European Restructuring Monitor (ERM)
Eurofound's ERM database on restructuring-related legal regulations provides information on regulations in the Member States of the European Union and Norway which are explicitly or implicitly linked to anticipating and managing change.
Labour code, article 336; Decree-Law 59/2015 of 21 de April, amended by Law 71/2018 of 31 December - whole document
The Labour Code in its article 336 determines the Wage Guarantee Fund (Fundo de Garantia Salarial - FGS). A new system for the FGS was approved in 2015: the fund ensures the financial protection of employees in case of the employer’s insolvency (defined as a debtor’s inability to meet his commitments as they fall due - article 3 of CIRE ) or of the employer’s coverage by the revitalisation special process or by a procedure for extrajudicial recovery (in order to recover companies which are in a difficult economical situation or in imminent insolvency, but not in a current insolvency situation, a special revitalisation procedure has been created which allows the company to establish negotiations with its creditors to reach agreement on the recovery of the company. During this period, any pending judicial proceedings will be suspended). The fund guarantees the payment of wages, holidays, Christmas and food allowances and redundancy compensation.
The fund ensures the payment of labour credits due to workers since the six months preceding the start of the insolvency procedure, of the Extrajudicial Recovery Procedure (Regime Extrajudicial de Recuperação de Empresas - RERE), or the submission of the application to Special Revitalisation Process (Processo Especial de Revitalização - PER).
The payment of the claims referred to above is subject to a double limitation:
Under the new regime, the fund now also covers employees who work or have habitually worked within the national territory for an employer with activities in the territories of at least two EU Member States, even if the employer is declared insolvent by a tribunal or competent authority of another Member State of the European Union or of the European Economic Area.
The Constitutional Court (https://www.jornaldenegocios.pt/economia/detalhe/tc-diz-que-prazo-de-um-ano-para-aceder-ao-fundo-de-garantia-salarial-e-inconstitucional) declared unconstitutional the one-year deadline for workers require this Fund, without it being possible to suspend or interrupt it.
According to the Observador media, the number of requests to FGS registered an increase of 22.5% in 2020 compared with 2019 (14,278 applications in 2020, more 2,621 than in 2019). On average, in 2020, 1,189 applications were received per month.
In 2020 the expenditure on payment of salary credits was €75,848,547.04, representing an increase of 8% compared with 2019. This expenditure corresponds to 13,979 applications. The average amount paid per application was €5,426.
Eurofound (2015), Portugal: Wage guarantee in case of insolvency, Restructuring legislation database, Dublin, https://apps.eurofound.europa.eu/legislationdb/wage-guarantee-in-case-of-insolvency/portugal
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