13 June 2024

Portuguese Labor Law

The recent modifications to Labor Law in Portugal have brought significant changes to labor dynamics, aiming to establish a fairer and more balanced working environment for employers and workers. These updates are intended to correct some of the shortcomings identified in the previous legislation, thereby promoting greater stability in the labor market.

One of the fundamental changes concerns temporary employment contracts, which are now limited to a maximum of four renewals. This measure directly addresses the need to combat job insecurity, ensuring that temporary workers do not remain trapped in prolonged instability. By setting this limit, the goal is also to encourage the transition to permanent contracts, ensuring greater job security.

Another relevant aspect is the revision of compensation for collective dismissal. According to the legislation, dismissed workers are entitled to compensation equivalent to 14 days of basic pay and seniority allowances for each complete year of service. This increase in compensation aims to provide a stronger safety net, recognizing and valuing the years of service and the contributions of workers to the companies.

Additionally, the new law explicitly prohibits companies from resorting to outsourcing to meet needs previously covered by workers whose contracts were terminated in the previous 12 months. This measure plays a crucial role in preventing the replacement of permanent workers with temporary or outsourced labor, thereby protecting workers' rights and jobs and promoting greater loyalty and stability in the workplace.

The changes also include stricter regulation of telework conditions and the strengthening of parental rights. These measures reflect the adaptation of legislation to the new realities of the labor market, including the increase in telework and the need to balance professional and family life.

In summary, the changes to the Labor Law represent a significant step towards a fairer and more equitable working environment in Portugal. These amendments aim not only to improve working conditions but also to ensure greater stability and security for all workers. With these reforms, the Portuguese labor market is expected to become more dynamic and inclusive, promoting sustained economic growth and greater social cohesion.

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