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Petrobras Raises Salary Adjustment Proposal from 1% of the National Consumer Price Index (INPC) to 70% of the INPC
On Monday, August 26, Petrobras announced that it has filed a request for mediation with the Superior Labor Court (TST) to try to reach a negotiated solution for the closure of the Collective Labor Agreement (ACT) for the period 2019-2020. Meanwhile, the ANP stated that Petrobras and 11 foreign companies are already participating in the auction of the 16th Round of bidding for 36 exploratory oil and gas blocks
“The decision was made by the company after attempts to reach an agreement in negotiations with union leaders were exhausted,” the company said in a statement.
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Petrobras stated that it brought forward the start of discussions to May, aiming to ensure the best conditions for dialogue between the parties, and that more than 20 meetings were held with union leaders.
The salary negotiations have lasted more than three months, and Petrobras presented its final proposal on August 8, with a deadline of 15 days for unions to consult their members and return with a response.
The new proposal was raised from 1% of the National Consumer Price Index (INPC) to 70% of the accumulated INPC from September 1, 2018 to August 31, 2019, according to the advisory.
“The company has full confidence that the decision to seek mediation from the TST is the right one to make at this moment, aiming to avoid strikes and shutdowns that may harm its operations and the population in general,” the company said, highlighting that, since 1995, Petrobras has granted salary adjustments that represent a cumulative real gain of 40% above inflation.
“However, it is no longer possible to make decisions without considering the potential risks they pose to the recovery and competitiveness of the company,” the company said, which has been selling assets and cutting costs in an effort to reduce its debt of over 100 billion dollars.
“Petrobras has been reversing the severe crisis scenario of 2014-2015, but is still far from the performance that would allow it to compete on equal terms with its main competitors, which requires determination in pursuing its goals.”
Petrobras also stated that one day after the end of the assemblies of the FNP and the Unified Federation of Oil Workers (FUP), on August 31, the legal validity of the ACT will expire, “with a legal provision that prevents the company from maintaining current practices without a new agreement.”
The Unified Federation of Oil Workers (FUP), which represents most of the category, stated in a note on its website that “the company insists on a downgraded Collective Agreement proposal that removes important rights… and offers a salary adjustment that does not even cover the inflation of the period.”
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