Generally, Portuguese employment contracts do not need to be in writing. However, for some types of arrangements (fixed-term, part-time, and secondment contracts, as well as agreements with foreign employees) the law requires a written document.
Within 60 days from the start of the employment, the employer has to inform the employee in writing about working conditions that include:
Restrictive covenants are not enforceable under Portuguese labour law, and non-compete agreements or clauses are enforceable only if the activity of the employee is likely to cause harm to the employer. Payment of a non-competition compensation amount should be agreed in advance and complied with.
Employees are entitled to receive a monthly payslip from their employer (either hard copy or online) with details of their remuneration. The employer must keep payroll reports for at least five years and may be audited.
Employees in Portugal have the right to work in healthy, safe and hygienic conditions, which must be guaranteed by the employer. The employer must comply with the preventative principles, guidelines and rules relating to safety, hygiene and health at work.
Employers are obliged to ensure:
Each employee is entitled to a work accident risks insurance. The employer sets that up and informs the relevant regional service of the Authority for Working Conditions (ACT- Autoridade para as Condições do Trabalho).
The employer must implement appropriate company healthy and safety (H&S) activity at work. This includes organising and keeping appropriate H&S services and other preventive measures, like ensuring risk exposure assessments and the performance of tests and other actions on occupational risks and health monitoring.
The employer must have an internal structure that provides for:
Employees working from home have the same right to a healthy and safe environment, which their employer should provide. Employers are responsible for the installation, maintenance, and costs associated with home offices, such as workstation and tools.
Employees should make sure they work from an appropriate, safe and comfortable workstation that includes an ergonomic chair, footrest, elevated computer screen to meet the eyes, suitable light avoiding glares, a room exit without obstructions and cables, which are covered.
Regardless if working from home or the office, employees are entitled to regular health and eye exams, as well as appropriate equipment to protect their eyes.
Pregnant employees who have recently given birth and/or are breastfeeding are entitled to:
The daily amount of the allowances is 65% of the reference salary if the employer is unable to assign the employee other tasks. An employee who has been relieved of night work must be granted a compatible daytime work schedule whenever possible. If that is not possible, they must be relieved from work.
Violation of the provisions on parenthood constitutes a misdemeanour with the Labour Conditions Authority (ACT) acting in the private sector and the Ministries' Inspections in the public sector and cumulatively the General Inspection of Finance (IGF).
Employees are protected from any form of harassment during hiring or employment. Harassment is seen as any undesirable behaviour that either intends to or directly affects the person's dignity, as well as creates an intimidating, hostile, degrading, humiliating or destabilising atmosphere.
Particular attention is placed on extending protections from any form of sexual harassment. That is seen as any undesirable behaviour of sexual nature, whether verbal, non-verbal or physical, that has harassment as its purpose or result.
A candidate or employee can take a civil action to seek compensation for any act of harassment under the Portuguese Civil Code. In addition, the employer can be subject to an administrative proceeding and be fined.
According to the Portuguese Labour Code, an employer cannot discriminate, directly or indirectly, based on:
A candidate or employee who has been a victim of discrimination will have to indicate who the individual/s that have discriminated them are. In turn, if any differences in the employee's working conditions are present, the employer will have to prove that they didn't result from discrimination and give an explanation. The protection against discrimination covers all parts of the employment contract - from hiring to training and promotion, and extends to work conditions, pay and termination. Employees who have been discriminated against are entitled to compensation for any damages.
If the company undergoes a business transfer, existing employment contracts transfer automatically to the new employer. Employees retain the length of service provided to the former employer, which must be recognised by the new employer.
The employee retains the former employer's rights and obligations under the employment contract before the transfer. The employee has to agree to any changes to the terms and conditions of employment.
Employees are protected against dismissal before and after a business transfer. However, if the employee refuses to perform work for the new employer, they are in breach of contract and could be dismissed. The only exception is if the new employer is not providing them with work, which gives employees the ability to resign with just cause and claim compensation.
Pregnant workers, those given birth in the previous 120 days or ones breastfeeding, as well as employees on paternity leave, are protected from being dismissed.
In all other cases, employers must follow a standard and documented disciplinary procedure before terminating an employment contract, first informing the employee, giving them a chance to defend themselves to then issuing a dismissal decision letter.
Pregnant employees whose work duties might put the pregnancy at risk have the right to an alternate arrangement for work. The employer must:
Alongside the above, pregnant employees are also exempt from having to work night shifts, overtime or in concentrated working schedules. They also have the right to work leave to attend prenatal medical appointments, as well as breastfeed.
The Portuguese Labour Code contains several provisions regarding employee's right to privacy, including data protection, biometric data, medical test and exams, remote surveillance and correspondence, and access to information using the company's means of communication.
Personal data of employees in Portugal is protected by the EU General Data Protection Regulation (GDPR). Under GDPR, employers must comply with the following principles when handling the personal data of employees:
Organisations should have a Privacy Statement, which employees can easily access explaining what data is held and what it is used for. Since employees are allowed to access their data, employers need to have in place a procedure for how these requests are handled within one month.
Under GDPR legislation, employees have the right to:
Each year, employees have a right to receive a minimum of 40 hours of learning to enhance professional growth and relevance in their field. If hired on a fixed-term contract, employees are entitled to a minimum number of hours proportional to their agreement.
The employer may provide this annual training for up to two years in advance, or defer it, as long as the training plan so establishes. The employer must provide training to at least 10% of the company's employees each year.
Employees may use the hours of professional training not provided by the employer to attend professional training at their initiative (including during working hours). At the end of the training, the employee must receive a certificate. Depending on the type of training, the certificate may need to be added to the National System of Qualification (Caderneta Individual de Competências nos termos do regime jurídico do Sistema Nacional de Qualificações).
If an employer terminates an employment contract for whatever reason, they have to pay compensation for the number of missing training hours.
In Portugal, annual salaries are divided into 14 payments instead of the standard 12. The extra two salaries are provided as a Christmas bonus paid by the 15th of December and a holiday bonus paid before the employee's annual leave (usually June).
Employers need to sign a written agreement with each employee stating that 50% of the Christmas and Holiday allowances will be paid in 12 times, along with the monthly retribution. The remaining 50% will still be due on the dates stated in the paragraph above. It is not possible to include the allowances 100% in the 12 months retributions.
Workers who have contributed to social security are entitled to one of three kinds of unemployment benefits due to the involuntary loss of employment (initiated by the employer):
Unemployment benefits can be awarded for between 9 and 38 months, depending on the employee's age and the number of years they have worked and made social security contributions. To be eligible for unemployment benefit, an individual must have either worked at least 365 days consecutively or made voluntary contributions for two years. Those who are eligible will receive 65% of their average earnings for the first 180 days.
To qualify, the worker must meet the following conditions:
The social unemployment benefit comes into place if the individual doesn't meet the 365 days of work requirement. In that case, they can avail of the social unemployment benefit if they have worked 180 days in the past 12 months. The benefit is also awarded, at a later date, to people who are still unemployed when the period for payment of the unemployment benefit expires.
Partial unemployment benefit, on the other hand, is awarded if the individual has managed to find a part-time job after losing their full-time employment. It's paid from the time the part-time job begins until the end of the period during which the individual was entitled the full unemployment benefit. It corresponds to the difference between the unemployment benefit the employee was receiving plus 35%, and the pay for the new part-time job.
Dismissal during the trial period:
Employees who are terminated due to collective dismissal or redundancy are entitled to severance. The amount an employee will be paid depends on their seniority within the company.
Since 2011, severance entitlements have been reduced from 30 to 20 days of pay per year of service. The current severance maximum in place since 2013, is either 12 times the employee salary and seniority pay or 240 times the statutory minimum wage. In case of a fixed-term or temporary contract this is increased to 18 times the employee's salary and seniority pay. This means that when calculating severance, whether the employment existed before 2013 or 2011 respectively will impact the amount. The compensation can not exceed 20 times the minimum national monthly wage (€700 as of November 2019).
The Compensation Fund (Fundo de Compensação do Trabalho) and the Guarantee Fund for Work Compensation (Fundo de Garantia de Compensação do Trabalho - FGCT) can be used to finance severance payments partly and is applicable in situations of both individual and collective dismissals.
Employees have the right to be absent from work for the following reasons:
These days are fully paid and come on top of the holiday entitlement. They are topped at 30 days per year.
To learn about all statutory benefits, as well as how leading employers top that, download our Portugal benefits benchmark infographic.
Although not mandatory, employees have the right to set up work councils.
