Portugal: Decent Work Agenda

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TOPIC

CHANGE

1.1. Compensation for expiry of employment contract

For fixed-term contracts, the compensation is equal to 18 days of base salary and length of service payments for each full year of service.

For contracts of indefinite duration, the compensation is equivalent to 18 days of base salary and length of service payments for each full year of service in the first three years of the contract, and 12 days of base salary and length of service payments for each full year of service in the subsequent years.

In both cases, the amount of compensation is 24 days of basic salary and length of service payments for each full year of service.

1.2. Successive fixed‑term contracts of employment

The termination of a fixed-term contract of employment prevents the employee from being re-hired or re-assigned under a fixed-term or temporary employment contract for the same job or under a service contract for the same purpose.

The concept of successive contracts is no longer limited to the same job. It is extended to the same professional activity in the case of a new fixed-term or temporary employment contract and to the same activity in the case of a service contract.

This extension of the concept of successive contracts may give rise to problems of interpretation if the new contract for the same activity is unrelated to the previous contract.

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CURRENT LEGISLATION

CHANGE

2.1. Internship allowance

The monthly internship allowance cannot be less than the Social Support Index (SSI), which is currently EUR 480.43.

The monthly internship allowance cannot be less than 80% of the guaranteed minimum monthly salary, which is currently EUR 608.00.

2.2. Insurance

The company providing the internship must take out personal accident insurance.

The company providing the traineeship is obliged to take out insurance against accidents at work.

2.3. Social Security contributions

The professional internship is not covered by compulsory social security arrangements, except for special schemes.

The professional internship is considered as employment for the purposes of social security contributions.

2.4. Probationary period of an employment contract following a professional internship

The trial period is reduced or excluded depending on whether the duration of the professional internship for the same activity was less than, equal to or greater than the duration of the professional internship, provided that it was concluded with the same employer.

The trial period is further reduced in the case of a professional internship with a positive evaluation, for the same activity and with a different employer, of 90 days or more during the previous 12 months.

This last provision raises doubts as to its interpretation in cases where the employer has no knowledge of the previous internship, the context in which it took place or even the evaluation given for it.

TOPIC

CURRENT LEGISLATION

CHANGE

3.1. Invalidity of a contract concluded by a temporary employment agency that is not authorised to carry out its activities

The work is considered to be provided to the temporary employment agency under an employment contract of indefinite duration

The work is now considered to be provided to the user undertaking under an employment contract of indefinite duration.

This amendment thus places the responsibility on the user undertaking to ensure that the temporary employment agencies it uses comply with their legal requirements and obligations.

3.2. Successive contracts for use of temporary workers

Once the maximum duration of a contract for the use of temporary workers has been reached, it is forbidden for a temporary or fixed-term worker to succeed to the same post before the expiry of a period equal to one third of the duration of the contract, including extensions.

Any breach of this rule constitutes a serious administrative offence.

The concept of successive temporary employment contracts will no longer correspond to the same job, but will be extended to the same professional activity and, in the case of service contracts, to the same object or activity. In addition, the prohibition will be extended to contracts concluded with a company that has a controlling or group relationship with the employer or that has common organisational structures with the employer

If this rule is breached, the contract is converted into an employment contract of indefinite duration with the user, and all the time worked for the user under successive contracts counts towards the employee's length of service.

These amendments raise doubts about the interpretation of situations in which the user is not aware of the previous contract, as well as about the legitimacy of the exchange of information between different companies.

3.3. Maximum duration of successive temporary work contracts in different users

The duration of a temporary employment contract may not exceed the duration of the user contract.

Without prejudice to the existing limit, the duration of successive temporary employment contracts in different user companies, concluded with the same employer or an company with which it has a controlling or group relationship or which has common organisational structures, may not exceed four years.

If a temporary employment contract exceeds this limit, it is converted into an employment contract without a fixed term for temporary assignment.