Skip to main content

Portuguese Employment Law: Everything You Need To Know

Portuguese Employment Law in 2022: Everything You Need to Know

Are you moving to Portugal and are wondering what the employment laws are like here?

Do you already work in Portugal and need some legal advice?

Portuguese employment law can be confusing if you’re unfamiliar with it, which is why we have created a guide about everything you need to know. This guide will help you better understand your rights as an employee in Portugal in 2022. You’ll learn about:

  • The different types of contracts available to you
  • The minimum wage for 2022
  • How much holiday pay you receive
  • What your rights are if you lose your job, and more!

The Types of Contract

In Portugal, there are several types of employment contract that you need to be familiar with. These contracts include:

  • Fixed-term contracts where there is a fixed duration (up to three years) specified in the contract
  • Unfixed-term contracts where the contract ends once the project is completed (up to six years)
  • Intermittent contracts which are usually for intermittent seasonal activities. The contract must offer employees full-time employment for at least six months of every year; with four months of consecutive work.
  • Part-time contracts which allow employees to work for a maximum of 75% of the hours; from a full-time contract each week

One type of contract that does not need to be in writing are very short duration contracts; which are up to 60 days long. Short duration contracts are typically used for seasonal agricultural work or in the tourism industry.

Minimum Wage in 2022

This year, the minimum wage for employees was raised to €705. This means the national minimum wage has increased by €200 since 2005. However, Portuguese workers are entitled to a bonus. The bonus is equivalent to one month’s salary in the Summer and in December, meaning that minimum wage is actually around €823 a month. Currently around 1 in 4 workers earn minimum wage in Portugal, compared to only 7% in the UK.

Severance Pay

Each contract comes with its own severance pay; which is a set amount of money employers must pay an employee who’s been laid off. For example, if you lose your job and have worked for your company for a year or more, you’re entitled to 1/2 month’s pay (30 days) as severance.

Depending on the reason for dismissal, employees may be entitled to severance pay. For example, if the employee terminates the contract for a ‘just cause’ such as; the employer not paying wages punctually (over 60 days); the employee may be entitled to a basic allowance of 15 -45 days.

Let’s talk about collective dismissal which is; where several employees are dismissed in a short period due to economic/market structure/technological reasons. When employees are given collective dismissal, they are entitled to to severance pay.

However, if the employee resigns, or both the employer and employee agree to terminate the contract, the employee is not entitled to compensation. In fact, if the employee resigns without giving sufficient notice, they may be required by law to pay the employer.

Parental Leave

When starting a new job, many people have concerns about what happens if they have a child. In Portugal, new mothers are entitled to 100% of their wage for up to 120 consecutive days; including up to 30 days before the birth and at least six weeks after the birth. When an additional child born, mothers are given an extra 30 days of full-paid maternity leave. In addition to this; if both parents share the parental leave after the six weeks, they are entitled to an extra 30 days. 

Paternity leave is available for five working days after the birth as well as any 10 days within the 30 days following the birth. It is also possible to take 10 consecutive days off during the maternity leave period. 

If parents want to be eligible for paid leave; they must have been working and making social security contributions for at least six months.

Other Legal Considerations

In addition to establishing standards for employment contracts, Portuguese law also enforces maximum working hours, meal and rest breaks, and sets rules for occupational safety and health. 

Lastly, employees are entitled to take 22 days of annual leave each year;  on top of the 12 mandatory public holidays.

Contact Us

If you are unsure about anything that you have read here, please do not hesitate to contact us for more advice via our website, via our UK number, 0114 227 0070 or our Portuguese number, +351 220280143.

Leave a Reply