Topic 1 Introduction to the labour market of Portugal, employment contracts and rights

I. Short overview of the portuguese labour market

The Portuguese labour market operates in a relatively peaceful work environment. Portugal, as a member of the European Union, embraces similar employment law systems as its EU partners, and has incorporated into its laws a set of European directives on labour relations that better regulates employment relationships.

Portugal also has particular regulations, especially those pertaining to the regulation of collective labour matters, such as collective employment contracts.

The legal framework for employment in Portugal heavily supports equal treatment of foreign employees who work on Portuguese soil, ensuring the same rights and duties apply for foreign nationals as well as Portuguese employees.

According to the INE (National Statistics Institute) recent Employment Survey, Portugal has a total resident population of 10 286 000 in the second quarter of 2020, comprising 47.1% men and 52.9% women –

Prior to the pandemic, according to the European Labour Force Survey (data for the fourth quarter of 2019), Portugal’s activity rate (75.8%) was higher than the then EU-28 average of 74.2%. The participation of women in the labour market (73.4%) was also significantly higher than the EU-28 average of 68.8%. The data for the second quarter of 2020, however, reflect a significant decrease to 72%.

As far as new forms of work organisation are concerned, part-time work in the country is still limited (only 7.3% of total employment compared to 19.1% for the EU-28), particularly among women (9.9%), when compared to the average of 31.2% female employment at EU-28 level.

In terms of the country’s employment profile, agriculture, animal production, hunting, forestry and fishing employed 5.5% of the working population, industry, construction, energy and water 24.7%, and services around 70% (69.8%) of the working population –

II. Employment contracts in Portugal

In Portugal, it is possible to work under one of the following types of contracts:

  • Fixed-term contract of employment: in this type of contract, the labour relationship has a specific duration, which can extend up to 2 years (definite fixed-term contract) or 4 years (indefinite fixed-term contract). These contracts are mostly only allowed in situations where the employer has a temporary need to hire someone.
  • Open-ended contract of employment.
  • Part-time contract of employment: in this type of contract, the worker is hired to perform less then 8 hours/week or 40 hours/week, which are the maximum legal limits of working time allowed according to the Portuguese legislation.
  • Temporary work: in this situation, the worker is hired by temporary work company, which will then surrender its services oh placing the worker at the disposal of another entity.
  • Provision of services: in this situation, the worker performs his/her work with autonomy, which means he/she will decide where/how/when he/she will work. In this case, the Portuguese labour code (and all the labour rights that we will specify followingly) does not apply, which means that the content of the labour relation will depend exclusively on what was agreed between the parties.

III. Rights of the parties in an employment relationship

Hiring in Portugal is subject to the mandatory rules and statutory limits on several matters, such as remuneration, working hours, holiday rights or duration of contracts.

Employees are entitled to a minimum monthly salary set out by the Portuguese Government, and updated annually based on the cost of living, national productivity and the government’s prices and incomes policy. In 2022, the minimum monthly salary is of € 735,00. In addition, employees are entitled to receive Christmas bonus and holiday bonus.

The maximum regular working period is of 40 hours/week, 8 hours/day.

Employees are entitled to a minimum rest period of eleven consecutive hours between two successive daily work periods, as well as to one day of rest per week. An additional day of rest may be also given other than the rest day required by law.

Employees are entitled to 22 working days of paid holiday per year, and to national public holidays.

The employer must ensure employees health and safety conditions at work and hence comply with a set of general principles and duties aiming at the prevention of work accidents and professional illnesses.

Employers are obliged to ensure: (i) technical work accident preventive measures; (ii) employee training, information and consultation on workplace safety; (iii) internal or external health and safety services. The employer must also contract an insurance to cover work accidents risks for each employee.

The Social Security contribution is a tax levied on the labour income, which is charged to employers and employees at the rates of 23.75% and 11% respectively.

a) Respect and treat the employer, superiors, co-workers and the people who relate to the company, with courtesy and integrity;

b) Attend the service with attendance and punctuality;

c) Carry out the work with zeal and diligence;

d) Diligently participate in vocational training actions as may be provided by the employer;

e) Comply with the orders and instructions of the employer regarding the performance or labor discipline, as well as safety and health, which are not contrary to their rights or guarantees;

f) Be loyal to the employer, in particular by dealing on own account or that of others competing with him, not to disclose information regarding the organization, production methods or business;

g) Ensure the conservation and proper use of assets related to the work entrusted to them by the employer;

h) Promote or perform acts aimed at improving the company’s productivity;

i) Cooperate to improve health and safety at work, notably through the elected representatives of the workers for this purpose.

IV. Protecting the workers’ rights

In Portugal, in case of doubt or if the worker suspects something is wrong in his working relationship, he/she can always reach out to ACT.

ACT works is directly answerable to the Ministry of Solidarity, Employment and Social Security, although with administrative autonomy in the mainland. It is a tripartite body, thereby working with the social partners represented at the Advisory Council. The main mission is to promote the improvement of working conditions and to supervise compliance with the legal framework with regard to health and safety, labour standards and rights, including those relative to gender equality, no discrimination, parental rights and reconciliation between professional and family life. Its activity covers all sectors of activity, as well as the central and local administration services, including public bodies.

Find out more here:

In alternative, the worker may always resort to the Public Prosecution Service (PPS), which “represents the State, which defends the interests prescribed by law, takes part in the enforcement of criminal policy as defined by the organs of sovereignty, carries out the prosecution according to the principle of legality, and defends the democratic legality, pursuant to the Constitution, to this Statute and to the law” [Article 219(1) of the Constitution of the Portuguese Republic (CPR); articles 2 and 4 of the Statute of the Public Prosecution Service].

Although generally identified with the tasks and powers exercised in the criminal field, the PPS’s polymorphic nature extends to the relevant functions assigned to it in the other jurisdictional areas.

As regards the labour jurisdiction, should the law so determine or the parties so request, the Public Prosecution Service represents ex-officio the workers and their families in view of the defense of their social rights.

The representation is:

Free of any charges to the applicant

General – every worker may use it

Inclusive – the workers/families are provided another access channel to the law and the courts, notwithstanding other alternatives at their disposal (judicial representation through a counsel for the defense or an appointed lawyer under the legal aid regime) and deprived of precedence over the other judicial representation channels.

In order to provide an effective representation to workers/families, the PPS has set out helpdesk services provided by prosecutors at the Labour Courts. They are intended to identify cases requiring jurisdictional protection (in particular those relating to issues deriving from labour contracts, labour accidents and professional diseases) and to receive the corresponding requests for representation or reports on labour accidents.

As regards the proceedings deriving from labour accidents, the PPS leads the mediation stage acting as a justice body, without representing or counselling the stakeholders. Counselling is only taken by the PPS in case no consensus has been reached and proceedings have to proceed to the litigation level.

The PPS further intervenes (i) in the scope of the proceedings for recognition of the existence of a labour contract; (ii) in the labour administrative and social security litigation; (iii) in the legality control regarding incorporation and articles of association of trade union associations, employers’ associations and workers’ councils.



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Rather than going to court, why not try to solve your dispute through mediation? This is an alternative dispute resolution (ADR) measure whereby a mediator assists those involved in a dispute to reach an agreement. Both the government and legal professionals recognise the advantages of mediation.

Portugal has a centralised government body responsible for the regulation of mediation activities – the Directorate-General for Justice Policy (Direção-Geral da Política de Justiça).

Recourse to mediation is entirely voluntary.

There is no national code of conduct for mediators. Mediators conduct their activities in accordance with the European Code of Conduct for Mediators

How much does employment mediation cost? EUR 50, to be paid by each party

When parties with financial problems have to pay fees related to the mediation process, they may apply for legal aid and obtain an exemption from the competent body (social security authorities – Instituto de Segurança Social).

Check out more in the Directorate-General for Justice Policy website:

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