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05. Pay Equity Laws

Extent of Protection

In Portugal, on February 21, 2019 Law no. 60/2018, of August 21, entered into force approving measures to reinforce equal payment across gender for equal work or work of equal value. This law amended a previously existing law, establishing annual reporting duties upon employers on equal opportunities between men and women. It also updated provisions contained in 2009 legislation and legislation governing the employment public body for non-discrimination –  Comissão para a Igualdade no Trabalho e no Emprego (“CITE”).

At national level, a cabinet resolution (dated May 21) approved, inter alia, the global action targets for the period 2018-2030 in the framework of the National Strategy for Equality and Non-Discrimination, as well as the respective Action Plans. At EU level, the EU Action Plan 2017-2019 of 20 November 2017 with a view to closing the gender pay gap, should also be mentioned.

Remedies

The current rules (as of August 21, 2019) allow for any employee or union representative to request an opinion from CITE on the existence of gender based wage discrimination. The request must be submitted in writing and contain a duly substantiated allegation of wage discrimination.

The employer is notified to speak up and provide information on its remuneration policy, and criteria underlying the calculation of the remuneration of the applicant and of the employee(s) identified in the request for an opinion, with the CITE to deliver a technical proposal for an opinion. If the employer exercises its response rights and CITE concludes that there are indications of discrimination, the employer will be given a 6 months period to justify such evidence or demonstrate the adoption of corrective measures to correct differences.

CITE will give a final, binding opinion following the expiry of the above referenced period or to issue a proposal for an opinion, depending on whether the employer has, or has not, made available information concerning the remuneration policy, and the criteria used for the calculation of the applicant’s remuneration and the employee(s) whom he believes are discriminating against him. CITE’s final opinion is notified to the labour authority (ACT), for the purposes of fining the employer on gender based discrimination, which qualifies as a very serious offence under the Portuguese Labour Code (article 25(8)).

The lack of information is tantamount to not justifying pay differences, which are deemed to be based on discrimination. This procedure applies to any employer, regardless of the number of employees in his service. Dismissal or other sanctions allegedly imposed to punish a labour offence, shall be presumed as being abusive if they take place up to one year after the request for an opinion.

Enforcement/Litigation

Since the entry into force of the Law no. 60/2018, of August 21, there is still no significant litigation about the equal payment.

Other Requirements

Employers are subject to adopting a transparent remuneration policy, built on the basis of evaluation of the components of the functions performed by employees, underpinned by objective criteria common to both sexes (e.g. merit, productivity, attendance or seniority).

The concept of remuneration, for the effects of the law, includes not only the base remuneration, but also other regular benefits and regular payments made, directly or indirectly, in cash or in kind, as well as certain benefits.

In the event of an allegation of compensation discrimination, it is for the employer to demonstrate that it has a transparent and objective remuneration policy, in particular as regards the remuneration of the employee who claims to have been discriminated against, in relation to the remuneration of the employee(s) whom he believes are discriminating against him.

The Single Report and Duty to Inform Employees, drawn up annually by companies, must now include nominative information, segregated by gender. Such information must also be made available to employees.

At the first half of each calendar year, the competent service of the Ministry of Labour provides statistical information on pay differences by gender (a general barometer and by industry, and a balance sheet by company, profession and level of qualification). This information is also forwarded to the Authority for Working Conditions.

Companies with gender pay differences must submit, within 120 days, an assessment plan  if and when notified by the ACT (within 60 days upon receipt of the statistical statement).

Failure to submit and adopt an evaluation plan as described above, and to communicate the results thereof, constitutes a serious administrative infraction that, in addition to the applicable fines, can also involve an ancillary sanction of temporary banning from public tenders for a period of up to two years.

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