Relevant Amendments to the Portuguese Labour Code

Relevant Amendments to the Portuguese Labour Code

EA BriefEmployment and Labour Law

16 September, 2019

It was published, on September 4, the Law No. 93/2019, which brings significant changes to employment legislation, namely as regards the probationary employment period, fixed-term employment contracts, temporary employment contracts, the bank of hours scheme, among others.

This law amends the Labour Code, approved by Law No. 7/2009 of 12 February, and its regulations, and the Code of Contributory Regimes of the Social Security Welfare System, approved by Law No. 110/2009, September 16th.

Below, we will make a brief analysis of the main changes to the Labour Code, brought by Law No. 93/2019, of 04/09:

• The fixed-term employment contract justified by a new activity of uncertain duration or the commencement of a company or establishment is now restricted to companies with less than 250 employees;
• To be looking for a first job as well as being a long-term unemployed person will no longer be a justification for the employer to celebrate a fixed-term employment contract;
• The maximum duration of a fixed-term employment contract will be two years;
• Fixed-term employment contracts may be renewed up to three times but the total duration of renewals may not exceed the initial period of the contract;
• The uncertain term employment contract may only have a maximum duration of four years;
• A very short-term employment contract can now be entered into when there is an exceptional and substantial increase in business activity whose annual cycle has irregularities arising from the market or arising from its structural nature that cannot be guaranteed by a permanent structure;
• An employer who, in the same calendar year, has an annual percentage of fixed-term employment contracts higher than the annual indicator applicable to the respective sector of activity, will be subject to additional contribution to Social Security for excessive turnover;
• Employees with cancer disease are now covered by the general principles of employment protection for employees with disabilities or chronic illness;
• In indefinite employment contracts, the probationary employment period is now 180 days for employees looking for a first job or in a situation of long-term unemployment;
• The subsequent conclusion of an employment contract with the professional internship granting entity for the same activity, determines the reduction or exclusion of the probationary employment period;
• Each employee is entitled to continuous professional training of 40 hours per year;
• The employer’s duty to avoid harassment of the employee is reinforced. The breach of this duty by the employer gives the employee the right to terminate the employment contract for just cause;
• A disciplinary sanction is abusive if it is motivated by the fact that the employee claimed to be a victim of harassment or to be a witness in a judicial and / or administrative harassment process;
• The individual bank of hours scheme is eliminated, and a new group bank of hours scheme is introduced;
• The intermittent employment contract regime as well as the temporary employment contract regime undergo changes;
• Extension of the time limits for the procedure of dismissal as a result of the dissolution of the job;
• Collective labour law has also been subject to changes, particularly as regards the structures of collective representation of workers (trade unions and employers’ associations); collective labour regulation instruments (collective agreements, arbitration and ordinance of extension).

Law No. 93/2019, of September 4, enters into force on October 1, 2019, with the following exceptions:

• The new rules apply to employment contracts entered into before 1 October 2019, except for the conditions of validity and the effects of situations prior to that date;
• For fixed-term contracts and temporary contracts concluded prior to the entry into force of this law, the new rules on the admissibility, renewal and duration of contracts are not applicable;
• The bank of hours scheme that is in force on the date of entry into force of this law shall cease until October 1, 2020;
• The provisions of a collective labour regulation instrument contrary to mandatory Labour Code rules should be amended in the first review that takes place by October 1, 2020, under penalty of nullity.