The planned changes in the proposal, dubbed “Trabalho XXI” and presented by the Government on July 24 as a “profound” revision of labor legislation, aim to address areas ranging from parental rights (including adjustments in parental leave, breastfeeding, and bereavement leave) to flexible work, corporate training, or probation periods for employment contracts, also forecasting the extension of sectors subject to minimum services during strikes.
At a press conference following the Council of Ministers on July 24, when the draft reform was approved, the Minister of Labor, Solidarity and Social Security stated that the aim is to make labor regimes “that are very rigid” more flexible, to increase “economic competitiveness and promote productivity within companies.”
Maria do Rosário Palma Ramalho also noted that the reform “values workers through merit,” encourages employment, “especially youth employment,” and energizes collective bargaining.
Lawyers consulted consider that “there are losses of rights for workers, particularly for women with the Decreto XXI from the Executive of Luís Montenegro. Check three points.
Beatriz Vasconcelos | 07:50 – 07/08/2025
“In terms of dimension, there are 30 key themes,” she indicated, highlighting that the reform includes initiating the process of transposing two European directives (one on adequate minimum wages in the European Union (EU) and another on working conditions in digital platforms), and modernizes the Labor Code, “revisiting more than a hundred articles,” also including the review of nine additional legal diplomas complementing the Labor Code.
What will change for workers?
Here is a summary of the main changes planned in the draft labor legislation reform:
- Parental leave can extend to six months with sharing between parents
Initial parental leave, upon the birth of a child, can last up to six months (equivalent to 180 days) if, after taking the mandatory 120 days, both parents choose an additional 60 days shared, according to the government proposal.
Currently, the Labor Code states that mother and father have the right to a leave of 120 or 150 consecutive days, which can be shared after childbirth and can be taken simultaneously by both.
With the proposed changes, initial parental leave can last six months if, after the obligatory 120 days, “which can be shared between the parents,” they opt for an additional 60 days, optional, “in equal shared periods.”
If not, the leave can extend up to 150 days, with the optional additional period of 30 days on top of the obligatory 120 days.
The current Labor Code already stipulates that initial parental leave can last 180 days if parents choose to take 150 consecutive days, “in the case of each parent taking exclusively a consecutive 30-day period, or two consecutive 15-day periods, after the obligatory leave taken by the mother.”
- Government wants fathers to take 14 consecutive days of leave after a child’s birth
The total period for exclusive paternal leave remains at 28 days, to be taken within the 42 days following the birth of the baby, but the Government wants fathers to take 14 days consecutively immediately after the child’s birth, instead of the current seven.
The Government’s proposal also removes the rule that determined the remaining days must be taken in intermittent periods of at least seven days, no longer stipulating a minimum duration for these periods.
- Changes in parental benefits
Parental subsidy continues to correspond to 100% of the reference remuneration for the first 120 days of leave, but undergoes changes in other cases.
Currently, for those opting for a 150-day leave, this subsidy drops to 80%, but remains at 100% in case of sharing (if each parent takes at least 30 consecutive days or two consecutive 15-day periods). Under the new proposal, the daily amount in this modality decreases from the current 100% to 90% of the remuneration.
For the 180-day leave, currently paid at 83% to 90% of the reference remuneration, depending on sharing, the executive plans for it to be paid at 100% of the reference remuneration if the additional 60-day period is taken “in equal shared periods” by both parents, i.e., one month for each.
- Changes in rules related to breastfeeding
Regarding breastfeeding, the Government proposes a limit of two years for work dispensation for this purpose, whereas the current law allows this period to extend “as long as breastfeeding lasts,” without a maximum term.
Additionally, a medical certificate proving breastfeeding must be presented to the employer “10 days prior to the start of the dispensation period,” and this document must be renewed every six months “to prove that [the mother] is in a breastfeeding situation.”
Currently, no certificate is required until the baby is one year old, nor is there any set frequency for subsequent evidence of breastfeeding, leaving it to the employer’s discretion.
For part-time workers, the proposed reform removes the safeguard that adjustment for breastfeeding or milk release time relative to work hours cannot “be less than 30 minutes.”
- Government seeks to eliminate leave for gestational mourning
Among the changes introduced in the draft labor legislation reform is in the leave for pregnancy interruption, maintaining the 14 to 30 days (the period is decided by the doctor), paid at 100%, to which the worker is entitled in such cases, but revoking the currently granted three consecutive days for gestational mourning for mothers not opting for the leave, which can also be taken by the father if the mother is taking leave.
Alternatively, the Government suggests that the companion of the worker may use the current rule for family care leave, which allows for up to 15 days off per year to provide urgent and indispensable assistance in cases of illness or accident to a spouse or person cohabiting or sharing household with the worker, a relative, or an in-law in ascending line or the second degree collaterally.
Currently, this means parents can take three days paid at 100% for any gestational loss after 24 weeks of pregnancy, applicable to both the pregnant woman and the other parent, whereas the repeal of these days allows the father to take up to 15 days of justified unpaid leave under family assistance.
Conversely, leave for gestational mourning required only a statement from the hospital or health center, whereas leave for pregnancy interruption requires a “medical certificate indicating the period” of absence.
Eligibility also depends on the worker having paid social security contributions for at least six months and having their contributory situation regularized.
- Flexible work and the right to refuse weekend work
Regarding flexible work for employees “with family responsibilities,” a Supreme Court of Justice (STJ) interpretation allows a worker with a child under 12 years old (or regardless of age, with a child with a disability or chronic illness living with them) to refuse certain work schedules, notably evening or weekend and holiday shifts.
However, the executive now clarifies that this flexibility should “adapt to the special forms of work time organization arising from the company’s operating hours or the nature of the worker’s duties, namely in case of nighttime work or regular weekend and holiday work.”
- Fraudulent sick self-declaration may lead to dismissal
The Government wants that submitting a fraudulent sick self-declaration may lead to dismissal for cause. This relates to a proposed amendment to article 254 of the Labor Code, concerning the proof of justified absence reasons, which stipulates that “presenting a medical statement or sick self-declaration with fraudulent intent” constitutes a “false statement for purposes of dismissal for cause.”
According to current law, “presenting a medical statement with fraudulent intent constitutes a false statement for purposes of dismissal for cause,” hence the aim now is to extend it also to sick self-declarations issued via the SNS 24 hotline.
- Government extends minimum services to more sectors
The Government wants to include nurseries and nursing homes in minimum services during strikes, as well as the food supply sectors and essential security services for property or equipment.
The Minister of Labor, Solidarity, and Social Security, Rosário Palma Ramalho, emphasized that the goal is “to be slightly more demanding regarding the definition of minimum services, without undermining the right to strike,” while making it “only contestable with other fundamental rights,” particularly the right to health, to work, or “to circulate.”
The Labor Code currently states that minimum services must be ensured “in companies or establishments destined to meet urgent social needs,” which include postal and telecommunications services, medical, hospital, and pharmaceutical services, public sanitation, including funeral services, energy and mining, including fuel supplies.
It also applies to water supply, firefighting, public service agencies ensuring essential needs provided by the State, transportation, including ports, airports, railway, and bus stations, pertaining to passengers, perishable food items, and goods essential to the national economy, covering respective loading and unloading and cash value transport and security.
- Changes to fixed-term and open-ended contracts
The Government proposal stipulates that fixed-term contracts now have a minimum initial duration of one year, instead of the current six months, which can be renewed up to three times.
As for the maximum duration, considering renewals, the proposal changes it from two to three years for fixed-term contracts and from four to five years for open-ended contracts.
A fixed-term contract can now be made during the first two years of a company’s operation, regardless of its size, when previously it was only allowed for companies with fewer than 250 employees. It is also admissible for hiring a worker who has never worked under an indefinite-term contract, as well as for hiring retirees due to old age or disability.
- Changes in other work contract regimes
Workers with intermittent work contracts engaging in other activities during inactivity periods will no longer have their income from such activities deducted from the compensatory remuneration paid by the employer.
In commissioned service contracts, the worker has the right to terminate the contract within 30 days after the employer decides to end the commission of service but is only entitled to compensation if the service period has lasted at least six years.
- Return of the individual hours bank
The Government plans to reinstate the individual hours bank, but under different terms than before.
The proposal specifies that the individual hours bank can be established by agreement between employer and employee, where standard working hours can be increased by up to two hours daily, reaching a maximum of 50 hours per week, with the overtime being capped at 150 hours annually and a reference period not exceeding four months.
The idea is that “a bank of hours will now be subsidized under collective bargaining, which did not exist before,” explained the Labor Minister, adding that previous practices were related to adaptability.
- Mandatory training hours in micro-enterprises cut by half
The Government aims to change continuous training hours in companies, intending to reduce them to 20 hours annually for micro-enterprises.
Currently, the Labor Code stipulates that all workers are entitled to a minimum of 40 hours of continuous training per year, which the employer is obligated to provide regardless of the company’s size.
For fixed-term contracts lasting three months or more, the hours are proportional to the contract’s duration.
- Lifting restrictions on ‘outsourcing’ after layoffs
The Government wants to revoke the rule imposing restrictions on ‘outsourcing’ (engaging external labor) for one year following layoffs.
This concerns article 338 A of the Labor Code, introduced within the Dignified Work Agenda, which states “it is not allowed to resort to external service acquisition to a third-party entity to meet needs that were fulfilled by a worker whose contract ceased within the previous 12 months due to collective dismissal or job extinction dismissal.”
The executive now intends to repeal the rule prohibiting external service acquisition to meet needs previously fulfilled by a worker whose contract ended within the prior 12 months due to collective dismissal or job post elimination.
- Employment quotas for people with disabilities
The employment quota system for people with disabilities now includes workers with a degree of disability equal to or greater than 33%, instead of the current 60%, “aiming for their hiring by private sector employers and public sector organizations.”
If a company uses temporary work or services from a protected employment center allocating workers with disabilities to fill a job vacancy in the beneficiary entity, the worker with a disability also joins the beneficiary company’s workforce count.
- Self-employed workers
Currently, a self-employed worker is considered economically dependent on a company (granting them more benefits) when they receive 50% of their income from a single client, but the Government wants to increase this percentage to 80%.
- Digital platforms
The labor law revision proposal includes transposing a European directive aimed at improving work conditions and protecting personal data in digital platform work.
Article 12 of the Labor Code already provided some guidelines for proving the existence of employment contracts with digital platforms, but the Government intends to introduce some changes.
Among them, it requires cumulatively fulfilling two criteria to prove the existence of an employment contract: the activity must be regular, and the provider must be in an economic dependency.
- Telework
The rule currently requiring an employer to only refuse a telework proposal presented by the employee “in writing and with due justification,” provided it is compatible with the role, is revoked. This change will make it easier for employers to refuse telework requests.
The rule stating that, if the employer proposes telework, the employee’s refusal doesn’t have to be justified or lead to their dismissal or penalty is also revoked.
Legal provisions concerning telework now apply, “with necessary adaptations,” to other forms of remote subordinated work, even if not under economic dependence.
- Purchasing vacation days
Workers may request up to two additional vacation days, with a reduction in pay but without losing other benefits, such as meal allowances or holiday and Christmas bonuses.
These days can be before or after vacation periods. They are considered justified absences, must be agreed upon with the employer, and requested “within 10 days of scheduling the vacation period,” and the “employer may only oppose their use on the grounds of the company’s imperative operational needs.”
- Holiday and Christmas bonuses can be paid monthly
Another planned change by the Government allows employees to choose whether to receive holiday and Christmas bonuses in monthly installments or the traditional lump sum.
- End of the 180-day trial period for first job
The Government intends to repeal the clause in the Labor Code that mandates a 180-day probation period for indefinite-term contracts for workers “seeking their first job and long-term unemployed.”
Currently, the law allows a 180-day trial period in these cases but admits it may be “reduced or excluded depending on the length of a previous fixed-term contract with a different employer, provided it was equal to or longer than 90 days.”
No change is proposed for the trial period regarding fixed-term and commissioned service contracts.
