Brazil wants to restrict strikes in public sector

* Rousseff decides to act after crippling stoppages

* Unions vow to fight curbs on their right to strike

* Civil servants seen as lazy, overpaid

By Anthony Boadle and Alonso Soto

BRASILIA, Oct 5 (Reuters) - President Dilma Rousseff wants to regulate strikes by public workers after a series of walkouts by civil servants in recent months paralyzed public services across Brazil.

But the plans, in proposals that could soon be presented to Congress, are drawing fire from unions and labor activists - a constituency that helped put Rousseff into office and that long has formed the bedrock of the ruling Workers' Party.

The strikes that started in May by civil servants, ranging from university professors to customs and health inspectors to Brazil's federal police force, so crippled public services that Rousseff wants to better define who can strike and when, and establish collective-bargaining mechanisms to head off future stoppages.

"The 1988 Constitution guarantees the right to strike, but no law was adopted to implement that right," said Sergio Mendonca, the civil service labor relations secretary, in an interview. "We're not just going to consider strikes but also dialogue, because the government is not shutting out dialogue."

The plan has angered union bosses, who accuse the president of turning her back on the labor movement that helped put the leftist Workers' Party in power in 2003.

"Our agenda is being overlooked in favor of the agenda of the business class," said Vagner Freitas de Moraes, head of CUT, an umbrella group that represents over 7 million union workers, including 770,000 federal government employees.

"President Dilma should watch out for the interests of the working class, especially those sectors of the working class that provided the political support for her to come to office," Moraes told Reuters.

CRIPPLING WAVE OF WALKOUTS

The four-month wave of strikes at universities and gradually crippled other federal offices, including the central bank, the tax-collection office and the national statistics agency. Brazil's already congested airports and ports faced greater delays, medicine imports stalled and fertilizer supplies crucial to grain exports sat for weeks off-shore on ships waiting to dock.

Mendonca said police and other armed forces could have their right to strike restricted by the government's plans, possibly requiring them to hand over their weapons when they walk out.

While details are still being worked out, Mendonca said the new regulations will establish which workers can strike, as well as when and how, so that their stoppages do not hurt the public interest. Health workers, for example, might be required to always have a skeleton staff on duty so urgent care is not disrupted.

In a tense moment during the recent stoppages, striking policemen clashed with military police outside the president's office and were dispersed with tear gas. Protesters erected barricades outside ministry buildings.

Unions are particularly miffed at Rousseff because her predecessor and mentor, former President Luiz Inacio Lula da Silva, built the Workers' Party around his past as a labor leader and icon of the country's massive working class.

BOOM TIMES OVER

Things have changed since Lula was in office, though.

During his eight-year administration, Brazil's economy - buoyed by a global commodities boom - grew by an annual average of more than 4 percent. Soaring tax revenues enabled Lula to grant generous pay hikes, nearly tripling the federal payroll and using up funds that critics said should have been invested instead in Brazil's dilapidated infrastructure and other economic bottlenecks.

But Rousseff, Lula's hand-picked successor, has had to shift course. As the commodities boom eased and Europe's debt crisis led to a global slowdown, Brazil's economy has stagnated.

Rousseff rejected pay rises sought by the unions totaling 98 billion reais ($49 billion).

"The scenario had changed," Mendonca said. "It was unreasonable for the unions to make pay demands as high as they had done 10 years before."

Rousseff made the unions a take-it-or-leave-it offer of 15.8 percent over three years, just enough to keep up with inflation.

With little public sympathy for their cause, most strikers accepted the offer and went back to work, except for tax inspectors and federal police officers, who are holding out for pay hikes of more than 100 percent.

Brazilians are likely to back Rousseff in any effort to regulate strike action by government employees.

Even before the recent protests, civil servants were deemed by most in Brazil to enjoy salaries, pensions, job security and other benefits far superior to many workers in the private sector. Demand for their jobs is such that tens of thousands of applicants exist for every opening.

Several proposals to reform Brazil's decades-old labor laws have been gathering dust in Congress for years, opposed by the unions and blocked by legislators who represent them.

But after the recent disruptions to public services drew widespread condemnation from citizens, the government is confident it now has the political capital to pass a bill regulating labor relations with civil servants.

However much unions protest this time, they are unlikely to win enough public support to derail Rousseff's efforts.

"Brazilians have an image of the civil servant as someone who works little and earns a lot," said André Cesar, a political consultant with Prospectiva, a public policy think tank in Brasília, the capital. "These strikes reinforced that view."