Portugal: Latest developments in working life Q2 2019

The launch of a barometer to provide more information about the pay differences between men and women, and a proposed amendment to the Labour Code are the main topics of interest in this article. This country update reports on the latest developments in working life in Portugal in the second quarter of 2019.

Launch of Barometer to track gender pay gap

Portugal recently adopted legislation (Law 60/2018) to promote equal pay for women and men, and to achieve the principle of ‘equal pay for equal work or work with an equal value’.^[1]

An innovative instrument introduced by this new legislation is the Barometer on Remuneration Differentials between Women and Men. This instrument aims to provide more and improved statistical information on the topic.

The first edition of the barometer is based on data from the Personnel Records 2017 and it covers the whole country, including the Autonomous Regions of Madeira and the Azores. It includes the gender pay gap for different sectors and different regions. Furthermore, it provides the adjusted gender pay gap, controlling for activity, occupation, qualification level, education and seniority. The barometer was developed by the Office of Strategy and Planning of the Ministry of Labour, Solidarity and Social Security in cooperation with two tripartite bodies: the Commission for Equality in Labour and Employment and the Working Conditions Authority.

On 27 June, the barometer was presented at an international seminar that was attended by several members of the government, representatives from related public administrations and representatives from the social partners.

• Ministry of Labour, Solidarity and Social Security: Barómetro das Diferenças Remuneratórias entre Mulheres e Homens

Mixed reaction to bill to limit fixed-term contracts

In June, a proposal for an amendment to the Labour Code was approved by the parliament. This amendment:

• restricts the use of fixed-term contracts for launching a new activity or starting a new company to companies with fewer than 250 employees
• eliminates the rule allowing the recruitment of first-time jobseekers and the long-term unemployed on fixed-term contracts for permanent company needs
• introduces an additional taxation to social security on the grounds of excessive turnover, when companies or institutions exceed the average sector annual weight of fixed-term employment
• foresees the reduction of the duration of fixed-term contracts (of a certain term or an uncertain term) from three to two years and six to four years, respectively
• foresees the creation of new rules on the renewal of fixed-term contracts by matching the initial contract period as closely as possible with the period strictly necessary to satisfy the temporary needs of the company (the total duration of renewals may not exceed that of the initial contract period)

The proposed amendment also includes changes to very short-term contracts (those not subject to a written form and that apply to casual work). These contracts will increase in length, from 15 to 35 days, up to a maximum of 70 days per year with the same employer. They will also be available for use outside of agricultural seasonal activities or touristic events.

Another part of the proposed amendment envisages a specific measure to boost the use of open-ended contracts for first-time jobseekers and the long-term unemployed by extending their trial period from 90 days to 180 days.

The amendment to the Labour Code generated mixed reactions among social partners. In general, the measures to limit the use and duration of fixed-term contracts were seen as a welcome means of combating the high and persistent levels of temporary work in the country. However, the measures to extend contracts of very short duration and the trial period for first-time jobseekers and the long-term unemployed were seen as potentially generating new forms of precarious work.

The final vote on this amendment, and others related to the tripartite agreement from 2018, is expected to take place at the end of July.