{"id":137500,"date":"2026-04-07T13:44:08","date_gmt":"2026-04-07T13:44:08","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=137500"},"modified":"2026-04-07T13:44:08","modified_gmt":"2026-04-07T13:44:08","slug":"portugal-employment-and-labour-law","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/portugal-employment-and-labour-law\/","title":{"rendered":"Portugal: Employment and Labour Law"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-137500","comparative_guide","type-comparative_guide","status-publish","hentry","guides-employment-and-labour-law","jurisdictions-portugal"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Cerejeira Namora, Marinho Falc\u00e3o<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2026\/03\/CNMF_Auren_RGB_Pagina_1.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Cerejeira Namora, Marinho Falc\u00e3o<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2026\/03\/CNMF_Auren_RGB_Pagina_1.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Employment and Labour Law laws and regulations applicable in Portugal<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does an employer need a reason to lawfully terminate an employment relationship? If so, state what reasons are lawful in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Under Portuguese law, an employer may not unilaterally terminate an employment contract without a valid legal ground recognised under labour legislation.<\/p>\n<p>Pursuant to Article 338 of the Labour Code, \u201cdismissal without just cause or for political or ideological reasons is prohibited\u201d. Accordingly, any termination of an employment contract at the employer\u2019s initiative must be based on one of the legally prescribed grounds for termination.<\/p>\n<p>These grounds include dismissal for cause attributable to the employee (as set out in Articles 351 et seq. of the Labour Code), which is associated with culpable conduct by the employee that, due to its seriousness and consequences, renders the continuation of the employment relationship immediately and practically impossible. For such dismissal to be valid, a formal disciplinary procedure must be initiated and conducted.<\/p>\n<p>In addition, the employer may terminate employment through collective dismissal (Articles 359 et seq. of the Labour Code), which involves the termination of employment contracts affecting at least two or five employees \u2013 depending on whether the undertaking is a micro or small enterprise, or a medium or large enterprise, respectively \u2013 where such termination is based on the closure of one or more organisational units or on a reduction in workforce due to market, structural, or technological reasons. These include: (i) market reasons, such as a foreseeable reduction in demand for goods or services or a practical or legal impossibility of placing them on the market; (ii) structural reasons, including financial imbalance, change of activity, restructuring of the productive organisation, or replacement of core products; and (iii) technological reasons, such as changes in production techniques or processes, automation of production or control systems, or the computerisation of services.<\/p>\n<p>Another form of termination at the employer\u2019s initiative is dismissal due to redundancy (Articles 367 et seq. of the Labour Code), which occurs where a specific position is extinguished for market, structural or technological reasons relating to the undertaking. This form of dismissal is likewise subject to a number of legal requirements and is based on the same categories of justification as those applicable to collective dismissal.<\/p>\n<p>Finally, the law also provides for dismissal on the grounds of unsuitability (Articles 373 et seq. of the Labour Code), where the employee becomes unable to adapt to the requirements of the role. As with other forms of dismissal, this ground is subject to strict procedural and substantive requirements.<\/p>\n<p>Outside these legally defined situations, dismissal is deemed unlawful. In such cases, the employer may be ordered to: (i) compensate the employee for all pecuniary and non-pecuniary damages suffered; (ii) reinstate the employee in the same establishment, without prejudice to their category and seniority, or, at the employee\u2019s option, pay compensation in lieu of reinstatement, to be determined by the court at between 15 and 45 days\u2019 base salary and seniority increments per year of service; and (iii) pay the remuneration the employee would have received from the date of dismissal until the final court decision declaring the dismissal unlawful.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What, if any, additional considerations apply if large numbers of dismissals (redundancies) are planned?  How many employees need to be affected for the additional considerations to apply?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Portugal, where a significant number of dismissals is envisaged, the situation qualifies as a collective dismissal, the requirements and procedures of which are set out in Articles 359 et seq. of the Labour Code.<\/p>\n<p>A collective dismissal is deemed to occur where the employer terminates employment contracts, either simultaneously or successively within a three-month period, affecting at least two or five employees, depending on whether the undertaking is a micro or small enterprise, or a medium or large enterprise, respectively, provided that such dismissals are based on the closure of one or more organisational units or on a reduction in workforce for market, structural or technological reasons.<\/p>\n<p>Where these conditions are met, an employer intending to proceed with a collective dismissal must notify such intention in writing to the works council or, failing that, to the inter-union committee or the company\u2019s trade union committees representing the employees concerned. In the absence of any such bodies, the employer must notify each potentially affected employee individually, in writing.<\/p>\n<p>This notification must include, in particular: i) the reasons for the collective dismissal; ii) the workforce structure, broken down by the company\u2019s organisational units; iii) the criteria for selecting employees to be dismissed; iv) the number of employees to be dismissed and their professional categories; v) the period during which the dismissals are to take place; and vi) the method for calculating the compensation to be granted to the employees concerned.<\/p>\n<p>Upon receipt of the notification, the employees affected may, within five working days, appoint a representative committee from among themselves, composed of up to three or five members, depending on whether the dismissal concerns up to five or more employees.<\/p>\n<p>Within five days following the notification, the employer must initiate an information and consultation phase with the employees\u2019 representative body, with a view to reaching an agreement on the scope and effects of the measures and on alternative measures aimed at reducing the number of dismissals. Such measures may include, inter alia: i) suspension of employment contracts; ii) reduction of working time; iii) professional retraining or redeployment; and iv) early retirement or pre-retirement schemes.<\/p>\n<p>The competent authority of the Ministry responsible for labour matters \u2013 in Portugal, the \u201cAutoridade para as Condi\u00e7\u00f5es do Trabalho\u201d \u2013 participates in this phase in order to ensure compliance with substantive and procedural requirements and to promote conciliation between the parties.<\/p>\n<p>Once an agreement has been reached, or in the absence of such agreement, after 15 days have elapsed from the initial notification, the employer must notify each affected employee of the final decision to dismiss, expressly indicating the grounds, the termination date, and the amount, form, timing and place of payment of compensation and any outstanding or accrued entitlements. This notification must be given in writing and with the following minimum notice periods prior to termination: i) 15 days for employees with less than one year of service; ii) 30 days for employees with at least one year but less than five years of service; iii) 60 days for employees with at least five years but less than ten years of service; and iv) 75 days for employees with ten or more years of service.<\/p>\n<p>Payment of compensation, as well as any outstanding and accrued employment-related credits, must be paid by the end of the applicable notice period.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What, if any, additional considerations apply if a worker\u2019s employment is terminated in the context of a business sale?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The contractual implications arising from the transfer of an undertaking or establishment are set out in Articles 285 et seq. of the Labour Code.<\/p>\n<p>As a general rule, the transfer of ownership of an undertaking or establishment (or part thereof) does not, in itself, result in the termination of employment contracts, as the position of employer in those contracts is transferred to the acquirer.<\/p>\n<p>Employees transferred to the acquirer retain all contractual and acquired rights, including, in particular, remuneration, seniority, professional category, job functions and any acquired social benefits.<\/p>\n<p>The transferor and the transferee must inform the respective employees\u2019 representatives or, in their absence, the employees themselves, of the date and reasons for the transfer, its legal, economic and social consequences for employees, any measures envisaged in relation to them, as well as the content of the agreement entered into between the transferor and the transferee.<\/p>\n<p>The transferor and the transferee are also required to consult the employees\u2019 representatives, prior to the transfer, with a view to reaching agreement on any measures to be applied to employees as a result of the transfer.<\/p>\n<p>At the request of either party \u2013 employer or employee \u2013 the competent authority of the ministry responsible for labour matters may participate in the negotiations, with a view to ensuring compliance with substantive and procedural requirements, promoting conciliation between the parties, and safeguarding employees\u2019 rights.<\/p>\n<p>Finally, employees are entitled to exercise a right of opposition to the transfer of the employer\u2019s position in their employment contract, in the event of a transfer, assignment, or reversion of an undertaking or establishment (or part thereof constituting an economic unit), where such transfer may cause them serious detriment &#8211; namely due to the manifest lack of solvency or difficult financial situation of the acquirer, or where the latter\u2019s organisational and management policies do not inspire confidence.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do employees need to have a minimum period of service in order to benefit from termination rights?  If so, what is the length of the service requirement?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Portuguese law, employees do not need to have a minimum period of service to benefit from termination rights. However, certain entitlements connected with termination, such as notice periods and compensation, vary according to the duration of the contract.<\/p>\n<p>At the same time, protection against unfair dismissal applies from the start of the employment relationship.<\/p>\n<p>It is also important to clarify that access to unemployment benefit is only possible where certain requirements are met, namely: residence in Portugal; involuntary unemployment; the existence of a prior employment contract; capacity for work and availability to work; registration with the employment centre in the area of residence; and compliance with the legally applicable qualifying period.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What, if any, is the minimum notice period to terminate employment?  Are there any categories of employee who typically have a contractual notice entitlement in excess of the minimum period?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The minimum notice period depends on the type of termination and the duration of the contract. In the case of dismissal by the employer on objective grounds (such as redundancy or collective dismissal), Portuguese labour law establishes notice periods ranging from 15 to 75 days, depending on the employee&#8217;s length of service.<\/p>\n<p>In the event of expiry of a fixed-term employment contract, the employer or the employee must notify the other party, in writing, of their intention to terminate it, respectively 15 or 8 days before the term expires.<\/p>\n<p>In cases of resignation from a permanent employment contract, where the initiative lies with the employee, the applicable notice period is 30 or 60 days, depending on whether the employee has up to or more than two years of service. For fixed-term contracts, shorter notice periods apply: 30 or 15 days, depending on whether the employee has up to or more than six months of service.<\/p>\n<p>Certain categories of employee, namely employees holding management or executive positions or performing functions involving representation of the company, may have notice periods exceeding the statutory minimum, up to six months, depending on what is provided for in the employment contract or in a collective agreement.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is it possible to make a payment to a worker to end the employment relationship instead of giving notice?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Portugal, it is not possible to make a payment in lieu of notice.<\/p>\n<p>However, this may occur in certain cases: for instance, failure to comply with the notice period established for termination of the employment contract during the trial period does not prevent the contract from terminating, but the employer must pay the remuneration corresponding to the notice period not observed.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can an employer require a worker to be on garden leave, that is, continue to employ and pay a worker during their notice period but require them to stay at home and not participate in any work?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Although Portuguese law does not expressly regulate garden leave, it is generally accepted that the employer may require the employee not to perform work during the notice period while continuing to pay full remuneration.<\/p>\n<p>This practice is usually justified by the employer\u2019s interests, provided that the employee\u2019s rights, including remuneration and seniority, are fully respected.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does an employer have to follow a prescribed procedure to achieve an effective termination of the employment relationship? If yes, describe the requirements of that procedure or procedures. Is an employee entitled to appeal against their termination?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Portuguese law requires the employer to follow a prescribed procedure to achieve a valid termination of the employment relationship in most cases of dismissal.<\/p>\n<p>In disciplinary dismissals, the employer must initiate formal proceedings by issuing a written statement of charges, allowing the employee to respond, investigating the facts, and issuing a reasoned final decision.<\/p>\n<p>In dismissals based on redundancy or unsuitability, specific procedural steps must also be followed, including prior written communication, consultation obligations, and compliance with statutory criteria and time limits.<\/p>\n<p>Employees are entitled to challenge their dismissal before the competent court. There is, moreover, a specific form of expedited judicial proceedings applicable to cases of individual dismissal with just cause for disciplinary reasons and dismissal due to the extinction of the position. A separate form of judicial proceedings also exists for challenging collective dismissals.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">If the employer does not follow any prescribed procedure as described in response to question 8, what are the consequences for the employer?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>If the employer fails to comply with the prescribed procedure, the dismissal will generally be deemed unlawful. In such circumstances, the employee is entitled to reinstatement or, alternatively, compensation, together with payment of the remuneration that would have been earned from the date of dismissal until the final decision.<\/p>\n<p>The employer may also be subject to administrative sanctions.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How, if at all, are collective agreements relevant to the termination of employment?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Collective agreements can play a significant role in regulating the termination of employment contracts. They may establish more favourable notice periods, additional procedural requirements, or enhanced compensation rights, and may also define specific rules applicable to certain categories of employees.<\/p>\n<p>However, collective agreements cannot derogate from mandatory statutory provisions to the detriment of the employee.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does the employer have to obtain the permission of or inform a third party (e.g local labour authorities or court) before being able to validly terminate the employment relationship? If yes, what are the sanctions for breach of this requirement?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>As a general rule, the employer is not required to obtain prior authorisation from a third party in order to terminate an employment relationship.<\/p>\n<p>Nevertheless, in certain situations, the employer must inform or consult competent authorities or obtain a prior legal opinion.<\/p>\n<p>This is the case, for example, in dismissals involving protected employees, such as pregnant employees or employees on parental leave. Failure to comply with these requirements may result in the dismissal being considered unlawful and may expose the employer to administrative penalties.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What protection from discrimination or harassment are workers entitled to in respect of the termination of employment?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>As a rule, employers are prohibited from engaging in any form of discrimination &#8211; whether direct or indirect &#8211; as well as from committing any act of workplace harassment.<\/p>\n<p>However, Portuguese labour legislation provides specific mechanisms aimed at safeguarding the position of employees who, in the context of any such conduct by the employer, are at risk of having their employment contract terminated or whose contract has already been terminated.<\/p>\n<p>In respect of discrimination, the Portuguese legislator clearly establishes that any retaliatory act that disadvantages an employee as a consequence of rejecting or submitting to a discriminatory act is invalid.<\/p>\n<p>Furthermore, the burden of proof is shared in such a way that the individual alleging discrimination must identify the employee or employees in relation to whom they consider themselves discriminated against, whereas the employer is required to prove that the difference in treatment is not based on any discriminatory factor.<\/p>\n<p>Termination of an employment contract grounded in discriminatory motives also entitles the employee to compensation for both pecuniary and non pecuniary damages, albeit under the general principles of law.<\/p>\n<p>The legislator also takes particular care to protect certain categories of employees (e.g. employees exercising rights related to parenthood).<\/p>\n<p>With regard to harassment, the law similarly provides the victim with a right to compensation.<\/p>\n<p>Moreover, any disciplinary sanction imposed because the employee has alleged being a victim of harassment or has acted as a witness in judicial or administrative offence proceedings concerning harassment is deemed abusive &#8211; and such sanctions include dismissal. In fact, any dismissal occurring within one year after the complaint or any other exercise of rights relating to equality, non discrimination, and harassment is presumed to be abusive.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the possible consequences for the employer if a worker has suffered discrimination or harassment in the context of termination of employment?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The employer may, first of all, incur administrative offences which, in addition to potentially resulting in the imposition of a fine (the amount of which depends on the undertaking\u2019s turnover), may also give rise to ancillary sanctions, namely: publication of the sanction; prohibition from carrying out activity at the establishment, production unit, or worksite where the infringement occurred for a period of up to two years; and disqualification from participating in public auctions or public tenders for a period of up to two years.<\/p>\n<p>In addition, the employer is required to compensate the employee for pecuniary and non pecuniary damages, under the general principles of law.<\/p>\n<p>Further, Portuguese law provides for specific compensation in cases of unlawful dismissal by the employer. As a general rule, where the employee does not opt for reinstatement in judicial proceedings, they may instead choose to receive compensation, the amount of which is determined by the court at between 15 and 45 days of base remuneration and seniority allowances per each full year or fraction of service, taking into account the employee\u2019s remuneration and the degree of unlawfulness &#8211; and such compensation may not be lower than the equivalent of three months of base remuneration and seniority allowances.<\/p>\n<p>Where an abusive sanction is at stake, the level of compensation is increased, with the amount being determined by the court at between 30 and 60 days of base remuneration and seniority allowances per each full year or fraction of service, and may not be lower than the amount corresponding to six months of base remuneration and seniority allowances.<\/p>\n<p>Moreover, during judicial proceedings in which the regularity and lawfulness of the termination of the employment contract are challenged, the employee is entitled to receive the remuneration they would have earned from the date of dismissal until the final and binding court decision declaring the dismissal unlawful (subject to deductions of certain amounts, such as remuneration obtained from new employment).<\/p>\n<p>Additionally, in certain circumstances, the employer\u2019s conduct may amount to a criminal offence, such as the crime of stalking (in the context of harassment) or the crime of discrimination, both punishable by a fine or even imprisonment.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are any categories of worker (for example, fixed-term workers or workers on family leave) entitled to specific protection, other than protection from discrimination or harassment, on the termination of employment?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In the context of parenthood related rights and employees who are informal (non primary) caregivers to a specific person, Portuguese law provides that the dismissal of a pregnant employee, a post-partum employee, a breastfeeding employee, or an employee on parental leave is subject to a prior opinion issued by the competent authority in the field of equality between women and men. Should that authority issue an unfavourable opinion regarding the dismissal, the employer may only proceed with the dismissal following a judicial decision confirming that there is a justified ground for it.<\/p>\n<p>Furthermore, dismissal for cause attributable to an employee who is in any of these situations is presumed to be without just cause.<\/p>\n<p>If the dismissal is declared unlawful by the court, the employer may not oppose the employee\u2019s reinstatement, and the amount of compensation shall be determined by the court at between 30 and 60 days of base remuneration and seniority allowances per each full year or fraction of service, and may not be lower than the equivalent of six months of base remuneration and seniority allowances.<\/p>\n<p>In addition, agreements or any other acts intended to dismiss an employee due to the exercise of rights relating to participation in collective representation structures or due to their trade union membership or lack thereof are also protected from a non discrimination standpoint.<\/p>\n<p>Further, the dismissal without just cause of an employee who is temporarily incapacitated as a result of an occupational accident or an occupational disease entitles the employee &#8211; if they do not choose reinstatement &#8211; to compensation equal to twice the amount that would otherwise be due in the event of unlawful dismissal.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are workers who have made disclosures in the public interest (whistleblowers) entitled to any special protection from termination of employment?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Portuguese law, employers are prohibited from taking any retaliatory action against a whistleblower, including acts, omissions, attempts, or threats.<\/p>\n<p>Anyone who engages in a retaliatory act is required to compensate the whistleblower for the damages caused.<\/p>\n<p>Furthermore, the law provides a presumption that any dismissal is motivated by an internal report, external report, or public disclosure, unless proven otherwise, provided the dismissal occurs within two years of the report or public disclosure. Where dismissal is imposed as a disciplinary sanction, it is presumed to be abusive.<\/p>\n<p>Whistleblowers are also entitled to access to legal aid.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">In the event of financial difficulties, can an employer lawfully terminate an employee\u2019s contract of employment and offer re-engagement on new less favourable terms?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Portuguese labour law, the principle of the non reducibility of the employee\u2019s remuneration applies, constituting a worker\u2019s guarantee that cannot be waived by the employee.<\/p>\n<p>Accordingly, the termination of an employment contract followed immediately by the rehiring of the same employee under exactly the same conditions (professional category, normal working period, among others) except for remuneration may amount to an unlawful act. This is because the termination would, in substance, constitute a simulated act intended solely to circumvent the prohibition on reducing remuneration &#8211; a simulation that, under Portuguese civil law, is null and void and may even amount to fraud against the law.<\/p>\n<p>There are, however, mechanisms available to employers to mitigate the costs associated with maintaining an employment relationship in situations of financial or business hardship. Where termination of the employment contract is intended, and subject to compliance with the applicable legal requirements and procedures, the employer may resort to dismissal on the grounds of redundancy or collective dismissal (depending on the number of employees affected).<\/p>\n<p>Alternatively, a reduction in the normal working period or suspension of the employment contract due to business crisis may be implemented, allowing for a temporary (and at least partial) reduction of the employee\u2019s remuneration.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What, if any, risks are associated with the use of artificial intelligence in an employer\u2019s recruitment or termination decisions? Have any court or tribunal claims been brought regarding an employer\u2019s use of AI or automated decision-making in the termination process?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>This matter is not, at present, extensively regulated under existing national labour legislation.<\/p>\n<p>The law provides that employers have a duty to inform employees of the parameters, criteria, rules, and instructions underlying algorithms or other artificial intelligence systems that affect decision making regarding access to and continuation of employment, as well as working conditions, including profiling and the monitoring of professional activity.<\/p>\n<p>It also establishes that the right to equal opportunities and treatment for employees and job applicants must be upheld in circumstances where decisions are based on algorithms or other artificial intelligence systems.<\/p>\n<p>Beyond this, the general rules prohibiting discriminatory and harassing conduct will apply.<\/p>\n<p>There are no known court decisions concerning the use of AI in the context of termination of employment, not least because the use of such systems within Portuguese businesses remains limited and at an early stage.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What financial compensation is required under law or custom to terminate the employment relationship? How is such compensation calculated?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The compensation due to an employee in the event of termination of the employment contract depends on the type of dismissal in question.<\/p>\n<p>The following analysis focuses on employer-initiated dismissals.<\/p>\n<p>In the case of dismissal for reasons attributable to the employee, no compensation or indemnity is payable. The employee is only entitled to the labour-related entitlements arising from the termination of the contract.<\/p>\n<p>By contrast, in cases of collective dismissal, dismissal due to redundancy (extinction of the position), or dismissal for unsuitability, the employee is entitled to compensation corresponding to 14 days&#8217; base salary and seniority allowances for each complete year of service.<\/p>\n<p>The compensation is calculated as follows:<\/p>\n<ul>\n<li>The monthly base salary and seniority allowances considered for the calculation cannot exceed 20 times the guaranteed monthly minimum wage;<\/li>\n<li>The total compensation cannot exceed 12 times the employee\u2019s monthly base salary and seniority allowances or, if the above limit applies, 240 times the guaranteed monthly minimum wage;<\/li>\n<li>The daily value of base salary and seniority allowances is calculated by dividing the monthly base salary and seniority allowances by 30;<\/li>\n<li>In the case of a fraction of a year, the compensation is calculated proportionally.<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can an employer reach agreement with a worker on the termination of employment in which the employee validly waives his rights in return for a payment? If yes, in what form, should the agreement be documented?  Describe any limitations that apply, including in respect of non-disclosure or confidentiality clauses.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The Labour Code provides that the parties \u2013 employer and employee \u2013 may terminate the employment contract through the conclusion of an agreement (Articles 349 and 350 of the Labour Code).<\/p>\n<p>The termination agreement must be recorded in a document signed by both parties, with each party retaining a copy. The document must explicitly state the date on which the agreement is concluded, the date on which its effects take place, and the legal period within which the agreement may be revoked.<\/p>\n<p>The parties may also agree on other effects, provided they remain within the limits set by law.<\/p>\n<p>Prior to recent legislative changes, it was customary upon termination of an employment contract to execute a waiver agreement, whereby the employee waived any rights that might arise from the contract or its termination.<\/p>\n<p>However, following amendments to labour legislation introduced under the \u201cAgenda do Trabalho Digno\u201d, which came into force on 1 May 2023, the Portuguese legislator inserted a new provision in the Labour Code establishing that employees\u2019 claims arising from the employment contract, its breach, or its termination can no longer be waived through a private agreement, except in the context of a judicial settlement.<\/p>\n<p>In summary, since 1 May 2023, employees may only waive their labour claims within the framework of a judicial settlement.<\/p>\n<p>The inclusion of confidentiality, non-disclosure or non-compete clauses remains permissible, provided that the legal requirements are met and the employees\u2019 fundamental rights are respected.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is it possible to restrict a worker from working for competitors after the termination of employment? If yes, describe any relevant requirements or limitations.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Article 136 of the Labour Code provides that any clause in an employment contract or collective bargaining instrument that, in any way, may impair the exercise of the employee\u2019s freedom to work after the termination of the contract is null and void.<\/p>\n<p>In spite of this provision, it is lawful to restrict an employee\u2019s activity for a maximum period of two years following the termination of the employment contract, provided that the following conditions are met:<\/p>\n<ul>\n<li>The restriction is set out in a written agreement, such as the employment contract or a termination agreement;<\/li>\n<li>The restricted activity is one whose exercise could cause harm to the employer;<\/li>\n<li>The employee is granted compensation during the restriction period, which may be equitably reduced if the employer has incurred substantial expenses in the employee\u2019s professional training.<\/li>\n<\/ul>\n<p>In the case of an employee engaged in activities involving a special relationship of trust or having access to particularly sensitive commercially confidential information, the restriction on the employee\u2019s activity may last up to three years.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is it possible to restrict a worker from soliciting customers or clients, or employees of the employer, after the termination of employment? If yes, describe any relevant requirements or limitations (including any payments that must be made to the worker for the restriction to be valid and enforceable).<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Such restriction also arises from the application of the non-compete agreement regime.<\/p>\n<p>Accordingly, it is lawful to limit an employee\u2019s activity for a maximum period of two years following the termination of the employment contract, provided that the following conditions are met:<\/p>\n<ul>\n<li>The restriction is included in a written agreement, such as the employment contract or a termination agreement;<\/li>\n<li>The restricted activity is one whose exercise could cause harm to the employer;<\/li>\n<li>The employee is granted compensation during the restriction period, which may be equitably reduced if the employer has incurred substantial expenses in the employee\u2019s professional training.<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can an employer require a worker to keep information relating to the employer confidential after the termination of employment?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Although labour law does not explicitly refer to the employee\u2019s obligation to refrain from disclosing information regarding the employer\u2019s organisation, production methods, or business after the termination of the employment contract, it is possible to include such a duty either in the employment contract itself or in a termination agreement concluded between the parties.<\/p>\n<p>In practice, a clause may be included in both documents stipulating that the employee undertakes to keep confidential any information, knowledge, documents, files, records, or data, regardless of how it was acquired, relating to the employer. This includes, in particular, information concerning management, organisation, client portfolios, suppliers, services provided, accounting, and other technical, administrative, or commercial knowledge or secrets, as well as information connected to any other individuals or entities associated with the employer, including managers, directors, employees, service providers, distributors, clients, and suppliers.<\/p>\n<p>Additionally, it is possible to specify that any breach of these obligations may render the employee liable under civil law.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are employers obliged to provide references to new employers if these are requested?  If so, what information must the reference include? What duties apply to employers giving references?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Upon termination of the employment contract, the employer must provide the employee with a work certificate, indicating the dates of admission and termination, as well as the position(s) held. The work certificate may also include additional references at the employee\u2019s request.<\/p>\n<p>Except for the delivery of this document upon termination of the employment contract, the Labour Code does not impose an obligation on the employer to provide references to a new employer.<\/p>\n<p>If the employer nevertheless chooses to do so voluntarily, they must respect the principles of objectivity and confidentiality.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What, in your opinion, are the most common difficulties faced by employers in your jurisdiction when terminating employment and how do you consider employers can mitigate these?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Portuguese labour law, one of the main challenges faced by employers in bringing employment contracts to an end lies in the prohibition of unilateral dismissals without just cause or without an underlying objective reason.<\/p>\n<p>This prohibition is compounded by the technical complexity of the legally prescribed procedures for termination. In a business environment largely dominated by small and medium sized enterprises, there is often a lack of in depth knowledge of the specific step by step requirements applicable to each mode of termination, whether through negotiation (such as a mutual termination agreement) or through unilateral action (including disciplinary dismissal, collective dismissal, redundancy due to the elimination of the job position, dismissal due to unsuitability, among other forms of termination). This gap frequently leads to formal errors capable of invalidating the procedure and rendering the dismissal unlawful.<\/p>\n<p>Each type of dismissal is subject to specific requirements &#8211; from mandatory notifications and opportunities for the employee to be heard and present their arguments, to the involvement of third party entities in certain cases &#8211; and failure to comply with these requirements may result in the dismissal being deemed unlawful, with adverse consequences for the employer.<\/p>\n<p>Furthermore, the legislator\u2019s perceived paternalistic approach towards employees &#8211; reflected in a strongly protective regulatory framework &#8211; contributes to the rigidity of the system and restricts managerial discretion in human resources management. This often surprises foreign management teams, who find unusual the level of stringency imposed by Portuguese labour law in the context of contractual termination.<\/p>\n<p>Additionally, the limited flexibility surrounding dismissals, combined with the associated costs (including compensation, indemnities, and potential litigation related contingencies), creates an obstacle to efficient organisational management. The prohibition of unilateral dismissals without just cause or without objective reasons reinforces this constraint, requiring employers to frame any termination within legally defined grounds, which are often difficult to substantiate in practice.<\/p>\n<p>At Cerejeira Namora, Marinho Falc\u00e3o, we believe that these challenges can be mitigated primarily through specialised and preventive legal advice that accompanies the entire employment cycle, rather than merely moments of crisis. In parallel, continuous training of human resources teams, line managers, and senior management in labour law matters is essential. A strategic and informed approach reduces risks, increases predictability, and promotes more efficient and secure solutions in the termination of employment contracts.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are any legal changes planned that are likely to impact the way employers in your jurisdiction approach termination of employment? If so, please describe what impact you foresee from such changes and how employers can prepare for them?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In the current Portuguese political and legislative context, significant amendments to the legal framework governing the termination of employment contracts are anticipated (expected to be debated in the Portuguese Parliament during the first half of 2026), although their precise scope remains uncertain.<\/p>\n<p>The labour reform under discussion generally points towards greater flexibility, with a direct impact on how employers may manage the termination of employment relationships, partly aiming to mitigate the rigidity that has long characterised the system.<\/p>\n<p>Among the measures under consideration, the most notable is the potential extension of the possibility to replace reinstatement with compensation to all employees unlawfully dismissed, rather than limiting this option to employees in management or administrative positions or those working in micro enterprises. If implemented, this measure could significantly reduce the risk associated with reinstatement &#8211; often regarded as burdensome and dysfunctional &#8211; thereby providing greater predictability regarding the costs of an unlawful dismissal.<\/p>\n<p>There is also discussion around increasing the maximum duration of fixed term employment contracts, as well as broadening the objective circumstances that allow recourse to such contracts. This measure could enhance workforce flexibility, enabling employers to adapt staffing levels more effectively to business needs.<\/p>\n<p>Conversely, an initially considered proposal &#8211; concerning the simplification of dismissal procedures for just cause in micro and small enterprises &#8211; now appears to have been abandoned. As a result, the difficulties faced by such companies in this area are expected to persist.<\/p>\n<p>In this context of uncertainty, there are currently no concrete preparatory steps that employers can adopt beyond closely and continuously monitoring legislative developments. Nevertheless, maintaining up to date and proactive legal counsel, as well as periodically reviewing internal labour management practices, is advisable to ensure swift adaptation to the new legal framework as soon as it is defined.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">6019<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/137500","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=137500"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}