EMCC European Monitoring Centre on Change

Temporary reduction of working hours/suspension of employment contracts

Portugal
Phase: Management
Typ:
  • Response to COVID-19
  • Income support for workers
  • Training
  • Working time flexibility
Senast ändrad: 10 September, 2020
Lokalt namn:

Redução dos períodos normais de trabalho/suspensão dos contratos de trabalho

Engelskt namn:

Temporary reduction of working hours/suspension of employment contracts

Coverage/Eligibility

The temporary reduction of working hours/suspension of employment contracts are combined in a measure which may be adopted on the initiative of a company, provided that there is sufficient evidence of economic crisis and that the measure is required to ensure the company's economic viability and the maintenance of jobs.

The reduction or suspension must have a predefined duration not exceeding six months. Only in the case of a catastrophic event or incident which has severely affected the normal activities of the company the reduction or suspension may be accorded for the duration of one year. The initial six months may be extended for an additional six months as long as the employer notifies, in writing and in a substantiated manner, the worker representatives, and they do not oppose.

Main characteristics


The lay-off procedure consists in a measure which may be adopted by initiative of a company within a context of economic crisis to assure the company’s economic viability and the maintenance of posts. - See more at: http://www.portugalglobal.pt/EN/InvestInPortugal/laboursystem/Paginas/LayoffReductionofactivityorsuspensionofthelabourcontracts.aspx#sthash.mOT1kugz.dpuf

The employer may temporarily reduce the normal working hours or suspend the employment contracts for market reasons, structural or technological shocks or other events that severely affected the normal activities of the company, provided that such action is crucial to ensure the viability of the company and maintenance of jobs.

In 2012, changes were made to make it easier for employers to implement the measure. Now, to initiate the temporary layoff, the eligible company must notify the worker representatives, but the agreement of such representatives is no longer required, and the written notice period was reduced from 10 days to 5 days.

The reduction may include:

  • One or more normal daily or weekly working hours and may involve different groups of workers, alternatively.
  • Reducing the number of employees corresponding to the daily or weekly working hours.

During the reduction or suspension of the contract, workers are entitled to receive a minimum amount equal to 2/3 of the gross salary (without discounts) that they would receive if they were working normally; this will never be lower than the national minimum wage (which stands at €635 in 2020) and with the maximum limit of three times national minimum wage (€1,905 in 2020). The 30% of the compensatory payment attributed to each employee is borne in by the employer and 70% by the social security institution.

During the suspension or reduction period the employee is entitled to maintain all its social security benefits, which are calculated considering their normal remuneration as well their rights relating to set vacation period and vacation and Christmas allowances, under the same conditions as if the same were rendering effective work. Regarding the Christmas allowance, 50% of the compensatory payment is borne by the social security institution and the remaining is directly paid by the employer.

The employer may only introduce a new reduction of the normal working hours or suspend the employment contracts once the previous period of suspension is over and at least half of the duration of that period has passed (for example if the initial suspension was for six months, a new one can only start three months after the last day of the six month period). This period could be shortened by agreement between the employer and the affected workers or their representative structures.

COVID-19 temporary measure

During the COVID-19 crisis, the government introduced a special measure (Article 7 of Decree law 10-G/2020), valid from 27 March to 30 June 2020, and then extended until the end of July. It is aimed at supporting employees' training when on short-time working. This measure adds the following main provisions:

  • The support to the extraordinary training plan is not cumulative to the extraordinary support to the maintenance of the employment contract.
  • The support to the extraordinary training plan has a defined duration (one month).

The training plan is proposed by the employer and approved by the Institute of Employment and Vocational Training (Instituto do Emprego e Formação Profissional, I.P., IEFP, I. P.) and is supplemented by a training grant. This training grant is monthly paid by IEFP, I.P. and it corresponds up to 50% of the gross remuneration or with the maximum limit of the national minimum wage (€635, in 2020). The training plan may be previously defined in articulation with the IEFP, I.P. and must include a selection of Short-Term Training Units (Unidades de Formação de Curta duração - UFCD) included (or not) in the National Catalogue for Qualifications. Whenever possible, this may be developed as distance training. The duration of the training should not be longer than 50% of the normal working time or up to a total of 88 hours of training.

Funding

  • National funds
  • Employer

Involved actors

National government
Ministry of Employment, Solidarity and Social Security (Ministério do Trabalho, Solidariedade e Segurança Social).
Public employment services
Institute of Employment and Vocational Training (Instituto do Emprego e Formação Profissional, I. P., IEFP, I. P.)
Employer or employee organisations
Worker and employer representatives have to involved.

Effectiveness

In April 2020, 202 companies and 3,081 workers were involved in these measures (more 169 companies and 2,141 employees than in January 2020; and more 150 companies and 2,016 employees than in March 2020): 2,538 workers with suspension of employment contracts and 543 with temporary reduction of working hours. (GEP, 2020).

Strengths

Legally binding instrument to enable companies to adapt to temporary downturn and stagnation scenarios without compromising the existing jobs. The exceptional and temporary measure to protect jobs in the context of the COVID-19 pandemic allowed the protection of jobs and maintaining labour contracts in companies.

Weaknesses

The Portuguese Unions Confederation CGTP-IN considers that the measure has costs for the employee - whose salary is always reduced - because he/she works less hours or because his/her contract is suspended.

Exempel

Hotel do Caramulo; DAI; Quimonda; Samarco.
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