferred that the matter be decided by the Congress. Della Mana, the director of the FIESP acknowledged the right of the workers to strike but criticized the
“unrestricted right of the strike” in the new constitution.
Thus business responses ranged from outright support to protests. The protest, however, was triggered by the MP 52, another strong hand of the state toward the business circle. Why did some business leaders not welcome strong measures against the strike movement? This can be understood by the fact that the interests of the state and business were not exactly the same. Workers’ strikes were not the only thing that bothered business leaders. The employers were also against price controls, and against the frequent shock economic measures that involved too many regulations and too many 223 changes in regulations. The lack of the stability of economic measures had annoyed
business leaders (Payne 1992:5-6). Many employers were ready to make a deal with
labor unions as long as they could transfer wage increases to price increases. In
contrast, the priority of the government was the containment of inflation. Moreover,
with the increase of strikes of public employees (government officials, health and social
welfare workers, teachers and professors), the government as an employer was the one
directly hit by the sweeping strikes. Strikes in the federal banks and the docks seriously
threatened the economic activities of the country.
The oscillation of the business leaders was demonstrated by the fact that Albano
Franco of the CNI agreed with Mario Amato of the FIESP and Antonio de Oliveira Santos of the CNC (National Confederation of the Commerce) to approach workers to discuss the change of MPs proposed by the government (FSP 5-9-89). Business leaders were more concerned about the MP 52 than the MP 50. The protest against state intervention in the economy and the demand for the “free initiative” of business (meaning diminished role of the state in the economy) had been one of the old demands of the employers. Thus despite the support of the conservative employers and politicians (especially PFL) the
MP 50 did not enlist the total support of the employers.
The MP 50 did not have an expected effect on the strike movement. It faced united opposition from the labor movement. The metal workers in the ABC region kept striking against the proposal of negotiation by the union leaders. The confrontation of the metal workers with the military police resulted in the injury of 20 workers. Even after metal workers in ABC ended their strike, almost 500,000 workers and public employees were on strike two weeks after the MP 50.3
3 400,000 school teachers, 85,000 subway and railroad workers, 32,000 public employees were on strike in the middle of May (JB 5-13-89). 224 SUCCESS OF THE SUBSTITUTE BILL
RESPONSE OF THE CONGRESS TO MP 50
Despite the attempt of the PT to rule out the MP 50 on the basis of its unconstitutionality, the Congress decided to compose the Joint Committee to examine the urgency and significance of the MP 50, which were the two principles to examine the
MP. The leaders of the PMDB, PFL, PDS and PL, mostly with conservative/moderate and pro-business orientations, 4 approved the urgent nature of the matter in the deliberation of the MP 50. Conservative politicians emphasized the urgent need to revise the strike law in fear of “disorder and anarchy” (CB 5-3-89). Obviously a series of violent incidents during this period such as the destruction of the monument to the dead workers in Volta Redonda, the invasion and plunder of Volkswagen, and the confrontation between the police and workers in the ABC area, influenced the decision of the Congress to approve the urgency of the matter.
However, the decision to take up the MP 50 did not mean that the Congress supported the MP 50. Leaders of the PMDB wanted to soften the restrictions of the MP 50 while preferring to put some limits on the strike movement. The leader of the PMDB in the
Chamber argued that “The strikes are not costless. There should be an order and limit, because it is part of the democratic game” (Ibsen Pinheiro, JBr 4-29-89). The PFL was supportive of the MP 50. Leftist and progressive politicians were harsh in criticizing the MP 50. Lula, the president of the PT, protested that president Sarney and
Army Minister general Leonidas had gone back to the (authoritarian) past. According to him Sarney should change the economic policy not the strike law. The leader of the
4 By this time, the progressives of the PMDB broke with the PMDB and created the PSDB criticizing the PMDB’s clientelistic politics. 225 PSDB, Mario Covas also criticized the MP 50 by saying that “the government cannot
limit what constitution already defined.” Deputy Euclides Scalco, the leader of the PSDB
in the Chamber called the MP 50 “draconian”, and guaranteed that MP 50 would not pass
the Congress (CB 5-3-89). The PCB took the matter to the Supreme Federal Court in
the hopes that it would be determined to be unconstitutional.
Most of the party leaders in the Congress shared the perception that MP 50 was too
harsh to the workers. Even the conservatives admitted that there were many
controversial issues in the MP 50. The vice-president of the conservative PDS affirmed
that civil requisition and the punishment of the union leaders for the violence committed
by the workers collided with the civil right clauses of the constitution (JT 5-3-89).
Senator Chiarelli, the leader of the PFL, also commented that MP 50 was unconsitutional
(JBs 5-4-89). The most polemic issues about the MP 50 included: 1) civil requisition
in case of strike in essential services; 2) the exigency of 1/3 of the union members in the declaration of the strike; 3) punishment of union leaders for the acts that were committed by the striking workers; 4) the number of essential sectors.
THE SUBSTITUTE BILL OF RONAN TITO
The Joint Committee appointed the PMDB leader in the Senate, senator Ronan Tito, as a rapporteur. He once was the Secretary of Labor in Minas Gerais under Tancredo Neves as a governor. He was one of the moderate progressives who supported the six hour shift and many benefits but opposed job security, 4o hour work week, and factory committees.
His pro-labor score recorded by DIAP was an average of 6.25.
The rapporteur is the person that is responsible for the study of the alternatives and recommendation of the best option for the Congress to follow. In this process the rapporteur is usually involved in numerous talks and compromises with all the party 226 leaders. Since he is the one who sets the tone of the congressional debates, the role of the rapporteur is critical in determining the direction and range of the reform. The fact that moderate progressive was in charge of the recommendation of the draft bill suggested that strike regulations would not be as limitless as the leftists wanted nor as restrictive as the government wanted.
Ronan Tito wanted to eliminate some sectors (mail and telecommunication, sewer, refuse collection, banks) from the list of “essential” activities. He argued that the ILO study did not consider strikes in these activities harmful to the society. The civil requisition would not be allowed, because according to him a person convoked against one’s own will could sabotage machines and equipment of the work place (JT 5-9-89).
He was interested in introducing the British system in which workers vote in the work places and need a majority (half plus one) in approving a strike. But he soon gave up the idea of a quorum after talk with the CUT president Meneguelli. He admitted that
“Meneguelli convinced me of some things" (Estado de Minas Gerais 5-12-89). He accepted the idea that “a forced strike without the support of the (workers of) category will always be destined to fail”, thus leaving each union to make the procedure in their own statutes. He also maintained a benign view of strikes and refused to criminalize the mobilization of the working class. He repudiated the government view that the strike movem ent was threatening Brazilian democracy when he said that “whenever accidents occur, or criminals infiltrate the strike movement, many people think that the democratic system is threatened. On the contrary, it is necessary for us to believe in the strength of democracy to discover the way out of the crisis” (Estado de Minas Gerais 5-
1 2 - 8 9 ) .
The main ideas of his study included the proposals such as 72 hours of advanced notice in case of strikes in “essential” sectors, a reduction in the number of “essential” activities from 13 to 10, double payment for workers carrying out minimum function Ill in the “essential” services, prohibition of lockouts, peaceful picketing, exclusion of the case of factory invasion from the strike law (which is the case of the common crime).
The ideas of Ronan Tito got the support of the employers. The president of the CNI, senator Albano Franco approved the work of Ronan Tito, though with minor disagreement: “The work of Senator Ronan Tito merits applause, because his proposal reinstated the power of unions by allowing the deliberative power to the unions or strike committee. It also prohibits a surprise strike by stipulating advance notice. This is a great step for ordered and civilized demands” (Globo 5-23-89). It is quite noteworthy that even the figure like Albano Franco, the representative of the conservative employers, supported the independent power of the unions to decide to go on strike. Given the notorious position of the CNI on union power and his support for the MP 50, it looks like that he was playing an opportunistic game.
Ronan Tito’s idea also got the support of both the conservative and moderately progressive politicians. For example, Jarbas Passarinho, former Labor Minister under the military regime, praised Ronan Tito’s bill as superior to the MP 50. Some of the leftists also supported his draft bill. Carlos Alberto Ca6 of the PDT whose pro-labor score recorded a full! 0 point in the CA supported reasonable regulation of the strike right by emphasizing that “right of the strike cannot confront the general interest of the society” (Globo 5-23-89).
The CUT and the PT opposed the Ronan Tito bill. The best the CUT and the PT hoped for was no regulation. They wanted to simply shelve the MP 50 which would lose its force in a month. At least they wanted the substitute bill to be limited to the definition of the
“essential” activities (FSP 5-19-89). The position of the moderate unions was similar to the CUT position. Despite their criticism against the strike-first strategy of the CUT unions, moderate union leaders were opposed to the existence of the strike law. For example, Magri prefered to “maintain the current practice of case by case bargaining” 228 and to limit the essential sectors only to the suppy of water, electric energy, and teh
medical services.
THE APPROVAL OP THE NEW STRIKE LAW
Ronan Tito made an effort to achieve a consensus on strike regulation. The vote was assumed to be made after the agreement at least between the PMDB and PFL. However, the political parties did not reach a consensus on the Ronan Tito’s substitute bill. The
PFL considered the text of Ronan Tito very soft and preferred the entire MP as issued by the government (FSP 5-19-89). The PT argued that the law should be limited to defining what constitute the “essential” services. The PDT wanted to leave the matter to the president of the party, Brizola, after he became president of the Republic in the upcoming presidential election (FSP 5-22-89).
Without consensus among the parties, MP 50 was left to lose its effectiveness.
Without decision in the Congress, the government was able to issue another MP with the same contents or even harsher contents. However, the MP suffered the erosion of its validity by the continuing strikes and the substitute bill that was sponsored by the ruling bloc in the Congress. MP 50 was not particularly respected by the workers.
Workers in the ABC booed even the most combative union leaders when they tried to persuade the workers to stop striking (JT 5-3-89). Public opinion on MP 50 was not favorable.5 By the end of May the strike movement became moderate, partly due to fatigue on the part of both the employers and workers which led to the mood of dialogue, and partly due to the fact that agreements had been already made in the most important sectors such as that of metal workers in the city of S3o Paulo and the ABC region.
5 According to the survey of 1,700 people in the five major cities, 34% approved the MP 50, 31% was against it, and 35% did not have any opinion (JT 5-10-89). 229 With the MP 50 invalidated after one month without congressional decision, the
government reissued another MP without changing the contents. Only the number had
changed from 50 to 59. The bill of Ronan Tito did not please the Planalto. When the new
Joint Committee was constituted, Ronan Tito was reappointed as the rapporteur of the
strike bill. Deputy Paulo Paim of the PT supported his reappointment as a rapporteur
which suggests that PT could not find a better option in the moderate Congress. After a
series of attempts to reach a consensus bill, Ronan Tito gave up the idea of consensus due
to the opposition of the PT and reached agreement with the conservatives (interview
with Ronan Tito 12-16-93). The bill finally passed the Congress on June 22. Out of
330 congressmen present in the plenary, 244 approved the bill of Ronan Tito, while 82
opposed it. It was turned into Law no. 7,783 on June 28 of 1989.
The new strike law did not prohibit political® and solidarity strikes explicitly
(Nascimento 1991:447-448). It eliminated the formal requirement for the declaration
of the strike and left it to the statutes of each union. No quorum was required. Strikes of
the public employees and the workers of the essential sector were guaranteed with the condition that unions attend the indispensable need of the community. The peaceful use of
picketing, persuasion of other workers to participate in the strike, and collection of the strike funds were allowed. The strike was recognized as a constitutional right, rather than a crime. Decriminalization of the strike was manifest in the elimination of the punishment for the abuse of the strike right. Contrary to MP 50 which listed the
6 Purely political strike that has nothing to do with the labor disputes with the employers is not allowed by making it explicit that strike can occur only when the bargaining process is in impasse (Article 3). However, the strike against the government economic policy, for example, can be considered as a labor dispute due to the difficulty of making a clear-cut distinction between the political and economic demands, see Nascimento (1991:449) 230 Table 31: Comparison of MP 50/59 with the substitute bill of Ronan Tito (new strike law)
MP 50/59 Ronan Tito’s substitute bill declaration of the Minimum quorum (1/3) of the Union statutes decide the strike union members in the assembly procedures required essential service Water and energy; sewage and Services in italics in the left refuse collection; loading and column are eliminated. unloading in the port, hospital; funeral service; collective transport; bank compensation; postal service and telecommunication; data processing of the public administration and essential services; production, transport, distribution, and sale of food, medicine andcombustibles; preservation, use, and control of the radioactive and nuclear material, and relevant technological information; flight control; employees of the Central Bank of Brazil advanced notice Obliged to communicate to Not necessary in non-essential employer and 48 hours advanced sectors, 72 hours period in notice essential services Civil requisition Permit convocation of workers Eliminate requisition, but permit by the employers to guarantee the convocation of service indispensable essential providers activities; The president of the Republic can determine civil requisition; Abuse of strike Violence or threat to the Non-obedience to the obligations of workers who are willing to the workers and union in the law, work, damage to employers including previous notification, property, inciting disobedience attem pt at collective bargaining, to the legitimate order of the use of violent means, refusal to authority, participation in the maintain equipment, failure to strike of the people alien to the provide indispensable service to category, occupation of the the community establishments, failure to provide indispensable service to the community
Note: The text of the MP 50 was published in FSP 4-28-89 . The text of new strike law is available in any text of the CLT. 231 cases of punishment for up to six months, the new strike law relegate the cases of abuse
to the relevant labor, civil, and penal law. Though the new law is not liberal enough to
satisfy the militant union leaders and leftist politicians, it was much more liberal than
the old laws or MP 50/59.7 Table 31 presents the major difference between the new
strike law and the MP 50.
The leftist parties (PT, PCB, PC do B, PDT, PSB) opposed the Ronan Tito bill. The
leaders of the conservative and progressive parties (PMDB, PFL, PDS, PSDB, PL, PDC,
PTB) reached agreement among themselves and passed the bill. Again as in the CA, the
role of the centrists was central. The leftists and many progressives of the PMDB and
PTB were against Ronan Tito’s bill as an unconstitutional and anti-strike measure.
However, the progressives were divided. Table 32 shows the distribution of political
orientations based on the pro-labor score recorded by the DIAP during the CA.
Table 32: Distribution of political orientation of the members of the Congress in the voting of strike bill
Political Right Center-right Center-left Left Total orientation Conservative Progressive Pro-labor (0-3.0) (3.1-5.0) (5.1-7.0) (7.1-10.0) score Support 85 36 54 32 207 Opposition 2 3 6 64 75
Source: Calculation is based on the voting record on the Ronan Tito bill. Diario do Congresso Nacional, June 1989: 2,180-2,182. Pro-labor score (average of first and second round vote) is calculated by the DIAP. DIAP, Quem foi quern na Constituinte, 1988 Note: 1) Political orientation is classified by the pro-labor score of the DIAP. 2) The number of supporters and opponents of the Ronan Tito bill is less than the actual number of congressmen who voted due to the substitutes voting and lack of pro-labor score. The calculation covers 85% of the supporters and 91% of the opponents. Seven members of the state of Tocantins who all voted for the bill are not included in the calculation due to the lack of record of the score.
7 For the criticism of the new strike law, see Gacek 1 993:74-79 232 As Table 32 shows, the pro-labor force that combines the leftist politicians and
progressives of the non-socialist parties was divided, while the conservatives and
centrists were united. The members of the leftist parties who opposed the bill numbered
33, which was less than half of the opponents of the bill. The centrists (the center-left
and the center right whose score range is 3.1-7.0) overwhelmingly supported the
Ronan Tito bill. The progressives, those who scored more than 7.0, were divided evenly
in the voting, while most of the progressives who had given full support to labor
demands (score 10) during the CA tended to oppose the bill. This was not the formula for
the success of the pro-labor forces in the Congress where leftists occupied a minority
position (more or less 10% of the members of the Congress).
EXPLAINING THE FAILURE OF MP 5 0 /5 9 AND THE SUCCESS OF THE SUBSTITUTE BILL
DEMISE OF MP 5 0 /5 9
The prominent role of the military in issuing MP 50 and its easy demise reflects
both the power of the core conservative elite to initiate measures to control labor
militancy and its limit in controlling labor mobilization and the Congress. MP 50/59
was the product of military pressure on president Sarney. The military not only
presented “pessimistic and catastrophic” estimates of the strike movement but also
participated in the decision making process that dealt with the strike movement and the strike law. The SNI and the Minister of the Military Cabinet participated in the meetings that discussed how to contain the strike movement. Even after issuing MP 50, the military ministers sent the message to Sarney to conduct effective work in the Congress to pass MP 50. They also pressed the Federal Police to summon the CUT president,
Meneguelli, to investigate his call for disobedience to the MP 50. They even complained 233 that MP 50 was not tough enough. According to the view of the military MP 50 was
“sugar water” (agua de agucar). Sarney had to have Saul Ramos, the rapporteur of the
MP 50, to explain that MP 50 was an effective measure. The military was reportedly
satisfied only with his detailed explanation and his guarantee that the old law would be effective again in case MP 50 did not pass the Congress (CB 5-4-89).
The SNI chief also tried to influence the process of making the substitute bill by calling the rapporteur Ronan Tito to discuss the issues. However, the weight of the pressure did not seem to be significant. Ronan Tito himself denied that he received any pressure from the military (Interview with Ronan Tito 12-16-93). Whatever the level of pressure by the military, the gravity of power was tilted toward the Congress after the new constitution was promulgated. The military, while still an independent power in the new democracy, did not command the control of the Congress.
In addition to the relative isolation of the government, the MP 50 lacked moral and theoretical appeal. It had many authoritarian elements (quorum, civil requisition, steep punishment for the abuse of the right to strike, etc.). It failed to persuade even the conservative politicians that it would stop the strike wave, which was the reason why they supported the Ronan Tito bill without insisting on MP 50/59. The union leaders criticized the unreality of the requirement of the quorum. Even the leader of the PFL, senator Chiarelli, admitted its unconstitutionality (JBs 5-4-89).
Labor was united in opposing MP 50/59. Both the CUT and CGT ignored and defied MP
50/59. The conquest of the right to strike regardless of the legality of the strikes, which has been a dominant pattern since the mobilization of 1978, was the backdrop of the failure of the authoritarian MP 50/59. It was manifest in the response of the conservative politicians. Jose Lourengo of PFL argued that society's response was more effective in regulating the strike movement. The harsher authoritarian law lost effectiveness and authority when the rank and file became mobilized. The legal 234 achievement of the labor movement in the constitution facilitated the demise of MP
50/59 due to its obvious unconstitutionality. Imposing the quorum was disputed by
many jurists as violating the autonomy of unions stipulated in the constitution. Even the
conservative leaders questioned the constitutionality of the civil requisition.
Employers’ support for the MP 50 was not impressive either. The FIESP president
was terrified by MP 52 which came out at the same time. State intervention was not
welcomed either in the form of price controls or in the labor front. Some of the
employers tried to approach union leaders to discuss their responses to MPs in search of
a common strategy to deal with state intervention. President Sarney himself was wary of
the possibility of joint action between the discontented employers and the workers. He
personally added to the draft of Saul Ramos that employers who instigated strikes would
be punished. While the more conservative CNI was supporting the MP 50, its support was rather ambiguous and fluctuating. Employers knew that direct bargaining and dialogue with the workers were a better option for them. The achievements of the labor movement through mobilization under the authoritarian regime meant that reality was far beyond legal control in the democracy. In addition, it was not employers that pressured the MP 50 but the state sector (the military). The strike movement in thel 980s came to be dominated by mobilization in the public sector in which the government was not the third party but the single largest employer. It was the crisis of governability rather than the crisis of the supremacy of the capital.
In sum, the political opportunity structure was not favorable to the government.
The government failed to enlist the support of the conservatives and employers in transforming the MP 50/59 into law. The labor conquest of the right to strike was firm both through the new constitution and through the continued mobilization in the work place. For the regulation of the strike, legislators had to find a more reasonable method than MP 50. As in the case of the Pazzianotto reform, contrary to the implications of the 235 continuity thesis, the power of the conservatives, even with the active support of the
military, was not able to determine the direction of the labor reform.
SUCCESS OF THE SUBSTITUTE BILL
If the issuance of the MP 50 reflected the power of the authoritarian elite in the new
regime, the defeat of MP 50/59 and the success of the substitute bill reflected the
independent power of the Congress and the importance of the centrists on labor issues.
Since the Congress was working as the CA during the 1987-88 period, the distribution
of power among the differing political orientations remained the same, except that the
center left of the PMDB split off from the PMDB and created the PSDB in the middle of
1988. In the case of strike law of 1989, the moderate progressives, represented by the
rapporteur Ronan Tito, were the main force to reach an agreement with the
conservatives while trying to make a consensus bill. The success of the substitute bill
was possible because half of the progressives and most of the centrists allied with the
conservatives. The conservatives, especially of the PFL, had no chance to transform the
MP 50/59 into law from the start. There was widespread consensus on the need for the
Congress to put forth a less restrictive draft bill. Neither the leftists nor the
conservatives had the enough power within the Congress to push their agenda without the
support of the centrists.
While an alliance was made between the conservatives and the centrists, leftists
were not excluded in the process of consensus making. Ronan Tito tried to make a
consensus bill through agreement with all of the parties. According to him, there were
many moments that he believed that he had reached an agreement which turned out soon to not be the case (Dicirio do Congresso Nacional, June 1989: 2179). As a result of the consensus strategy of Ronan Tito, communication channel were open to labor. Meneguelli 236 of the CUT was able to eliminate the quorum requirements through the lobby of Ronan
Tito. However, the opening of the channel was not a sufficient condition for the leftists to
block the passage of the substitute bill.
There is no evidence that electoral allignment (the need to heed the demands of the
social actors to ensure the electoral victory) played any significant role. The centrists
and the moderate progressives did not receive any pressure from the public as they did
during the CA. In contrast to the offensive posture during the CA, the CUT was in a
defensive position due to the criticisms from both the government and the moderate
unionism for being responsible for the political and social disturbances. While still
defiant in ignoring the MP 50, the CUT did not and could not defy the congressional
process. What it did was to ask Ronan Tito to postpone the vote for 90 days during which
unions could establish self-regulation (Ethics Code) to guide the striking unions and
workers to pay attention to the immediate needs of the community (GM 6-26-89).
Another reason why the substitute bill of Ronan Tito was successful against the
wishes of the labor movement and the leftist politicians was that it had a certain moral
appeal enough to draw the support of the centrists and at least half of the committed
progressives who had made possible the conquest of numerous labor rights in the CA. It confirmed that workers were the sole subject who decided on the opportunity and range of interests to be defended by the strike. It also guaranteed the strike right in the
“essential” sectors in exchange for the maintenance of indispensable services to the community (as was stipulated in the Constitution). The procedure of declaring strike was simplified. The spirit of the game was “reciprocal rights and obligations”
(Nascimento 1991:450-452). It allowed peaceful means for the propagation of the strikes while banning violence and the threat to property and workers who wanted to work. It was not particularly favourable to the striking workers but at the same time was not particularly disadvantageous to the workers. 237
While it is true that new strike law is not completely neutral8, it had the support of
the general public. The survey by IBOPE (Brazilian Institute of Public Opinion and
Statistics) announced in May 1989 shows that only 35% of the people surveyed
supported the strikes in any sector. 31% of the respondents favored maintaining
“essential” sectors where the right to strike was regulated and 32% were against
strikes in any sector. Almost all of the respondents (92%) supported the exercise of the
right to strike through peaceful means. 87% of the respondents wanted the unions to
maintain services in “essential" sectors during the strike. 79% of the respondents
preferred a 48-hour advanced notice in the strikes in the “essential” sectors (JT 5-
10-89). The attitude of the general public presented by the IBOPE survey was that
while the right to strike should be respected the interests of the society or of the general
public should be respected by means of a moderate and reasonable regulation of strikes.
According to Ronan Tito (interview 12-16-93), there was a change in the mood of the day about strikes from enthusiasm to a more reserved attitude by the middle of 1989.
This trend is also revealed by the by the changing attitude on the strike movement. As
Table 25 (Chapter 5) reveals, during the CA only 1-2% were against strikes in any sector which increased to 32% in the Survey of IBOPE. This new attitude was commensurate with the spirit of the new strike law (the balance between the recognition of the strike right and the regulation of the excessive mobilization), which contributed to the support of the centrists for the Ronan Tito’s bill.
Moreover, the substitute bill did not incur any significant business opposition. The most conservative representative of the employers, senator Albano Franco, the president of the CNI, was supportive of the substitute bill. Both the CUT and CGT were against the regulation of strikes and accordingly did not support the new strike bill. However, the
8 The new strike law was designed to control the strike movement by making it precondition of legal strike to reach the impasse in the collective bargaining (Article 3) and by making the continuing stoppage after the court decision constitute the abuse of the strike rights (Article 14). 238 intensity of opposition was quite moderate. Their opposition was not a frontal attack, as was the case with MP 50. Both the radical and moderate union leaders accepted the need for the minimal rule for the maintenance of the unavoidable service to the community.
CUT leaders were preparing a self-regulated “Ethics Code” to guide the strike movement. The moderate union leaders acknowledged the need to have a “strike law that determ ines the certain areas” (Magri, JT 5-8-89) or “law of good sen se” (Medeiros,
Globo 5-23-89). This rather reserved opposition and lack of mobilization against the strike law, together with the support of the general public for the regulation of the strike, were not strong pressures against the establishment of the new strike law.
The above analysis suggests that the factors that affected the success or failure of the reform effort were different for MP 50/59 and the substitute bill of Ronan Tito. These factors and their impacts are listed in Table 33.
Table 33: The factors that affected the failure of the MP 50/59 and the success of the substitute bill
The failure of MP 50/59 The success of substitute bill Political The government and the military The alliance among the opportunity was isolated. The supporters in the conservatives, centrists, and structure congress was not enthusiastic due to moderate progressives. Division of the controversies involved. the progressives. Labor unity United in opposing the MP: frontal United in opposition, but the attack intensity of opposition was quite moderate Business Business support was tempered by United in supporting the regulation response the MP 52 which punished the of the strike employers who violated the official price guideline Moral appeal Lack of any moral appeal. Harshly Majority of the population supported criticized for being authoritarian the contents of the substitute bill and unconstitutional (maintenance of the service in the essential sector, peaceful picketing) Labor conquest MP 50/59 was unrealistic in Conquest in the Constitution set the imposing the authoritarian elements tone for the substitute bill to the firmly rooted strike movement CONCLUSION
The continuity in the strength of the conservative political elite within the
government was not enough to enact a restrictive strike law. Though military pressure
was the background for MP 50/59, these MPs lacked moral appeal and the political
support both in the Congress and in the civil society. MP 50/59 were rendered
ineffective due to continued strikes and rank and file activism.
The softer law was made by the alliance of the conservatives, centrists, and the
moderate progressives based on the support of the general public for the moderate
regulation of the strike movement. The success formula of labor during the CA, that is,
alliance of the leftists and the progressives with the support of the centrists, was not
repeated. Progressives were divided and could not enlist the support of the centrists and
moderate progressives. The new law was “equitable in relation to the interests of the employers and employees” (jurist Octavio Bueno Magano, FSP 6-24-89). This reasonableness of the bill was the key to the demobilization of the labor movement on the strike law. The lukewarm opposition and the lack of mobilization of the labor movement against the substitute bill combined with business support resulted in the passage of the new strike law. As was the case during the CA, the key to the success and scope of the reform, were determined by the responses of the centrists and the moderate progressives. CHAPTER VII
CONCLUSION
Labor reform in post-transition Brazil has been made in the historical context of the
mobilization of the working class in an elite-controlled conservative transition. Our
guiding question has been what factors facilitate or impede labor reform in this setting.
How did the strong presence of conservative elites affect the scope and direction of the
labor reform? How did the prior mobilization of the working class affect the labor reform? How did these two presumably conflicting forces affect the final output of the labor reform efforts? How much change in the labor relations system is possible in this setting?
THE POSSIBILITIES AND THE SUCCESS OF THE LIBERAL LABOR REFORM
The labor reform under the Sarney government was more liberal than the conservative forces in the government and the Congress would have liked. The government-initiated bill during the 1985-87 period failed even without an opportunity to be examined in the Congress. Actual reform was made through the CA during 1987-88. The right to strike was expanded and many benefits were approved.
The advancement of the workers’ rights in the CA was more than the progressives and leftists had expected. While the strike law of 1989 did not completely satisfy the leftists, it was quite a liberal one compared to the Sarney governm ent’s MP 50. How was
240 241 it possible for the presumably weak labor movement to manage to achieved a substantial
advancement of labor rights?
The first conclusion of this study is that the mobilization of the working class and the
resulting crisis of the corporatist labor system have constituted fundamental
parameters of the labor reform in Brazil. The constrictions resulting from the strong
continuity of authoritarian elements in the new democracy were relatively minor,
despite the fact that in some cases this limited the scope of the reform (especially the
failure of the reform of job security). The crisis of the corporatist labor control
mechanism based on rank and file activism and combative unionism shaped the form of the labor reform. This is so in three respects: 1) As the corporatist mechanism lost authority and effectiveness to control labor mobilization, the ruling elite chose to pluralize and atomize the union structure. The corporatist mechanism was no longer a viable option for conservative political elites to control increasing labor conflicts; 2)
The scope of the labor reform was fundamentally determined by the unity/disunity of the labor movement. The reforms that received the united support of the differing tendencies of the labor movement, such as the right to strike and numerous benefits for workers, were mostly successful. The reform of union structure, however, failed due to divisions within the labor movement between radicals and conservatives/moderates; 3) Most of the reform measures that passed the Congress were in most cases the ones already practiced either through collective bargaining or simply as a matter of fact. The strike has been conducted regardless of its illegality. The 44 work hour week was widely practiced even before it was encoded legally. Job security and factory com m ittee which practice had been non-existent (job security) or limited (factory committee) were rejected. These three considerations lead us to conclude that the success/failure of the labor reform was basically determined by the factors within the labor movement, while 242 being facilitated or obstructed by other factors such as the political opportunity
structure and the resistance of business.
The role of the strength of labor has been reflected not by the political power of the
labor movement, but by its capability to disturb the normal workings of labor
relations. Despite all the indications that Brazilian labor is weak (low union density,
low level of centralization, lack of link with the major political parties, the
insignificant role of labor in the democratic transition, the overall weakness of labor in
the work places vis-a-vis management), the mobilization of the workers in the key
economic sectors mostly affiliated with the CUT (especially the automobile industry and
the banking sector) had had a sufficient impact to disarray the corporatist labor system.
The fact that the Brazilian labor m ovement did not have link with the major political
parties, who would presumably have been unfavorable to the labor reform favored by the labor movement, ironically helped the labor movement to set the agenda of the reform. Lacking any significant pressure mechanism to control the labor movement, the major political parties simply accepted the agenda set by the labor movement. Moreover fragmentation of the ruling coalition and the lack of a hegemonic political force with a solid political program created a situation where social power of the labor movement could exert its influence on the process of reform independently of the dominant political power of the conservatives. While labor has lacked the power to impose its preferences on the political society, it had the power to decline the government-initiated reform proposal.
The second conclusion is that, despite the strong presence of the authoritarian elite in the government and Congress, the distribution of the political force, especially in the
CA, was not necessarily unfavorable to the expansion of labor rights. There existed solid progressive forces that promoted the expansion of labor rights. The political power of these progressives/leftists was more or less the same as the conservatives in the 243 Congress (CA) in terms of the number of supporters. The left and the center-left
constituted about a third of the members of the CA while the conservatives did not occupy
the majority position. As a result centrists/moderates played a key role in approving or
rejecting the proposed reform bill. This means that the strong presence of authoritarian
elite (the military, former supporters of the military regime in the Congress) was not a
major obstacle to the promotion of labor rights.
The fundamental role, however, was played by the progressives of the PMDB during
the CA. They are the ones that determined the scope of the reform through the
constitution. Their strategy and the perception of the interests of the working class
determined the concession on the provisions for job security to the conservatives and the
rejection of the factory committees and union pluralism. The progressive leadership of
the PMDB managed to induce centrists and moderates to support expanded rights of the workers through an adroit strategy. This strategy consisted of concentrating
progressives in the Subcommittee of Workers’ Rights, Committee of Social Order, and
Systematization Committee and neutralizing the pro-conservative centrists through the limited concession in the plenary session.
Third, contrary to the continuity thesis which sees nothing much different from the authoritarian regime and the new democracy, democratization brought new power resources to the labor movement. While authoritarianism maintained the functioning
Congress and regular elections with restrictions and manipulations, democracy brought a new dimension to pressure politics. It enabled the peak labor organization to be involved in heavy protests and lobbying activities without much restriction. The opening of communication channels made the position of Pazzianotto vulnerable to the opposition of labor and business. The absence of electoral manipulation made public pressure and protest a significant means of electoral pressure. The CUT poster accusing the members 244 of the conservative Centrao of being “traitors of the people” had a significant impact in
making some members of the Centrao desert the group.
Fourth, this study suggests that the fragmentation/cohesion of the ruling elite in the
new democracy, rather than transition type, could be a very significant factor in
determining the speed and scope of labor reform. Forces that formed the ruling coalition,
while being a majority in the Congress, had competed each other and had no clear
common program to pursue in labor issues. As a result, Pazzianotto played a double and
even contradictory role. Fie was the one who opposed and prevented state intervention in
the striking unions against the wishes of employers and conservatives ministers. At the
sam e time, his draft bills on the strike law were very similar to the authoritarian laws.
He was backed by the reform-minded leadership of the PMDB but at the same time had to
play along with the authoritarian rules of the gam e set by the military. Lacking firm support in the Congress for the government bill, his draft bills were simply left to die.
During the CA, the government had little influence on the labor reform. The design of labor reform was made by the DIAP, not by the government nor by the employers. At the subcommittee and committee level, the unions’ demands were accepted with only minor modifications. The coalition of the progressives and leftists was the fundamental cause of the labor success in the CA. During the process of making the strike law of 1989, the government again had little influence. Two distinct political institutions, the government and the Congress, were not integrated by the strong, homogeneous cohesive political force. The difference in the political institutions (the government and the Congress) yielded contrasting results. The government-initiated reforms during 1985-87 were declined by both labor and business, while the CA became the main battle field for both labor and business. At least in regard to labor issues this parallel power structure yielded better results for labor. The political power of the authoritarian elites in the core of the government was not matched in the Congress. The progressives in the 245 Congress, while working under all the constrictions of the authoritarian elements of the
new regime, were able to compete with the conservative forces dispersed all over the
political system .
Actually this lack of a hegemonic political force has a significant implication with
regard to the institutional framework of political power. According to Mainwaring
(1992), the combination of presidentialism and a multiparty system has created
problems for democratic stability in the democratic periods of the Brazilian political
history. When the president lacks stable congressional support in the fragmented multiparty system, the result has been executive/legislative stalemate and the political immobilism. The reform initiated by the government during the 1985-87 period reflects this curious weakness of the Executive power in the Brazilian multiparty system. Facing the opposition of labor and business organizations, the Congress simply declined to take up the measure. Major reform was achieved only through the CA and the
Congress where progressives had some leverage to mobilize the support of the centrists.
The labor movement took advantage of the fragmented political power of the conservatives, which resulted from the institutional weakness of the government vis-a- vis the Congress. Ironically the politically weak labor m ovem ent was able to draw maximum rights and benefits from the fragmented political system.
THE LIMITS OF THE LABOR REFORM
Despite the success of the liberal labor reform, there were some areas where reform has failed. The government-initiated reform of the union structure, which intended to install union pluralism with the support of the CUT, failed due to the united opposition of the conservative wing of the labor movement and the employers organizations. In the CA, 246 the corporatist union structure was maintained. Some of the old demands of labor such as
job security and the 40 hour work week failed to enlist the support of the centrists.
Two major sources of the limits of the reform were the divisions within the labor
movement and the strength of the conservative forces in the government and the
Congress. First, the maintenance of the corporatist framework was possible due to the
division of labor on the issue of union structure. The fact that conservative wing of the
employers tried to maintain corporatist structure is of a secondary importance because
the C sntrao’s original draft did not support the single union principle among the labor
unions. The division of labor on the union structure reflects the limit of the rank and file
based, combative “new unionism” in penetrating the Brazilian labor unions.
As was examined in Chapter 3, the strength of the radical unionism that has
supported union pluralism lied in the big unions in the most advanced sectors of the economy. Many small and medium sized unions in traditional sectors had the problem of financial independence without the state-guaranteed union tax. Federations and confederations of the official union structure were based on the support of these unions.
While the CUT have drained the legitimacy and influence of the federations and confederations of the official union structure, their voice was maintained by the fact that majority of the unions were outside the influence of the radical unionism. Moreover, the government needed the support of moderate unionism in the social pact and the wage policy. Despite the hegemonic force of radical unionism in the key economic sectors, the official unionism maintained its status as a legitimate interlocutor of the new government. The moderate unionism of the CGT (CONCLAT during 1983-86) was based on the support of the communist factions and some of thepelegos that went along with the new trend in the labor movement. They wanted to maintain an institutional link with the state and tried to exert their influence through the official channels that guaranteed their exclusive representativeness. 247 The legacy of 50 years of corporatism ran strong not only among moderate unionism
but also the progressives in the PMDB. While the PMDB, the largest party, did not have
any direct influence on the labor movement, they exerted a indirect influence by
refusing to support the reform desired by radical unionism. When the conservative
labor and business leaders lobbied against the ratification of the ILO Convention 87, the
leadership of the PMDB went along with them. In the CA, the leaders of the PMDB were
inclined to accept the discourse of the moderate unionism. Union pluralism had only the
support of the PT and liberal employers of the PL. Part of the problem was that the
moral and theoretical appeal of union pluralism was not universal. The cause of the unity
of labor, while simply rhetoric in the face of competing factions of the labor movement,
had weighed heavily against the discourse of pluralism. Even the CUT leaders, who had
been criticized as generating political and economic instability in the democratic regime,
had to adapt their discourse in a way to support labor unity. Moreover, the fact that the
government intention in installing union pluralism was to weaken the labor movement
provided additional reason why the single union principle need to be preserved.
Second, the constraints imposed on the reform by the continued strength of conservative elites, which reflects the Brazilian type of democratization, was not significant except that they initiated the restrictive measures on the right to strike.
Even the most significant role came indirectly. Job security was compromised in a way to accommodate the demands of the Centrao. The major reason was the fear of a revolt of the employers that could ally with the military. The rumor of military intervention was widespread, whether or not real, due to discontent toward and repeated attacks on the CA by Sarney and the military ministers. While employers were less prepared and effective in lobbying the Congress, the excessive alienation of business in a capitalist society was potentially dangerous. It could have triggered not only the radicalization of the conservatives and the isolation of the progressives in the basically moderate CA, but also 248 the creation of a potentially dangerous political situation where the institutional impasse
in the CA (created by the confrontation between the CentrSo and the PMDB leadership)
could endanger the democratic functioning of the CA. Contrary to the argument of the
continuity thesis, strong presence of the conservative elites, especially the military at
the center of power in the new regime, has not been a major obstacle to the labor
reform. When the discontent of the employers and conservative politicians was
mounting, however, it exercised critical influence by narrowing the choice of the PMDB
leadership.
COMPARATIVE IMPLICATIONS OF THE BRAZILIAN LABOR REFORM
The Brazilian experience of labor reform provides some interesting perspectives on the possibilities and limits of labor reform in a new democracy. First, Brazilian case indicates that the type of democratic transition may not be a significant factor in determining possibilities and limits of the labor reform. This apparently contradicts the case of Korea where the elite-controlled democratic transition in Korea did not result in any significant labor reform. However, two major differences can explain the differences with the Korean case. First, in contrast with the fragmented ruling coalition in Brazil, the Korean president was in control of the Congress except for a short period during which ruling party lost the majority position in the Congress. President is at the center of power owing to his power to appoint the party candidate in the general election. As a result, party discipline is strong in Korea. Thus president ensures the institutional integrity and cohesion. As a result, the decisions made by the president in almost all cases had been supported by the ruling party and the Congress. Moreover, the
Korean opposition parties are basically conservative in nature under the historical circumstances of confrontation with communist North Korea. There is no real socialist 249 party or labor party in Korea. The labor reform was not a high priority to the
conservative opposition parties in Korea. Second, labor mobilization in Korea exploded
suddenly after the acceptance of the direct presidential election by the ruling
authoritarian elites in June 1987. Defiant labor movement began to organize itself only
with the expanded political space created by the concession of the authoritarian elite.
Contrary to the Brazilian case, the Korean labor movement had to spend their energy and
time debating the correct strategy and in establishing labor organizations only after the
transition rather than several years before as in Brazil. While radical unionism was
able to take root in the Korean labor movement, it was small in numbers and vulnerable
to repression due to the ideological hegemony of the anti-leftist state. The national
organization of the radical unionism is still illegal and their leaders have been jailed
frequently. These two factors, the strong cohesive conservative political force and weak
and nascent independent labor movement led to a political opportunity structure where
the government had the power to dictate the direction and scope of the labor reform. 1
Second, the strength of the labor movement (measured by the union density, the
linkage with the political parties, the role of the state, the centralization of the union
movement) may not be sufficient to explain the success and failure of the labor reform
favored by the labor movement. While Brazilian labor is weak by the above standards, it was able to veto the government-initiated labor reform. The strong labor of Argentina was able to reject the government bill (of the Radical Party) on the “Law of Union
Reorganization” in 1984 (designed to weaken the influence of the Peronist union leaders) by the support of the Peronist party. The bill failed in the Senate though only by a slim margin. 2 Though lacking political power in the Congress comparable to that
1 For brief introduction of labor movement during the transition period in Korea see Ogle (1990) and Kim (1994).
2 For the relations between the Radical government of president Alfonsin and Peronist labor movement of Argentina, see Thompson (1988a, 1988b) Gaudio and Thompson ( 1 9 9 0 ) . 250 of the labor m ovement in Argentina, Brazilian labor was able to veto the government
initiative to impose the restrictive strike law by protests, lobbying, and defiance. The
reason why government-initiated reform failed in Brazil consists in the fact that the
government was not in control of the Congress.
Third, the Brazilian case represents the case of labor reform in a segm ented political
system in which each power group can exert a certain amount of influence in preserving
their status and power resources while not being able to control whole political process.
The military had veto power based on the control of the repressive state apparatus and
the maintenance of institutional privileges, but it could not impose its version of strike
bill through the Congress. The traditional political elites survived or even thrived in
the new democracy due to the elite-controlled transition. They can withdraw crucial
support for the president unless the president provides them with patronage. They also
failed to impose their version of labor law due to the lack of a majority position in the
Congress. “Economic power” of business could not do better than the defiant labor
movement nor control the Congress despite its larger representation. Labor joined this system by developing independent power resources based on the mobilization of the workers and the reshaping of the bargaining practices. Labor developed the capability to disrupt production and services in the most crucial sectors of the economy and the government (automobile, petroleum, loading and unloading in the ports, banks, government employees, social workers, and teachers). Based on this disruptive capability, while lacking active political power through political parties, labor accumulated a sort of passive political power.
In Brazil each segment of society came to develop their own way of coping with the changing political and social environment. This segmentation of the influence of the political and social actors prevented sweeping reform across the board, but at the same time, those forces who occupied one of those segments could claim and achieve their 251 basic demands on the basis of the power resources of the group or class. The seemingly contradictory power structure in Brazil (witnessed by continued military power and
privileges, the strength of conservative politicians, the emergence of a militant labor movement and the apparent inability of the government to control labor mobilization, the unexpected strength of the PMDB progressives in determining the scope of the labor reform, and the strength of the conservative wing of the labor movement and employers’ organizations to hold on to the old system of representation) may be understood better through the concept of the segmentation of the political and social power based on different kind of power resources than through the conceptual scheme provided by the continuity thesis.
Finally, the Brazilian experience of labor reform reveals the limits of the elite- focused study of the democratic transition (and possibly of the democratic consolidation). The pattern of political interactions in the politics of labor reform was not dictated by the conservative political elites which have been the focal point of the study of democratic transition in Brazil. On the contrary the social actors showed surprising resilience in resisting government-initiated reform measures. Political power of the conservatives in the government, whose strength remained intact even after the transition, turned out to be insufficient in guiding the political life of the new democracy. The emergence of combative labor movement in the civil society accompanying the changing socio-economic structure and its social power to transform the labor relations through the mobilization of the working class was the fundamental factor that shaped the political process of labor reform in post-transition Brazil. BIBLIOGRAPHY
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