Investor's Guide - Labour System

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Portuguese Labour System




In recent years, Portuguese employment law has undergone many changes and adjustments. Thus, after more than 30 years of legislative reforms, the Portuguese labour system is now more flexible, particularly in terms of organizing working time.


In terms of regulations, the main law is the Labour Code, which was revised in 2009 (Law No. 7/2009 of February 12), 2011 (Law N. 53/2011 of October 13), 2012 (Law No. 23/2012 of June 25), 2013 (Law No. 69/2013 of August 30), 2014 (Law No. 27/2014 of May 8 and Law No. 55/2014 of August 25), 2015 (Law No. 28/2015 of April 14 and Law No. 120/2015 of September 1 ), 2016 (Law No. 8/2016 of April 1), and 2019 (Law No. 93/2019, of September 4).


Law no. 93/2019, of September 4, which entered into force on October 1, 2019, introduced important changes to the Labour Code and its Regulations, as well as to the Code of Contributory Regime of the Social Security System and its regulations.

There are also regulations that, along with the aforementioned law, govern work activities. Among these, it is important to highlight the collective labour regulations, the most common form being the collective bargaining agreement (CBA), an agreement between labour unions and employer associations, which regulates the activities of the sectors in question.


With regard to collective bargaining, Law no. 93/2019 introduced some relevant changes, and the provisions of collective bargaining agreements contrary to the mandatory standards of the Labour Code must be modified in the first review that takes place within 12 months of the entry into force of the legislative changes made, becoming invalid if they are not.


Collective bargaining instruments may now regulate the payment of overtime only in the most favourable sense to the employee, that is, provided that such provide for the payment with an increase equal to or higher than that provided for in the Labour Code (25% for the first hour or fraction thereof; 37.5% per hour or fraction thereof, on a working day; 50% for each hour or fraction thereof, on a weekly, mandatory or complementary rest day, or on a holiday).


It is now provided that, in case of extinction of the trade union association or employers in the validity of the collective agreements it has entered into, these expire, but the effects that would remain in case of termination remain. Such expiration shall not occur if it is demonstrated that the extinction of the union association or employers occurred in a voluntary manner in order to obtain the termination of the collective agreements granted.


Moreover, a party wishing to terminate a collective agreement (that is to say, to terminate its validity) is now required to provide a statement of reasons regarding the economic, structural or maladjustment of such collective agreement.


The "survival" period of the collective agreement (i.e., the period during which the collective agreement remains in force after an eventual termination), whose maximum limit was 18 months, can now be extended to another 4 months by specific arbitration to be requested by any of the parties (this change is dependent on the entry into force of legislation regulating the matter).


Finally, as regards the provisions on parenthood and safety and health at work, they are now included in the list of the effects of the expired collective agreement that last until the entry into force of another that replaces it (and which already included matters relating to pay, the professional category and its definition and the duration of working time).


Law no. 8/2016, of April 1, restored the national holidays of the Corpus Christi, the Implantation of the Republic, on October 5, All Saints' Day, on November 1, and the Restoration of Independence, on December 1.


Finally, a brief reference should be made to Laws 90/2019 and 93/2019 of September 4, which made an important change to the system of parenthood.


Two new leaves were created, one for employees residing in the Azores and Madeira, allowing them to travel from the hospital unit located outside the island of residence to childbirth (lasting for the entire period considered necessary and appropriate to travel), and another for the provision of assistance to children with cancer (for a period of 6 months, extendable to 4 years).


The initial parental leave was extended in cases of child hospitalization (extending the leave up to a maximum of 30 days) and in cases of childbirth up to and including 33 weeks (extending the leave up to a maximum of 30 days, or for the entire period of hospitalization in case of need of special medical care for the child).


The father's exclusive parental leave has also been changed to the following:


      ·      20 working days, consecutive or interpolated, of compulsory use within six weeks of the birth, five of which are taken consecutively immediately after it;

      ·      working days, consecutive or interpolated, of optional use, provided that this occurs at the same time as the initial parental leave taken by the mother.


Adoption leave has been extended to children under the age of 15, and the same period as for initial parental leave is now possible to be taken.

New leaves have been created for:


a) Autonomous regions inter-island travels of a pregnant employee, an employee who has recently given birth or is breastfeeding, which also includes the person accompanying the employee;

b) Medically Assisted Procreation (MPA) Consultation - grants three leaves for consultations within each MPA treatment cycle;

c)  These leaves do not determine the loss of any rights, being remunerated and considered as effective work.


The termination of the employment contract of a pregnant employee, an employee who has recently given birth or is breastfeeding, or a employee on parental leave, during the trial period, must now be communicated by the employer to CITE, within 5 working days of the date of termination.


On the other hand, the non-renewal of a fixed-term employment contract of an employee on parental leave is now compulsorily communicated by the employer to CITE, at least 5 working days prior to the date of notice.

In this chapter the most significant aspects of Portuguese labour law for business investment are described below.


1. Employment Contract

1.1. Employment Contract - Concept and Preparation

1.2. Trial Period

1.3. Professional Training

1.4. Types of Employment Contract

  1.5. Additional Contribution for Excessive Rotation

1.6. Labour Contract under Service Commission Regime

    1.7. Lay-off: Reduction of activity or suspension of the labour contracts

    1.8. Termination of Employment Contract

2. Remuneration

2.1. General rules on remuneration

2.2. Defining the salary’s amount

2.3. Guaranteed Monthly Minimum Wage

3. Working Hours 

4. Holidays, Vacations and Absences

4.1. Holidays

4.2. Vacations

4.3. Absences

5. Collective Representation, Strikes and Lock-outs

5.1. Collective Representation

5.2. Strikes

5.3. Lock-out

6. Specifics of Employment Contracts for Foreigners

7. Visas and Residency Permits for Foreigners

7.1. Visas

7.2. Residence Permit

7.3. Long-Term Resident Status

7.4. Golden Residence Permit Programme




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