Employment Law in Portugal

The Portuguese Constitution contains relatively detailed provisions on employment and labour issues, giving workers rights and protections in areas such as dismissal, pay, working hours, rest, health and safety, pregnancy and parenthood, non-discrimination, workplace representation, trade union membership and activity, and strikes. Building on these provisions, a single item of legislation, the Labour Code (Código do Trabalho, Law no. 7/2009) — originally adopted in 2009 and amended on various occasions since — governs almost all aspects of employment relationships, both individual and collective. At the time of writing (October 2022), government proposals to amend the Labour Code substantially in areas such as normal working hours, overtime payments, annual leave, work-life balance and dismissal are under consideration in parliament. Case law interprets the Labour Code. Health and safety is dealt with mainly by Law no. 102/2009 and social security benefits (eg for sickness and parenthood) by Law no. 4/2007.

Collective agreements (mainly at industry level) play an important role in regulating employment, setting pay and conditions for around eight out of 10 employees. The Labour Code includes collective agreements under the category of “collective labour-regulation instruments” (instrumentos de regulamentação colectiva de trabalho, IRCTs), alongside “adhesion agreements” (whereby employers or trade unions sign up to an existing collective agreement), extension ordinances and working conditions ordinances issued by the Government, and arbitration decisions (see Collective bargaining and collective agreements). For simplicity, when we refer in this topic to the regulation of employment matters by collective agreements (which are by far the most common form of IRCT), this usually covers other IRCTs as well.

Other important sources of law are individual employment contracts and internal company rules.

Collective agreements may generally deviate from statutory rules, but such deviations must be more favourable for the employee. Employment contacts may deviate from the provisions of an applicable collective agreement only where this is more advantageous for the employee.

This topic refers to employment law in the private sector only.

• An employer cannot require job applicants to provide information about their private life, state of health or pregnancy status, or oblige them to undergo medical examination. Recruitment and Selection

• Unless the parties agree otherwise, a probationary period is obligatory at the beginning of the employment relationship, generally lasting 90 days, but as long as 240 days for groups such as senior managers. Recruitment and Selection

• With the exception of citizens of other EEA countries (plus Switzerland), foreign nationals generally require a work visa or residency permit in order to work in Portugal. Recruitment and Selection

• An employment contract is defined as an agreement whereby a person undertakes, in return for remuneration, to provide work for another party, within the scope of latter’s organisation and under their authority. Employment Contracts

• Indefinite-term contracts for full-time work on the employer’ premises need not be in writing but almost all other types of contracts must be written and, even where there is no written contract, the employer must inform the employee in writing about all relevant aspects of their contract. Employment Contracts

• Fixed-term employment contracts may be used only in specified circumstances, and their duration and renewal are subject to statutory limits. Employment Contracts

• The employer has a statutory duty to pay punctually remuneration that is fair and adequate for the work: wages must be paid by bank transfer, cheque or postal order, on a weekly, fortnightly or monthly basis, accompanied by a payslip. Pay and Benefits

• A statutory national minimum wage applies to almost all employees. Pay and Benefits

• Employees are entitled to receive a Christmas bonus worth one month’s pay. Pay and Benefits

• As a general rule, employees’ normal working time must not exceed eight hours per day and 40 hours per week, but there are a number of exceptions and permitted flexibility arrangements. Working Time, Rest and Holidays

• There are limits on the amount of overtime employees may work (eg 175 hours per year for full-time employees of employers with fewer than 50 employees) and overtime attracts a statutory pay supplement of 25% for the first hour of overtime per day and 37.5% for subsequent hours. Working Time, Rest and Holidays

• Employees must generally be granted a rest break of at least an hour if they work more than five hours, and are entitled to a daily rest period of at least 11 hours and a weekly rest period of at least 35 hours, usually including Sunday. Working Time, Rest and Holidays

• Employees are entitled to at least 22 working days of annual leave per year, during which they receive double pay. Working Time, Rest and Holidays

• Working parents are between them entitled to 120 or 150 days of “initial parental leave” in respect of the birth of their child (the duration depends on whether the parents choose to receive a social security benefit set at 100% or 80% of pay): this includes at least 42 days of maternity leave reserved for the mother, while fathers are obliged to take 20 working days of paternity leave. Parenthood and Work-life Balance

• Employees are entitled, where relevant, to take adoption leave, supplementary parental leave, childcare leave, leave of absence to care for a sick child or grandchild, leave to care for a child with a disability or chronic illness, and leave of absence to provide essential and urgent care to a spouse, partner or close relative — social security benefits are often payable during such leave. Parenthood and Work-life Balance

• Discrimination in relation to employment is prohibited on grounds including sex, ethnic origin or race, age, disability, sexual orientation, ancestry, social origins or circumstances, civil status, family situation, economic situation, education, genetic inheritance, reduced working capacity, chronic illness, nationality, place of origin, language, gender identity, religion, political or ideological convictions, and trade union membership. Equality and Discrimination

• The employer has a statutory duty to prevent harassment and sexual harassment, and employers with seven or more employees must adopt a code of good conduct on preventing and combating such harassment. Equality and Discrimination

• Employees have the right to form and join trade unions and are protected from discrimination in on grounds of union membership, and trade unions have various rights to representation at company level. Industrial Relations and Collective Rights

• Over 80% of the workforce is covered by collective agreements. Trade union organisations at all levels have a right to negotiate collective agreements and employers must observe a mandatory collective bargaining procedure. Industrial Relations and Collective Rights

• Employees in all companies have a right to elect a workers’ committee, with a range of information, consultation and participation rights. Industrial Relations and Collective Rights

• Employers have a general statutory duty to provide good working conditions, in both physical and psychological terms, and have numerous detailed obligations in this area, while employees also have various duties. Occupational Health and Safety

• Employees in companies and establishments of all sizes are entitled to elect health and safety representatives. Occupational Health and Safety

• An employer may dismiss an employee only with “just cause”, which includes: summary dismissal for reasons attributable to the employee (ie misconduct); and dismissal with notice because of individual or collective redundancy or because of the employee’s inability to adapt. Termination of Employment

• Before dismissing an employee, the employer must follow a detailed procedure involving the employee and employee representatives. Termination of Employment

• When dismissing an employee with notice, the employer must observe a statutory notice period and pay compensation. Termination of Employment

• Employers must ensure that at least 10% of their employees receive continuing vocational training each year, while employees have a right to receive at least 40 hours of training per year and to take unpaid training leave. Other key issues

• Telework normally requires an agreement between the employer and employee but employees have a right to telework in certain cases. Other key issues