PORTUGAL LAW AND PRACTICE Contributed by: Joana Torres Fernandes, José Manuel Pereira da Costa, Danielle Avidago, Javier Mateo, António Pratas Nunes, Joana Loureiro Veríssimo, Madalena Mourão and David Serras Pereira, LVP Advogados
4.2 Characteristics of Employment Contracts In Portugal, employment contracts are not gener - ally subject to a written form and may be concluded verbally. However, written form is required in specific cases, including fixed-term contracts, temporary work, part-time work, telework and other regulated arrangements. Regardless of form, employers are subject to informa - tion obligations regarding the essential terms of the employment relationship. Permanent contracts are the standard form of employ - ment. Fixed-term contracts are only permitted where a genuine temporary business need exists and must be properly justified in the contract. The stated rea - son must correspond to an actual temporary need, and improper use may result in the contract being reclassified as a permanent contract from the outset, representing a significant legal risk. Fixed-term contracts are subject to maximum dura - tion limits of two years, including renewals, while open-ended fixed-term contracts (of uncertain dura - tion) may not exceed four years in general. The law also provides for very short-term contracts, mainly for seasonal activities, which do not require written form provided they do not exceed 35 days, with a maximum of 70 days per year with the same employer. Overall, contractual terms are heavily influenced by mandatory rules and collective agreements, limiting Working time is subject to statutory limits and may not, in general, exceed eight hours per day and 40 hours per week. Employees are also entitled to mini - mum rest periods, including 11 consecutive hours of daily rest and a weekly rest. The legal framework provides for flexibility mecha - nisms, including adaptability arrangements, work - ing time banks and compressed working schedules, allowing companies to adjust working time to opera - tional needs within defined limits. individual negotiation. 4.3 Working Time
Adaptability allows working time to be calculated on an average basis, enabling longer working periods in certain phases balanced by shorter periods, provided the applicable average is respected. Working time banks allow additional working hours to be performed and compensated at a later stage, either under collective agreements or group-based arrange - ments subject to employee approval and labour authority oversight. Compressed working schedules allow the weekly working time to be performed over fewer days, resulting in longer daily working periods within legal limits. The law also provides for working time exemption regimes applicable to managerial or high-trust roles, allowing increased flexibility while maintaining essen - tial protections. Overtime work is exceptional in nature and subject to legal limits and increased pay rates. In practice, this results in higher labour costs for employ - ers and acts as a disincentive to its regular use. 4.4 Termination of Employment Contracts Termination of employment in Portugal does not fol - low an “employment at will” model and is subject to statutory grounds and formal procedures. Employer-initiated termination is only permitted in legally defined situations, including disciplinary dis - missal, collective dismissal, redundancy (elimination of position) and dismissal for unsuitability. Termination may also occur through expiry, mutual agreement, termination by the employee (with or with - out cause) or other legally established forms. From an economic perspective, a distinction is made between compensation and indemnity. Compensation is payable in lawful terminations based on objective grounds, while indemnity arises in cases of unlawful dismissal, where the employee may choose reinstate - ment or compensation. Collective dismissal is based on economic, struc - tural or technological reasons and involves a formal, phased procedure. This includes initial communica - tion to employee representatives and to the Directo - rate-General for Employment and Labour Relations,
885 CHAMBERS.COM
Powered by FlippingBook