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Portuguese employment law

Portuguese labour law is highly protectionist. Its rules and principles apply both to individual employment relationships and to collective bargaining agreements, which endow trade unions with an important role, particularly in business areas or industries where said agreements are applicable on a broader scale as a result of government extension measures. In 2009 the Labour Code (originally issued in 2003) underwent a relevant reform. This resulted in more flexible solutions, namely on work time organisation issues. From 2011 onwards, in view of the austerity package measures, a number of relevant changes were also introduced, e.g. reductions to the severance compensations due in case of redundancy and reductions to extra work pay. Some of these measures were changed in 2016 under a tendency to withdraw some of the previously applied austerity provisions (e.g. national holidays that had been suspended were put back in place in 2016).


Key Points

  • A relevantreform to labourlaw took place in 2009 and additional changes were introduced after 2011. These reforms had a significant impact on employee rights and obligations.
  • Two of the most striking features of Portuguese law are probably the variety of its sources and the level of protection it grants employees.
  • Collective bargaining agreements are entered into at the regional, national or industry levels, between the unions and employers‘ organisations or on company or multiple company levels between the unions and the relevant employing companies.
  • The scope of application defined in a collective bargaining agreement may be extended, after its entry into force, by a government extension act. In such cases, the provisions of the extended collective agreement, depending on the extension terms, will apply either in a specific region or at a national level, to all companies operating in the relevant business sector or industry and employees at their service (regardless of such employees being union affiliated).

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1070-050 Lisbon
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Avenida da Boavista, 3265 – 5.2 Edifício Oceanvs
4100-137 Porto
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+351 213 817 400

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