In a statement distributed to the company's employees, the works council said that the accord runs from 1 October this year to 30 September next. As well as the pay rises it foresees the conversion of temporary contracts into permanent ones "based on the market situation and domestic indicators, as is current company practice."


The document, which is to be made public next week, if approved in meetings of workers scheduled for 19 November, also maintains performance bonuses, which are paid in March and December, and guarantees that Autoeuropa employees will continue to get 25 days of leave each year, despite a change in the law this year that reduced the legal minimum to 22.


Despite fines and other costs that VW may face due to fraud relating to emissions of polluting gases, the group has said it is maintaining plans for investment already underway at the Palmela factory, which could reach €677 million. These are aimed at developing the plant's capacity to produce various VW models, with the assignment of a new vehicle to Autoeuropa some time in mid-2017.


Autoeuropa is Portugal's largest single exporter, accounting for around one tenth of the country's goods exports.