Portuguese Government approves 70 changes to Employment Law

Last week’s discussion between the Government and the social stakeholders ended without fully agreeing on the “decent work agenda.” Nevertheless, the Government Cabinet approved 70 measures on June 2nd, 2022.

Following the Cabinet’s approval, the Parliament will debate the proposed amendments to the Labor Code. 

Among the objectives outlined by the agenda are promoting sustainable employment, regulating new forms of work (associated with new forms of work and the digital economy), strengthening the protection of young student workers, and improving the work/life balance.

It is precisely within the scope of sustainable employment that the agenda focuses on, as 35 of the 70 measures presented relate to this objective. 

We highlighted the measures we find to be most important:

Tackling the abusive use of temporary work schemes

• Prohibition of new employment agreements with companies within the same or sharing an organizational structure with the employer
• Concerning temporary work companies, new contracts or renewals must be considered without term if the temporary work company is unlicensed
• Limitation of four renewals for temporary employment contracts

Tackling the abuse of self-employment schemes

• Clarify the current wording to allow employment agreement requalification proceedings to be applicable where a self-employed service provider acts as an independent worker
• Enforcing Social Security contributions on Empresários em Nome Individual where there is economic dependence regarding their employer, paralleling this situation to economically dependent self-employed workers

Discourage unjustified use of non-permanent work

• Temporary blocking of the use of contracting outsourcing services to meet needs arising from collective termination proceedings
• Contract termination compensation equivalent to 24 days per year in the event of termination of fixed-term employment contract (certain or uncertain)

Prevent risks and abuse in connection to trial periods for first job employees

• Trial period extension for young workers
• Mandatory reporting to the Work Conditions Authority within 15 days of employment contract termination during the trial period (applicable to fixed-term contracts of persons seeking their first job or long-term unemployed workers).

Strengthening the fight against undeclared work

• Criminalization of undeclared work, i.e., when the employment relationship is not disclosed to the Social Security Authorities
• Extension to one year of the current presumption of six months of the existence of a previous employment relationship for Social Security regularization proceedings

 Concerning new forms of work, we highlight:

• Promotion of a broad national debate regarding new work organizational models to attain work/life balance
• Promotion of a study and a pilot program to test new work models, including the four-day week in different sectors and the use of hybrid in-person/remote work

As far as young workers/internships are concerned:

• Striking out the possibility of paying trainees less than 80% of the minimum wage, 
• Limitation of trial periods for internships lasting more than 90 days during the last 12 months, concerning the same job and regardless of the employer

In relation to the improvement in the reconciliation between professional, personal, and family life, we can point out

• Elimination of iniquity in parental leaves, for example, by ensuring that the exclusive parental leave of the father, in the optional regime, is not contingent on the mother’s eligibility 
• Granting the parental leave benefits and allowances to family members (grandparents, uncles, or siblings) in case of parents’ force majeure impediments

 

Our Employment Law team is available to assist in reviewing your companies’ policies in order to make sure they are line with current regulation. For more information, please contact us.

 

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