On December 27, 2023, Law no. 12/23 was published, approving the expected New General Labor Law ("NGLL"), revoking the current Law no. 7/2015, of June 15.

The NGLL comes into force on 26 March 2024.

The main amendments cover the matters relating to fixed-term employment contracts, rights relating to personality, parental rights, remuneration, disciplinary measures and compensation for termination of the contract.

In this context, the most relevant amendments are the following:

I.         Fixed-term Employment Contract

The rule of the GLL of 2000 regarding the entering into of employment contracts for an indefinite period is reinstated, and therefore fixed-term contracts will have again an exceptional nature, in accordance with temporary needs, as such:

a)        Replacement of an employee who is temporarily unable to work;

b)        Temporary or exceptional increase in the company's business activity resulting from an increase of tasks, excess orders, market or seasonal reasons;

c)        Occasional tasks that exceed the company's normal business activity;

d)        Activities carried out at certain times of the year;

e)        Time-limited activities that do not justify an increase in the number of employees;

f)         Urgent work necessary to protect company's facilities or equipment and other assets to prevent risks to the company and its employees;

g)        Starting a new activity of uncertain duration, or setting up a company's business activity, restructuring or expanding the company's business activity;

h)        Hiring unemployed people who have been unemployed for more than 1 year, or members of other groups covered by legal measures for integration or reintegration into work;

i)         Carrying out specific, periodic and discontinuous tasks;

j)         Execution, management and inspection of construction activities and public works, setting up or repairs carried out in an industrial context and other work of a similar nature and duration;

k)        Learning and practical professional training.

On the other hand, the maximum duration of fixed-term contracts is no longer based on the size of the company, and is now set, for any company, according to the temporary need that justified the entering into the contract and can from 6 to 60 months.The obligation to enter into fixed-term contracts in writing is now an express and key formality, except in contracts justified by certain specific situations which duration does not exceed 30 days.

The notice period for non-renewal of the contract is always  30 days, regardless of the initial duration, and it is still possible for the employer to pay the employee the compensation corresponding to the missing notice period.

II.      Trial Period

The duration of the trial period in permanent contracts, as a rule, will remain at 60 days, being possible to be increased to 180 days by agreement between the parties in the case of employees with management duties.

In fixed-term contracts, the duration of the trial period will now have a maximum duration of 30 days, regardless of the employee’s qualifications.

III.        Rights relating to personality

With the aim of protecting the employee and balancing the position of the parties, by limiting or establishing certain duties for the employer, a new chapter on the rights relating to employee's personality has been added, namely in respect of:

·             Freedom of expression and opinion;

·             Physical and moral integrity;

·             Protection of private life;

·             Protection of personal data (preventing the employer from requesting information from the employee or job applicant concerning (i) private life, except when this is strictly necessary and relevant for the assessment of the respective capacity with regard to the performance of the employment contract and the reasons for this are provided in writing; (ii) health or pregnancy, except when special requirements related to the nature of the professional activity justifies and the reasons for this are provided in writing; this information may only be provided to a health professional);

·             Medical tests and exams (establishing that the employer may not (i) require job applicants or employees to take or submit to medical tests or exams of any kind to prove their physical or mental condition, except when necessary to protect employee’s or third parties’ safety, or when there are particular requirements justifying it; (ii) require job applicants or employees to take or submit to pregnancy tests or exams);

·             Remote surveillance (guaranteeing its use only for safety reasons or when there are particular requirements justifying it, and preventing them from being used to monitor the employee's professional performance).

·             Confidentiality of messages and access to information (ruling the right to confidentiality regarding the content of personal messages and the access to non-professional information sent, received or consulted by the employee on the employer's means of communication).

  IV.        Maternity and Paternity

In line with Presidential Decree no. 8/11, of January 7th, which defines and regulates the Legal Framework for Family Benefits, it is clarified that maternity leave can start 4 weeks prior to the date of birth (not as an obligation).

A pre-maternity leave, with a duration of no more than 180 days, subject to the decision from the Provincial Board of Health is also established in the NGLL.

The additional vacation period for employees with children under the age of 14 is eliminated.

It is established a complementary unpaid paternity leave of 7 working days.

In addition to this leave, it is also established that the father is entitled to replace the mother in the maternity leave in the event of: (i) the mother's proved physical or psychological impairment and (ii) the mother's death.

    V.        New Types of Employment Contract

New special employment contracts have been established, namely teleworking contracts; service commission; sports employment contracts; domestic employment contracts; and artistic employment contracts.

We highlight the teleworking contract, which provides for the possibility of working from:

·             Home;

·             Satellite office;

·             Community work center; and

·             Nomad teleworking.

With the assistance of the employee or a person designated by the employee, the employer may visit the place where the employee is working between 9am and 5pm.

It is established that the employer must respect the employee's non-working time and personal and family resting periods, ensuring the right to professional disconnection.

Employees under a teleworking regime may, by written agreement, be subject to an exemption of working hours schedule.

  VI.        Disciplinary Procedure

Two previous disciplinary measures provided for in the GLL 2000 are reinstated:

·             Temporary demotion; and

·             Suspension from work with loss of pay, which may not exceed 30 days for each offense, nor 60 days in a calendar year.

The prior inquiry period is eliminated.

The method of notification of the notice to the interview to the employee has been extended to one of the following:

a)        By hand, with notice of receipt by the employee;

b)        Before two witnesses, if the employee refuses hand receipt;

c)        By registered mail;

d)        By employee's corporate e-mail.

It is now forbidden to start disciplinary proceedings during the employee’s vacation period.

In line with some case law, a minimum waiting time must now be complied with between the notice and the disciplinary interview, which cannot take place before 5 days from the date of delivery of the notice (the maximum period of 10 working days after the notice is maintained).

It is clarified that the subject of the interview is limited to the facts described in the notice.

VII.      New ways of changing the   employment relation

            i.         Transfer of undertaking

The transfer of undertaking regime has changed, not only in terms of procedure, but also in terms of responsibility.

the transferor must inform the employ’es' representative bodies or, if they ’on't exist, the employees, about the transfer of the company or business, the reasons for it and the date it will take effect, the consequences for the employees and the measures planned for them. This information must be provided in writing 22 working days before the effective date of the transfer.

The transferor and the transferee are now always jointly liable for obligations arising from employment contracts in force before the date of transfer. The same liability regime applies in respect to social security debts existing on the transfer date, and any agreement by the parties providing otherwise are null and void.

The employees are now entitled to terminate the employment contract before the transfer with 22 business days’ prior notice

In addition, the transferor must now notify the transferee of all the transferred rights and obligations.

           ii.         Secondment within group of companies

It is now possible for employees to be temporarily transferred between group companies.

However, the transfer depends of the following conditions :

a) The employees are employed by the transferor under a permanent employment contract;

b) The transfer occurs between related companies, in a corporate relationship of simple or reciprocal shareholding or companies belonging to the same group;

c) Employees must consent;

d) The transfer does not exceed 3 years.

Failure to comply with the requirements for the transfer entitles employees to opt remain working for the transferee, by means of written notification to the transferor and to the transferee until the transfer date.In terms of remuneration, the employees transferred are entitled to the remuneration earned in the transferor, unless the employees of the transferee in the same job and for the same work receive higher remuneration, in which case they will be entitled to that remuneration, acquiring the right to regular and periodic benefits earned at the transferee for the same work.

Employees may terminate the transfer with cause, defined as a substantial modification, without the employee's agreement, of the working conditions previously established. Termination requires a written notice to the transferor, within 30 days of knowledge of the facts underlying the cause for termination.

  VIII.   Working Time

                  i.   New flexible working hours for employees with family responsibilities

Employees with family responsibilities (i.e. with a child under 5 years old or, regardless of age, with a child or parents with a physical disability or chronic illness who live with the employee) have the right to flexible working hours.

Under such regime, the employee may choose, within certain limits, the start and end times of the regular daily working period.

Features of flexible working hours:

(a)      Include one or two periods of mandatory attendance, with a duration equal to half of the regular daily working period;

(b)      Indicate the start and end periods of regular daily work, each with a duration of no less than 1/3 of the regular daily working period (this duration may be reduced to the extent necessary for the schedule remains within the business period);

(c)       Establish a rest period of no more than two hours;

(d)      Can be fulfilled on average: the employee may work up to 6 consecutive hours and up to 10 hours per day and must comply with the respective regular weekly working hours, on average, over each 4-week period.

Procedure:

(a)      A written request from the employee to the employer with 30 days' notice, which must indicate: (i) expected period; (ii) a declaration that the minor lives with the family and the other parent has a professional activity and is not under a flexible working hours regime or is prevented or inhibited from exercising parental authority; (iii) a report certifying the health situation of the minor or parent who is physically disabled or have a confirmed chronic illness;

(b)      The employer must notify the employee of the decision in writing within 20 days. The refusal must be justified by mandatory requirements of the work center or the impossibility of replacing the employee;

(c)       The employee may challenge the decision within 5 days;

(d)      The employer must respond to the reply within 15 days.

      IX.   Work interruption

            i.         Day-off (“Tolerância de ponto”)

It is established the right of the employee to release from work during periods of day off, without loss of pay.

Exceptions:

·         activities or employers who work on a continuous basis (services necessary to ensure the continuity of services that cannot be interrupted; hygiene, health and cleaning services or other preparatory or complementary tasks that must necessarily be carried out on the rest day of other employees or when equipment and installations are inactive; guard and surveillance services);

·         situations in which overtime work is acceptable.

           ii.         Family Day Eve (“Véspera do Dia da Família”) and New Year's Eve

Employees are entitled to interrupt work at 12:30 p.m. on December 24th and 31st, without loss of pay, except in the case of activities or employers who work on a continuous basis (under the same terms as mentioned above for day off).

          iii.         Public Holiday pay

In addition to regular pay, employees working on a public holiday (provided it is for officially recognized reasons and except under shift work schedule) are entitled to:

·         Additional day's regular pay (as it has been so far); and

·         Compensatory day off, to be taken on one of the following 3 days.

        X.    Absences from work

Absence is defined as "the employee's absence at the workplace during the regular daily working period".

Providing evidence of reasons for absence is now mandatory and does not depend on whether it is mentioned in the internal regulations or required by the employer.

Also, it is added to the list of justified absences:

(i)        Absences to attend or accompany for pre-birth appointments during pregnancy and up to 12 months after childbirth, provided this does not exceed 1 day per month;

(ii)       The marriage of ascendants or descendants or sibling, not exceeding one day.

Regarding absences due to the death of family members, the following changes should be highlighted:

·         In the event of the death of siblings, the right to be absent is increased from 3 to 8 days;

·         In the event of the death of nephews and cousins, the employee is allowed to 3 days off.

In addition, employees are entitled to time off to attend anyone's funeral, as long as they can prove that their presence is essential.

Absences due to inability to work for reasons not attributable to the employee (illness, accident or the need to provide assistance to family members in the event of illness or accident) will now have to be paid for 100% by the employer for 6 months, with a right of return of the company from the mandatory social protection entity.

Deducting vacation days due to unjustified absences is eliminated.

      XI.   Additional remuneration

The additional remuneration for shift work, night work or on-call regimes is now established regardless of the size of the company (large, medium, small or micro) and corresponds to 20% of the employee's base salary. 

Payment of overtime work is now set at:

·         50% of the amount of the regular working hour up to a limit of 30 hours per month;

·         75% of the amount of the regular working hour, above this limit.

    XII.   Individual redundancy for objective reasons

     i.        Number of affected employees  

The number of employees required to qualify a dismissal for objective reasons as a collective redundancy is reduced from 20 to 5.

    ii.        Selection criteria of affected employees

The following selection criteria are included:

(a)      More qualified employees or those with more professional experience;

(b)      More senior employees in the position, in the event of equal qualification or professional experience;

(c)       More senior employees in the category, in the event of equal seniority in the position;

(d)      More senior employees in the company, in the event of equal seniority in the category.

  XIII.   Unlawful dismissals

The regime of unlawful dismissals has been reformulated, simplifying and facilitating the establishment of the respective consequences.

Thus, the nullity and unfoundedness of the dismissal will now always be classified as unlawful dismissal, with the following consequences:

(a)      Compensation for pecuniary and non-pecuniary damages;

(b)      Reinstatement of the employee or payment of compensation in lieu, if reinstatement is not possible or the employee does not want it (a right that can be exercised by the employee up to 90 days after reinstatement);

(c)       Payment of wages accrued from the date of the dismissal until the date the decision becomes definitive (counted from a maximum of 30 days before the date of dismissal), up to a maximum limit of 6 months.

   XIV.   Compensation for Termination of Contract

Compensation for termination is no longer calculated according to the size of the company, but with reference to the employee’s base salary and seniority.

Accordingly:

         i.      Expiration, insolvency or extinction of the employer

In the event of expiration of the contract, insolvency or extinction of the employer, the compensation will be 50% of the base salary multiplied by the number of years of service on the same date.

        ii.      Termination for reasons related to the employer

In the event of (i) collective or individual redundancy by objective reasons; (ii) termination by expiration after suspension of the contract for objective reasons, compensation will correspond to the base salary on the termination date , multiplied by the length of service, with a limit of 5, and any additional length of service is calculated on the basis of 50% of the same base salary multiplied by exceeding number of length of service.

       iii.      Non-reinstatement

The compensation due for non-reinstatement of employee unlawfully dismissed or who does not intend to be reinstated will be 50% of the base salary on the termination date , multiplied by the length of service.

       iv.      Dismissal

In the event of a court decision that rejects the dismissal with  cause, where reinstatement is not possible or where the employee does not intend it, and in the event of indirect dismissal, the compensation is calculated by multiplying the base salary on the termination date by the length of service on the same date, with the minimum amount corresponding to 3 months' base salary.