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 - articles 298, 298-A, 300 (1 and 4), 301 (1, 3 and 4), 305 and 306; Decree-Law 220/2006 of 3 November - articles 27, 33 and 60
Turnover
From January 2020 the legislation introduces an excessive turnover fee. The fee will be applied when companies exceed the average number of fixed-term contracts in each sector.
The measures will immediately apply to any new labour contracts, including duration reduction of the fixed-term contracts, from three to two years. These contracts can be renewed up to three times, as long as the total duration of the renewals does not exceed that of the initial contract period. Fixed-term contracts for permanent needs will be allowed when hiring people who have been unemployed for more than 24 months. The possibility of hiring on a permanent basis when launching a new activity of uncertain duration, or when opening a new establishment, will be limited to companies with fewer than 250 employees. Moreover, temporary agency employment contracts will be allowed a maximum of six renewals.
Temporary reduction of working hours/suspension of employment contracts
The employer may temporarily reduce the normal working hours or suspend the employment contracts for market reasons, structural or technological shocks or other events that severely affected the normal activities of the company, provided that such action is crucial to ensure the viability of the company and maintenance of jobs (article 296).
To initiate the temporary layoff, the eligible company must notify the worker representatives with a notice period of 5 days, but the agreement of such representatives is no longer required (article 299).
The reduction may include (article 298): * One or more normal daily or weekly working hours and may involve different groups of workers, alternatively. * Reducing the number of employees corresponding to the daily or weekly working hours.
This scheme applies to cases in which such an action is applicable, i.e. when the company in question has been declared as facing economic difficulties or, with the necessary adaptations, the company is in the recovery process.
The reduction or suspension must have a predefined duration not exceeding six months. Only in the case of a catastrophe or other occurrence which has severely affected the normal activities of the company the reduction or suspension may have the duration of one year (article 301).
The initial six months may be extended for an additional six months as long as the employer notifies, in writing and in a substantiated manner, the worker representative. If there is no worker representative, the employer must notify each worker covered by this scheme (article 301).
During the reduction or suspension of the contract, workers are entitled to receive a minimum amount equal to 2/3 of the gross salary (without discounts) that they would receive if they were working normally; this will never be lower than the national minimum wage (which stands at €760 in 2023) and with the maximum limit of three times the national minimum wage (€2,280 in 2023). The 30% of the compensatory payment attributed to each employee is borne by the employer and 70% by the social security institution (article 305).
During the suspension or reduction period, the employee is entitled to maintain all its social security benefits, which are calculated considering their normal remuneration as well their rights relating to set vacation period and vacation and Christmas allowances, under the same conditions as if the same were rendering effective work. Regarding the Christmas allowance, 50% of the compensatory payment is borne by the social security institution and the remaining is directly paid by the employer (article 306).
The employer may only introduce a new reduction of the normal working hours or suspend the employment contracts once the previous period of suspension is over and at least half of the duration of that period has passed (e.g. if the initial suspension was for 6 months, a new one can only start three months after the last day of the 6 months period). This period could be shortened by agreement between the employer and the affected workers or their representative structures (article 298-A).
Partial unemployment
This is available to people who have applied for or are beneficiaries of unemployment benefits who start part-time work contracts (weekly working hours equal or higher of 20% and equal or lower of 70%, compared to a full-time work period) or self-employed work. Those falling into these categories are eligible once the wage or the income generated by the part-time activity either as self-employed or employee is lower than the unemployment benefit (article 27).
The benefit allowance corresponds to the difference between the amount of the unemployment insurance benefit increased by 35%, and the earnings resulting from the part-time activity as an employee. (article 33).
Partial unemployment benefit can be enhanced through compensation payments and pensions for occupational risks (article 60).
In September 2023,3,179 workers were affected by a reduction of working time while 3,737 employers used temporary layoff scheme (under the Labour Code). Compared with the previous month, both schemes cover more 1,066 and 2,215 employees, respectively. In total, in September 2023, 365 companies were involved in these measures, more 91 than in the previous month.
Eurofound (2015), Portugal: Working time flexibility, Restructuring legislation database, Dublin, https://apps.eurofound.europa.eu/legislationdb/working-time-flexibility/portugal
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