Topic 1 Terminology and legal frameworks of the national labour market

In Portugal, there are many ways in which one can engage in an occupation.

It is possible to be self-employed, in which case the individual can carry out his/her occupation autonomously and on his/her own behalf.

It is possible to engage in economical activity via the establishment of a commercial company, namely a Limited Liability Company, a Limited Liability Company by a Sole Owner, or a Public Limited Company

The most common way to work in Portugal is with a Labour Contract, in which case the worker gainfully engages in activity under the supervision/authority of the employer.

The legal instruments that rule each of the above-mentioned modalities are different.

If an individual engages in an occupation as a self-employed person, the regulations for the Provision of Services apply, as per the Portuguese Civil Code.

If an individual engages in an occupation by establishing a commercial company, the regulations within the Commercial Companies Code apply.

If an individual engages in an occupation by means of a Labour Contract, then generally the regulations within the Labour Code apply.

The national labour legal system is mainly based on the regulations foreseen in the Labour Code, Law 7/2009 of 12 February.

The Portuguese Labour Code is set as a recent and modern law, which naturally encompasses the trends and guidelines of EU Law.

The general rule for hiring workers is by means of a contract with and indefinite duration, even though there are other modalities, such as a fixed-term or indeterminate duration Labour Contracts, as well as the possibility of part-time contracts.

This is a well-founded legal relationship, particularly where rights and duties from both parties are foreseen, without neglecting the remuneration to which the worker is entitled.

Due to the consequences it may bear, the termination of a Labour Contract is well regulated by the Labour Code.

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Both parties are contractually compelled to communicate the existence and signature of the Labour Contract to Portuguese Social Security Services, and employers are bound to submit monthly declarations (to Social Security).

Both employer and employee submit monthly payments to Social Security, which, in turn, ensures workers’ basic rights, such as protection in such cases as sickness, parenthood, old age, unemployment, etc.

In addition to the Labour Code, which regulates labour contracts between private parties, there is also the General Labour Law for Civil Service (Law no. 35/2014 of 20 June), which is applicable to labour bonds between private parties and the State.

It is also worth mentioning the important role that Collective Labour Regulation Instruments (IRCT) play in the specific regulation of work relations. IRCTs are legal instruments negotiated by employers or their representatives on one side, and by workers or their representatives on the other side, namely by unions.

Currently, Labour Code ensures equal rights for all worker, forbidding the employer of discrimination based on several factors, such as ascendency, age, gender, sexual orientation, gender identity, civil status, family set-up, financial situation, education, origin or social condition, genetic heritage, disabilities, chronic diseases, nacionality, ethnicity, place of birth, language, religion, political or ideological convictions, and union membership.

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Despite the inclusive and non-discriminatory perspective present in national laws, statistics from the National Statistics Institute (INE) show that migrant workers suffer higher unemployment rates (12.5%) than nationals (6.5%).

The professional occupations they have the opportunity to develop are also more precarious, with a wage gap of 5.8% less than that of nationals.

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Absence from work – absences from work, either justified or unjustified. As a general rule, justified absences do not entail loss of rights, particularly remuneration;

Salary – compensation for the work done by the employee. As a rule, it is paid monthly, with a minimum of 735 euros;

Dismissal – termination of the employment contract by the employer, always justified and in writing;

Compensation due to the employee for termination of contract amount that the employer pays to the employee whenever he/she is dismissed without complying with the legal requirements, varies between 15 and 45 days of remuneration for each year of work;

Compensation due to the employee for the termination of the contract amount that the employer pays to the employee whenever the contract terminates on his own initiative and justified under the terms of the law. It varies between 12 and 18 days of remuneration for each year of duration of the contract.

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