Portugal: Latest developments in working life Q3 2019

Amendments to the Labour Code and a challenge by some political parties over aspects of those amendments, as well as new rights for carers, are the main topics of interest in this article. This country update reports on the latest developments in working life in Portugal in the third quarter of 2019.

Amendments to Labour Code

Amendments to the Labour Code were published on 4 September 2019, with the new legislation due to enter into force on 1 October 2019. This followed a long negotiation process that began with a tripartite agreement in June 2018 and was concluded in parliament in July 2019. ^[1]

Some of the measures will be implemented within a specific period. The legislation introduces an ‘excessive turnover fee’ that will take effect on 1 January 2020, but companies will only start to pay the fee in 2021 because its implementation depends on provisions to determine the ‘sector average turnover’, which will serve as a reference. The fee will be applied when companies exceed the average number of fixed-term contracts in each sector.

Individual working time accounts – which allow negotiations to take place between employer and employee, bypassing collective agreements – will be maintained for a maximum of one transition year before being eliminated. The implementation of group working time accounts – to be applied to all workers in a team, section or economic unit as long as it is approved by the workers in a supervised referendum – will require new detailed provisions to be made operational.

The measures that will apply immediately to any new labour contracts include the reduction of the duration of fixed-term contracts from three to two years. These contracts can be renewed up to three times, as long as the total duration of the renewals does not exceed that of the initial contract period. Fixed-term contracts for permanent needs will be allowed when hiring people who have been unemployed for more than 24 months. The possibility of hiring on a permanent basis when launching a new activity of uncertain duration, or when opening a new establishment, will be limited to companies with fewer than 250 employees. Temporary agency employment contracts will be allowed a maximum of six renewals.

• Social and Economic Council (CES): Combater a precariedade e reduzir a segmentação laboral e promover um maior dinamismo da negociação coletiva
• Assembly of the Republic: Lei n.º 93/2019 de 4 de setembro

Political parties ask Constitutional Court to review some provisions

The Left Bloc, the Portuguese Communist Party and The Greens voted against the amendment to the Labour Code. On 25 September 2019, these parties asked the Constitutional Court to review some of the Labour Code provisions on the grounds that they violate the principles of fairness and security at work. These provisions include:

• extending the trial period from 90 to 180 days when hiring first-time jobseekers and those who have been unemployed for a significant period of time
• increasing the duration of very short-term contracts from 15 days to 35 days, and allowing their use beyond seasonal activities in the agriculture and tourism sectors

The parties also asked the court to review the provisions that introduced the possibility of terminating collective agreements when a signatory organisation ceases to exist (whether employer organisation or trade union). The parties argued that this provision violated constitutional rights regarding collective bargaining.

New rights for carers

In early September 2019, Portugal adopted legislation that introduced new rights for carers. Part of this legislation aims to boost paternity rights, particularly in terms of leave for fathers.

Fathers are now entitled to a mandatory initial parental leave period of 20 working days, to be used within six weeks of the birth of a child. Five of these days must be used immediately after the child's birth. Following this leave, fathers also have the right to an additional five working days of leave, as long as it occurs at the same time as the mother's initial parental leave.

The new legislation also defines the status of an informal carer, regulates the rights and obligations of the carer and the person being cared for, and establishes the respective support measures.

• Assembly of the Republic: Lei n.º 90/2019 de 4 de setembro
• Assembly of the Republic: Lei n.º 100/2019 de 6 de setembro

Commentary

The response of the Constitutional Court regarding the Labour Code amendments will determine the validity of the specific measures extending the trial period for first job seekers and long-term unemployed, enlarging the scope and the duration of very short duration contracts, and the new reasons for the expiry of collective agreements.

In terms of the rights of carers, fathers’ rights have been reinforced over time, in step with the greater role of men in parenting. In addition, the law defining the status of informal carer fulfils the long-standing aspiration of this category to be legally recognised.