Labour law reform in Portugal: What might change?

Regarding digital platforms, the draft clarifies the presumption of an employment contract by detailing indicators such as control over working time, restriction on the provider’s organisational autonomy (acceptance of tasks or recourse to substitutes), combined with regular work and economic dependence. At the same time, it narrows the concept of “digital platform” to services organised through electronic tools and automated monitoring or decision-making systems. This may strengthen employee status for many platform workers.

Fixed-term contracts would be extended. The maximum duration for fixed-term contracts rises from two to three years, with more generous renewal possibilities; and for uncertain-term contracts, the maximum duration rises from four to five years. 

The individual “bank of hours” regime shall be reintroduced. By agreement between the employer and the employee, daily working time can be increased by up to two hours, reaching 50 hours per week and 150 hours per year, within a four‑month reference period. If there is a balance in favour of the worker at the end of the reference period, uncompensated hours are paid in cash, rather than time. This may be attractive for some.

In terms of contract termination, this reform also foresees some changes. The prohibition on outsourcing activities previously carried out by workers dismissed collectively or by job extinction within the preceding 12 months is removed, enabling wider use of external providers to perform the same functions. New rules on collective dismissal litigation require workers who seek reinstatement to provide security corresponding to the compensation received. The reform also foresees the extension to all companies and positions (and not only to microenterprises or management or executive roles) of the employer's ability to request exclusion of reinstatement when the worker’s return proves harmful and disruptive to the company's operation.

These are just some of the various proposed changes brought to us by the preliminary draft of Portugal’s labour law reform. Overall, significant amendments to Portuguese labour legislation are expected. The preliminary draft is still being discussed in the social dialogue and will later be voted in Parliament.

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Founding partner at GPA Law Firm, Margarida Lino Santos is a lawyer and member of the Portuguese Bar Association since 1997, with expertise on mergers and acquisitions, real estate, capital markets, labour and pharmaceutical law, and has published several articles in leading legal publications.