Collective redundancies law amended

Download article in original language : PT9907151NPT.DOC

Following legislation adopted in May 1999, Portugal's legal regime on collective redundancies has been adopted to bring it fully into line with the 1992 EU collective redundancies Directive. Furthermore, the law abolishes a previous rule that a worker who has accepted redundancy compensation cannot legally challenge the redundancy.

Law no. 32/99, amending the legal regime covering collective redundancies, was adopted on 18 May 1999 and has now come into force. The law amends the regime established by Decree-Law no. 64-A/89 of 27 February 1989, with the aim of completing transposition of the 1992 Directive (92/56/EC) amending the 1975 Directive on the approximation of the laws of the Member States relating to collective redundancies (75/129/EEC) (PT9712157N). (Both Directives are now consolidated in Directive 98/59/EC)

The previous regime had already met nearly all the specifications laid down in the Directive. However it did not require the employer to inform worker representatives of the time-frame for the redundancies, and of the method used to calculate any compensation offered to the redundant workers if such compensation exceeds the minimum established by law. These new regulations have now entered into Portuguese law.

The new law also provided an opportunity to include a very important change in the legislation. Under the previous regime, that fact that a worker received compensation from a company for being made redundant meant that the worker accepted the dismissal. The worker thereby lost the right legally to contest the redundancy. There had been attempts to make the law more flexible through case law and legal doctrine, interpreting this point as a mere presumption of acceptance and thus making it possible for the worker to refute it. However, it eventually became clear that the old regime was not only substantially unfair but also, according to many, unconstitutional. The thinking is that collective redundancies usually bring serious financial difficulty to those affected, which leads workers to accept the company's offer of compensation out of necessity, not because they have truly negotiated acceptable redundancy terms. Law no. 32/99 has abolished this rule, so a worker who receives compensation is no longer prevented from legally contesting the redundancy.

The new law also provides that both the employer and the workers' representatives may call in experts to be present during the negotiating process that begins when an employer declares its intention to make employees redundant.

The changes which have been introduced also apply to loss of employment due to elimination of the job position - a means of terminating the employment contract that falls under a regime that is essentially the same as that for collective redundancies, without being collective (in other words, it affects an individual worker rather than a group of workers).

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