General Principles and Sources of Labor Law

Employment Contracts & Worker Protections

In Portugal, employment contracts are governed by comprehensive labor legislation designed to protect workers while ensuring fair business practices. The employment contract is specifically subject to instruments of collective labor regulation and labor practices that align with the principle of good faith.

A fundamental principle of Portuguese employment law is equality. Foreign workers in Portugal have the same rights and duties as Portuguese workers. This ensures that all employees, regardless of nationality, receive equal treatment and protection under the law.

Fundamental Rights & Guarantees

Worker’s rights in Portugal are constitutionally guaranteed and codified in the Labor Code, ensuring dignified working conditions for all employees. The fundamental rights include a maximum daily working day of 8 hours, a minimum wage of 820 euros as of 2024, a minimum of 22 days of annual leave, both holiday and Christmas bonuses, comprehensive parental protection through leave and support systems, sickness protection including medical leave and benefits, and protection against workplace discrimination.

Role of the Autoridade para as Condições do Trabalho (ACT)

The Autoridade para as Condições do Trabalho (ACT) serves as the primary supervisory body for labor guarantees in Portugal. This authority is responsible for ensuring compliance with employment legislation, conducting inspections, and handling workplace complaints.

Types of Employment Contracts

Fixed-Term Employment Contracts

Fixed-term employment contracts must be executed in writing and include specific mandatory elements. These contracts must contain the identification and signatures of both parties, details of the worker’s activity and corresponding remuneration, the location and normal working hours, the contract start date, a clear indication of the stipulated term or predictable duration, a justified reason for the fixed-term nature, and both contract celebration and cessation dates.

The written form and complete information are essential. Failure to include these elements may result in the contract being considered indefinite, providing greater protection to the worker.

Indefinite Employment Contracts

An indefinite employment contract (“sem termo”) is the standard form of employment in Portugal. A contract is automatically considered indefinite if the term stipulation is intended to evade indefinite contract regulations, if it is celebrated outside of legally permitted cases for fixed-term contracts, or if the written form, identification/signatures, or specific date information/justification for the term are missing or insufficient.

Contracts with Multiple Employers

When a worker is employed by multiple employers simultaneously, the contract must be in writing and contain the identification, signatures, and domicile/headquarters of all parties, the worker’s activity, location, and normal working hours, and an indication of which employer represents the others in dealings with the worker.

All employers are jointly responsible for fulfilling obligations arising from the contract, ensuring the worker’s rights are protected regardless of which employer is primarily responsible for specific aspects of the employment relationship.

Temporary Work Contracts

Temporary work arrangements require written contracts signed in duplicate, containing the identification of all parties and their social security numbers, the temporary work agency’s license number, a justified reason for using temporary work, the contracted activity, location, and normal working hours, remuneration details, and the start date, contract end date, and celebration date.

If a written document is absent or the justified reason is omitted or insufficient, the work is automatically considered to be performed for the temporary work agency under an indefinite employment contract, providing enhanced job security.

Telework Regulations

Telework is defined as work performed under the legal subordination of an employee to an employer, in a location not determined by the employer, using information and communication technologies. The written form is required only as proof of the telework arrangement. If the telework proposal comes from the employer, the worker’s opposition does not need justification, and refusal to accept telework cannot be grounds for dismissal or sanctions. Certain provisions apply to all remote work situations, even those without legal subordination but with economic dependence.

Worker’s Rights and Protections

Fundamental Rights (Salary, Holidays, Rest Periods)

Portuguese workers enjoy comprehensive fundamental rights regarding compensation and time off. Workers are entitled to fair remuneration, including a holiday bonus equivalent to one month’s remuneration and a Christmas bonus usually paid in December equal to the monthly salary.

Every worker has the right to a minimum of 22 working days of annual leave without prejudice to salary or bonuses. Holiday pay corresponds to what the worker would receive if actually working, plus the holiday bonus. Workers also have guaranteed rest periods between working days and weeks, ensuring adequate recovery time.

Non-Discrimination at Work

The principle of equality and non-discrimination is fundamental in Portuguese employment law. Protection extends to discrimination based on sex, race, origin, language, religion, political or ideological convictions, and union affiliation. This protection covers all aspects of employment including selection criteria and hiring conditions, access to training and professional development, remuneration and promotion opportunities, and affiliation with collective representation structures.

This protection also applies to decisions based on algorithms or artificial intelligence systems, ensuring modern technology doesn’t circumvent anti-discrimination principles.

Parental Rights & Protections

Portugal recognizes motherhood and fatherhood as eminent social values, providing comprehensive parental protection. The system includes various leave types such as initial parental leave which can be shared between parents, initial parental leave exclusive to the mother, initial parental leave for the father due to the mother’s impossibility, and leave for adoption requiring proof of judicial or administrative confidence.

Workers can be absent from work to provide necessary and urgent assistance in case of illness or accident to a child under 12, or a child with a disability regardless of age. After exhausting absence rights, parents have additional leave rights for child assistance. For shared leave, joint decision documents are required, and workers must prove their partner is employed and has informed their employer of the joint decision.

Protection in Sickness & Occupational Diseases

Workers incapacitated by illness have the right to sickness benefit if they meet legal requirements. The benefit is paid by Social Security as a percentage of salary, depending on the duration of sick leave. Importantly, absences due to sickness do not result in the loss of rights, except for remuneration during the absence period.

Workers and their families also have the right to compensation for damages resulting from work accidents or occupational diseases. While occupational diseases are listed in official publications, injuries or diseases not on the list are compensable if proven to be a necessary and direct consequence of work activity.

Rights for Specific Categories (Pregnant Workers, Minors, Disabled Workers)

Pregnant, postpartum, or lactating workers have the right to exemption from work organized under adaptability, time bank, or concentrated schedules. They are entitled to risk assessment and protective measures, written information about risk assessment results and protection measures, and the right to request priority inspection if the employer fails to comply with safety requirements.

Minor workers have the right to working conditions suitable for their age and development, protection of safety, health, physical, psychological, and moral development, protection of education and training opportunities, risk assessment before starting work or before significant changes, and information about identified risks and prevention measures. They can receive remuneration unless legal representatives object in writing.

Workers with disability or chronic illness, including those with active oncological illness in treatment phase, are exempt from work that could prejudice their health or safety.

Data Protection & Confidentiality

Employers have strict limitations on personal information requests. They cannot demand information about private life unless strictly necessary and relevant for job aptitude assessment, and must provide written justification for any personal information requests. Health or pregnancy information can only be requested if justified by the professional activity’s nature, must be provided to a doctor who only communicates fitness status to the employer, and workers have the right to control their data, know its content and purpose, and demand rectification or updates.

Biometric data processing requires prior notification to the National Data Protection Commission and is only allowed if necessary, adequate, and proportionate to objectives. Such data must be kept only as long as necessary and destroyed upon worker transfer or contract termination, and requires opinion from workers’ commission or proof of request.

Workers have the right to privacy and confidentiality regarding personal messages and access to non-professional information sent, received, or consulted through company systems.

Right to Information & Training

Employers must inform workers about relevant aspects of employment contracts, including entity identification and structure, work locations, worker category or function description, contract start date and duration, holiday duration and notice periods, remuneration details, normal working hours and overtime rules, social protection regimes, and parameters, criteria, and rules for algorithms or AI systems affecting employment decisions.

Companies must provide workers with vocational training for at least 40 hours per year. The training area is determined by agreement or by the employer if no agreement exists, and must coincide with or relate to the worker’s activity. Training hours not used expire after three years.

Safety and Health at Work

Employers must adopt comprehensive safety and health measures as required by law or collective regulation. This includes providing adequate information and training for accident and disease prevention, maintaining safe working environments, ensuring temporary workers receive the same level of protection as other workers, conducting risk assessments and communicating results to workers, and providing appropriate health examinations.

Workers must comply with safety and health prescriptions established by law, collective regulation, or determined by the employer.

Rights in Business Transfers & Work Suspensions

When a business or part of it is transferred, both transferor and transferee must inform workers’ representatives about transfer details, consequences, and planned measures. Information must be provided in writing at least 10 working days before consultation, and they must consult workers’ representatives before the transfer to reach agreement on worker measures and inform the labor ministry’s inspection service of contract content and transferred unit elements.

When temporary reduction of working hours or contract suspension occurs, the employer must provide detailed information about the measure and supporting documentation, promote an information and negotiation phase with workers’ representatives, and communicate the decided measure in writing to each affected worker.

Employer’s Duties and Responsibilities

General & Specific Employer Obligations

Employers and workers must act in good faith when exercising rights and fulfilling obligations. They must collaborate to achieve greater productivity and promote the worker’s human, professional, and social development.

Specific employer duties include adopting required safety and health measures, providing information and training for risk prevention, and maintaining updated worker registers including names, dates, contract types, categories, promotions, remuneration, holidays, and absences.

Duties Regarding Telework

Employers with teleworking employees must inform workers about characteristics and use of remote monitoring devices, refrain from contacting workers during rest periods, work to reduce worker isolation, provide training for adequate use of teleworking equipment and systems, and fully compensate workers for additional expenses including equipment, energy costs, and network costs. They must also obtain worker consent and provide 48 hours’ notice for workplace inspections.

Compliance with AI & Algorithm Regulations

Employers must provide workers with complete information about parameters, criteria, rules, and instructions governing algorithms or AI systems that affect decisions about access to and maintenance of employment, working conditions, worker profiling, and activity control.

Collective Representation and Bargaining

Worker Commissions & Trade Unions

Worker commissions acquire legal personality by registering statutes with the competent labor ministry service. They have rights to receive necessary information about business operations, exercise control over company management, participate in restructuring processes, access information about business activity, organization, personnel management, and financial situation, and receive prior information and consultation on restructuring plans.

Trade unions must have statutes regulating their object, name, duration, headquarters, membership rules, member rights and duties, disciplinary procedures, governance structures, and asset destination. Union delegates have rights to post communications and distribute information within company premises, access information and consultation on company matters, and representation in employment-related decisions.

Collective Bargaining Process

The collective bargaining process follows structured procedures beginning with a written, justified proposal to the other party. The receiving party must address all clauses, accepting, rejecting, or counter-proposing. If there is no response or counter-proposal, the proponent can request conciliation. Each party must provide requested information that doesn’t prejudice their interests, and representatives should consult interested workers or employers.

Parties should prioritize negotiating remuneration, working time duration and organization, while adjusting global costs.

Contents & Enforcement of Collective Agreements

Collective agreements must indicate the celebrating entities and representatives, scope including sector, professional, and geographical areas, celebration date and revised conventions, and agreed contents including professional training, safety conditions, equality measures, remuneration structures, and dispute resolution processes.

Arbitration & Extension of Agreements

Arbitration can be mandatory or necessary, determined by reasoned order from the minister responsible for labor. The Economic and Social Council handles arbitrator selection for various types of arbitration cases.

Collective agreements can be extended to employers and workers in the same sector through “portaria de extensão,” considering social and economic circumstances and similarity of situations.

Strike Regulations

Notice & Minimum Service Requirements

Entities deciding to strike must provide notice to employers and the labor ministry with at least five working days’ notice, or 10 working days in specific situations. The notice must include a proposal for defining necessary safety and maintenance services, and for essential social need companies, a proposal for minimum services.

Essential Social Need Sectors

Essential social need sectors requiring minimum services during strikes include communications, medical, hospital, and pharmaceutical services, public sanitation, energy, mines, and fuel supply, water supply, firefighters, essential public services, transportation of passengers, animals, perishables, and essential goods, and transport and security of monetary values.

Rights & Obligations During Strikes

During strikes, the employment contract is suspended regarding remuneration and subordination, but rights related to social security and work accident benefits remain unaffected. The suspension period counts for seniority purposes. Workers assigned to minimum services remain under employer authority and receive remuneration. Minimum services should be defined by collective regulation or agreement between parties.

Cessation of Employment Contracts

Contract Revocation & Dismissal Procedures

Agreement to revoke must be in a signed document stating the agreement date and start date of effects, legal period for exercising termination rights, other agreed effects within legal limits, and global monetary compensation if agreed.

Dismissal for worker conduct requires specific procedures including prior inquiry if needed which must begin within 30 days of suspicion. The worker has 10 working days to consult the process and respond. The employer must carry out requested proof unless clearly dilatory. Judicial review examines formal defects and merits of grounds, and unlawful dismissal requires employer compensation.

Collective Dismissal & Extinction of Position

Collective dismissal requires information to workers’ representatives and labor ministry service, communication stating reasons, personnel data, selection criteria, timing, and compensation calculation, an information and negotiation phase within five days, expert assistance availability for meetings, and detailed documentation and reporting to labor ministry.

Position extinction is applied when positions are eliminated due to economic, technological, or structural reasons. Selection criteria are applied in order of worst performance review, lower academic or professional qualifications, higher position cost, and less seniority.

Dismissal for Unsuitability

Dismissal for unsuitability can occur due to substantial modification of worker’s performance including reduced productivity or quality, repeated breakdowns, or safety risks that are likely permanent. The process requires informing the worker with factual description of performance modifications, including details of position modifications and training or adaptation results, allowing worker and representatives to submit reasoned opinions, and confirming requirements while providing compensation details.

Violations and Penalties

Classification of Labor Contraventions

Labor contraventions are classified as mild for minor violations with limited impact, grave for significant violations affecting worker rights, and very grave for serious violations with substantial impact on worker protection.

Fines & Legal Consequences

Fines vary based on the company’s turnover and the offender’s degree of fault and severity of the contravention. Specific examples include very grave violations for demanding unauthorized personal or health data, grave violations for violating biometric data rules, employer information duties, telework duties, and collective bargaining procedures, and mild violations for failure to present requested documents to labor inspection service.

Half of fine proceeds from labor ministry inspection processes go to the service as compensation for operational costs and procedural expenses.

Authorities and Resources

Autoridade para as Condições do Trabalho (ACT)

ACT serves as the primary authority supervising labor guarantees in Portugal. Services include information on labor legislation, workplace inspections, complaint handling, and contact through phone and digital platforms.

Social Security & Worker Support

Social Security provides details on subsidies and parental protection, sickness benefit information, support for work accident and occupational disease claims, and online portal access for benefit information.

Trade Unions & Legal Assistance

Available support includes trade union legal support and clarifications, specialized lawyer consultations for complex situations, worker representation in employment disputes, and collective bargaining support.

Understanding these comprehensive rights and duties is essential for maintaining fair and balanced employment relationships. Workers should stay informed to claim their due rights, while knowledge of duties strengthens the employment bond. In cases of doubt, reliable sources like ACT, Social Security, trade unions, and specialized lawyers should be consulted for guidance and support.