CGTP and UGT have called a general strike in response to the draft bill on labor law reform presented by the Government. This will be the first strike involving the two unions since June 2013, during Portugal’s ‘troika’ intervention. What changes does the Government want to implement in labor laws?
The proposed changes, named “Work XXI” and described by the Government as a “profound” overhaul of labor legislation with modifications in “over one hundred” articles of the Labor Code, aim to address areas such as parental leave, dismissals, extension of contracts, and the sectors required to maintain minimum services during strikes.
Here is a summary of the main changes planned in the labor law reform:
- Parental leave may reach six months if shared between parents.
Initial parental leave for the birth of a child could last up to six months (equivalent to 180 days) if, after the mandatory 120 days, both parents opt for 60 additional shared days, according to the Government’s proposal.
Currently, the Labor Code allows mothers and fathers to take 120 or 150 consecutive days of leave, which they can share after birth, and this can be taken simultaneously by both.
With the proposed changes, initial parental leave could extend to six months if, after the mandatory 120 days, “which may be shared between parents,” the parents choose 60 additional optional days in equal shared periods.
If not, the leave can extend to 150 days, with an additional optional period of 30 days after the mandatory 120 days.
The current Labor Code already allows parental leave to last 180 days if the parents opt for 150 consecutive days and “if each parent takes, exclusively, a period of 30 consecutive days or two periods of 15 consecutive days after the mandatory period for the mother.”
- Government wants fathers to take 14 consecutive days of leave after the birth of a child.
The father’s exclusive parental leave period remains at 28 days, to be taken within the 42 days following the baby’s birth. However, the Government wants fathers to take 14 consecutive days immediately after the birth, rather than the current seven.
The Government’s draft also removes the rule that required the remaining days to be taken in minimum intermittent periods of seven days, eliminating the minimum duration of leave periods.
- Changes in parental subsidy.
The parental subsidy will continue to equate to 100% of the reference salary for the first 120 days of leave but will undergo changes in other cases.
Choosing 150 days of leave currently reduces this subsidy to 80%, but it remains 100% if shared (if each parent takes at least 30 consecutive days or two periods of 15 consecutive days). Under the proposal, the daily amount in this mode drops from 100% to 90% of the salary.
Regarding the 180-day leave, which is currently paid at 83% to 90% of the reference salary depending on sharing, the executive intends it to be paid at 100% of the reference salary if the additional 60 days are taken “equally shared by both parents,” meaning one month for each.
- Changes in breastfeeding rules.
Regarding breastfeeding, in the latest proposal sent to UGT, the Government retains its intention to limit breastfeeding dispensation (which translates into a reduction of the daily work schedule by two hours), maintaining the initial proposal to limit this effect to two years.
However, unlike the initial proposal, which required a medical certificate from the start, the new proposal keeps the current system in place and specifies that proof is only necessary if breastfeeding extends beyond the child’s first year. In that case, the certificate must be presented every six months.
Currently, there is no requirement for a certificate until the baby is one year old, nor is there a set periodicity for subsequent proof of breastfeeding, leaving it to the employer’s discretion.
- Government wants to eliminate the absence for gestational mourning.
In the latest proposal submitted to UGT, the Government maintains its intention to eliminate the absence for gestational mourning but frames it within the leave for pregnancy interruption.
In this way, the mother “always” has the right to leave between 14 and 30 days (the period is decided by the doctor), paid at 100%. Meanwhile, the father, who in the initial proposal would have to resort to absences for family member support, will be entitled to up to three consecutive days of absence.
Currently, the Labor Code allows the mother to take three days in case of gestational loss if she does not take the pregnancy interruption leave. Gestational mourning absence can also be taken by the father, up to three consecutive days, if the mother is taking leave for pregnancy interruption.
Otherwise, gestational mourning absence requires only a statement from the hospital or health center, while pregnancy interruption leave requires a “medical certificate indicating the period” of absence.
The granting of this leave also depends, according to Social Security, on the mother having made contributions for at least six months and having her contribution record in order.
- Change in strike law.
1) Extending minimum services to care for the elderly, children, and people with disabilities (by expanding the concept of “unavoidable social needs”): The Government wants to include nurseries and retirement homes in minimum services in case of a strike, as well as the sectors of food supply and essential equipment security services.
According to the Minister of Labor, Solidarity, and Social Security, the idea is to “be a little more demanding in defining minimum services but without undermining the right to strike,” making it “only compatible with other fundamental rights,” such as the right to health, work, or freedom of movement.
The Labor Code currently stipulates that in case of a strike, minimum services must be ensured “in a company or establishment that aims to satisfy unavoidable social needs,” which include postal and telecommunications, medical, hospital, and pharmaceutical services, public sanitation, including funerals, energy and mining services, including fuel supply.
Also covered are water supply, firefighters, public service points that ensure essential needs assigned to the State, transportation, including ports, airports, train and bus stations, related to passengers, animals, perishable foodstuffs, and goods essential to the national economy, covering respective loading and unloading and transport and security of monetary values.
2) Restricting union action in companies where there are no unionized workers:
The Government’s proposal states that in small, medium, and large companies without unionized workers, unions can only call meetings outside working hours and “provided that the subjective, objective, and geographical scope of the union association covers the company’s workers.” Thus, microenterprises are excluded.
Furthermore, regarding the posting and distribution of union information, the Government suggests that in companies “where there are no unionized workers,” the union associations whose “subjective, objective, and geographical scope includes the company’s workers” can ask the employer to post or allow the posting of the information in question. In other words, unions lose the ability to do so autonomously.
- Changes to the terms of employment contracts.
1) Initial fixed-term contracts may last one year, when currently the limit is six months: The Government’s proposal foresees that fixed-term contracts should have a minimum initial duration of one year instead of the current six months, and they can be renewed up to three times.
2) Increase in the maximum duration of fixed-term contracts, from two to three years.
3) In the case of open-ended fixed-term contracts (where no specific end date is set), there is also an extension of the maximum duration from four to five years.
Regarding the maximum duration, including renewals, the proposal suggests increasing from two to three years for fixed-term contracts and from four to five years for open-ended fixed-term contracts.
4) More situations where fixed-term contracts can be made: Fixed-term contracts will be admissible in the first two years of a company’s operation, regardless of its size, when previously it was only in companies with fewer than 250 workers. It also becomes permissible when hiring a worker who has never worked under a permanent employment contract, as well as in hiring retirees due to old age or disability.
5) New rule for renewing fixed-term contracts: The Government proposes that a fixed-term employment contract may “be renewed up to three times.”
Current law establishes that “the fixed-term employment contract can be renewed up to three times, and the total duration of the renewals cannot exceed that of the initial period of the contract.”
6) Lower fines if preference is not given to fixed-term contractors when filling open positions.
- Changes in other employment contract schemes.
For workers with intermittent employment contracts who engage in other activities during the inactive period, the compensation received for this activity will no longer be deducted from the compensatory payment paid by the employer.
In service commission contracts, the worker has the right to terminate the employment contract up to 30 days after the employer decides to terminate that commission, but they will only be entitled to compensation if the commission lasted for at least six years.
- End of the rule that prohibits combining early retirement with a salary in the same company.
The Government wants to end the rule that prohibits those who retire early from working again in the same company for a period of three years, embracing a proposal from CIP.
According to Decree-Law No. 187/2007, “the combination of old-age pension with work income is free,” but “combining an early old-age pension, granted under the flexibility, with income from the exercise of work or activity, in any capacity, in the same company or business group, is prohibited for a period of three years from the date of access to the early pension.”
Change of worker to a lower category subject to implicit authorization with agreement and if ACT does not respond within 30 days
The Government intends to allow the change of a worker to a lower category to be subject to implicit authorization if the Labor Conditions Authority (ACT) does not respond within 30 days, and with agreement between the worker and the employer.
Currently, the law allows the worker’s change to a lower category “by agreement” between the parties and “due to an urgent need of the company or the worker,” but that change must be authorized by ACT “if it determines a reduction in pay,” with no set time limit for response.
- Return of the individual time bank.
The Government wants to restore the individual time bank but in different terms than in the past.
The proposal determines that the individual time bank can be established by agreement between the employer and the worker, allowing for an increase in normal working hours by up to two hours per day, reaching 50 hours per week, with a limit of 150 hours per year, and including a reference period not exceeding four months.
“The employer must notify the worker of the need to provide additional work at least three days in advance,” is explained in the proposal.
The idea is that “a collective bargaining time bank, which did not exist in the past, will be subsidized,” explained the Minister of Labor, adding that what existed before was for adaptability.
At the same time, the new proposal foresees the revocation of the group time bank.
- Part-time workers with mandatory training hours.
In the new proposal submitted to UGT, the Government abandons the reduction of mandatory training hours for microenterprises and clarifies that part-time workers are entitled “to a minimum number of training hours proportional to the working time contracted in that year,” according to the document accessed by Lusa.
The Labor Code currently provides that all workers are entitled to a minimum of 40 hours of continuous training per year, with the employer obliged to ensure this training regardless of the company’s size.
In the case of fixed-term contracts lasting three months or more, the hours are proportional to the contract duration.
- Changes in dismissal rules.
1) No need to reintegrate unlawfully dismissed workers: The Government proposes that the employer can ask the court to “exclude reintegration on grounds and circumstances that make the worker’s return significantly detrimental and disruptive to the company’s operation.”
2) Simplification of dismissals for just cause for micro and small companies, dispensing with the presentation of evidence requested by the worker and the hearing of their witnesses.
3) Workers can waive credits when dismissed: In case of dismissal or termination of employment contract, the worker can waive the payment of due credits by “written declaration, notarized.”
4) End of restrictions on outsourcing after dismissals: The Government wants to repeal the rule that establishes restrictions on outsourcing (contracting external work) for a year after dismissals.
The issue pertains to Article 338.º A of the Labor Code, introduced under the Decent Work Agenda, which states, “it is not allowed to contract third-party services for needs previously addressed by a worker whose contract was terminated in the previous 12 months by collective dismissal or job termination dismissal.”
The executive now intends to repeal the rule prohibiting the contracting of third-party services for needs previously addressed by a worker whose contract was terminated in the previous 12 months by collective dismissal or job termination dismissal.
5) Another novelty compared to the initial proposal: The Government wants to increase from 14 to 15 days (of remuneration for each year of seniority in the company) the compensation for collective dismissal.
6) Fraudulent illness self-declaration can lead to dismissal: The Government wants a fraudulent illness self-declaration submission to result in dismissal for just cause.
This is a proposed amendment to Article 254.° of the Labor Code, concerning justification of absence, which stipulates that “the presentation to the employer of a medical certificate or self-declaration of illness with fraudulent intent” constitutes a “false statement for purposes of just cause dismissal.”
According to current law, “the presentation to the employer of a medical certificate with fraudulent intent constitutes a false statement for just cause dismissal,” so the goal now is to extend it to self-declarations of illness issued through the SNS 24 line.
- Employment quotas for people with disabilities.
The employment quota system for people with disabilities will now cover workers with a disability degree of 33% or more, instead of the current 60%, “aiming at their hiring by private sector employers and public sector organizations.”
In case of temporary work or service provision by a protected employment center that allocates workers with disabilities to fill a position at the beneficiary entity, the allocated worker is also included in the count of staff of the beneficiary entity.
- Independent workers.
The percentage for a worker to be considered economically dependent increases: Currently, an independent worker is considered economically dependent on a company (giving 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 and TVDE.
The proposed labor legislation revision includes implementing a European directive aimed at improving working conditions and protecting personal data in work on digital platforms.
Article 12.º of the Labor Code already provided some indications to prove the existence of employment contracts with digital platforms, but the Government intends to introduce some changes.
Among them, it wants two requirements cumulatively verified to prove the existence of an employment contract: the activity must be regular, and the provider must be in a situation of economic dependency.
- Telecommuting.
It will be easier for companies to deny telecommuting: The provision that currently requires an employer to refuse a telecommuting request from the employee “in writing and with proper justification,” provided that it is compatible with the function performed, will be revoked. This change will make it easier for employers to deny telecommuting to employees.
Additionally, the provision stating that if the telecommuting proposal originates from the employer, the worker’s opposition does not need to be justified and cannot lead to dismissal or penalization will be revoked.
Legal provisions regarding telecommuting will apply, “with necessary adaptations,” to other forms of subordinate work performed remotely, even if not in an economic dependence regime.
- Government wants to implement continuous workday in the private sector.
The Government wants to introduce the continuous workday in the private sector for workers with a child under 12 or, regardless of age, with a disability, chronic illness, or cancer. This proposal was not included in the initial draft but has since been included in the proposal submitted to UGT.
Currently, the Labor Code does not regulate the continuous workday for the private sector, but there are collective agreements that provide for this regime.
Regarding the public sector, the law allows uninterrupted work, with “a rest period not exceeding thirty minutes,” allowing workers to leave up to one hour earlier. This option can be adopted in “exceptional cases” for workers with children up to 12 years old or “regardless of age, with a disability or chronic illness,” parents who adopt children, workers “who, replacing the parents, are responsible for a grandchild under 12,” student workers, among other duly substantiated cases.
- Government wants to restore three vacation days linked to attendance.
In the new proposal submitted to UGT, the Government drops the possibility of workers requesting up to two additional vacation days, with a pay loss.
Instead, it proposes to restore the three vacation days linked to attendance abolished during the ‘troika.’ Thus, the annual vacation period of 22 days can be increased by up to three days if the worker has no absences or only justified absences, totaling 25 days.
- Holiday and Christmas bonuses may be paid in twelfths.
Another of the various changes the Government intends to introduce concerns the possibility of workers choosing to receive holiday and Christmas bonuses in twelfths or the traditional method, but it depends on the existence of an agreement between worker and employer.
- End of the 180-day trial period for the first job.
The Government intends to revoke from the Labor Code the clause that stipulates a mandatory trial period of 180 days for open-ended contracts for workers “seeking their first job and long-term unemployed.”
Currently, the law provides for a 180-day trial period in these cases, but it admits that it can be “reduced or waived depending on the duration of a previous fixed-term employment contract, concluded with a different employer, was equal to or greater than 90 days.”
Regarding the trial period for fixed-term contracts and service commission contracts, no changes are planned.
- End of the criminalization of omission in hiring workers for Social Security.
The Government wants to eliminate the criminalization of omission in hiring workers for Social Security, including the domestic service sector, proposing to repeal a norm of the General Regime of Tax Offenses (RGIT) that, since May 1, 2023, considers the omission of worker admission communication a crime.
Currently, if employers do not declare a hiring within six months after the deadline stipulated by law for this communication – generally, 15 days before the activity starts – they can be criminalized with a prison sentence of up to three years or a fine of up to 360 days (up to 180,000 euros).
