New Financial Support Measure

With the publication of Ordinance number 323/2019, of September 19, which created the CONVERTE+ measure, employers are now granted access to temporary financial support for the conversion of fixed-term employment contracts into employment contracts with no fixed term.

This financial support, which is of transitional nature, has a value of four times the monthly basic salary provided in the permanent employment contract, up to a limit of € 3,050.32 (seven times the IAS).

Support may also increase by 10% when the conversion relates to a contract: (i) with workers with difficulties accessing employment (i.e. disabled person); (ii) relative to jobs located in economically disadvantaged areas.

Financial support may also increase by 30% in case of conversion of a fixed-term employment contract with a worker from the underrepresented sex in a particular profession (profession where there is no representation of 33.3% in relation to one of the sexes).

Along with the bonuses, which are cumulative, the amount of support can reach a maximum of € 4,575.48.

Applications are open until 18:00 of December 31 and must be submitted by employers through the “iefp online” portal using their management area.

Fixed-term employment contracts (certain or uncertain), which were agreed before the opening date of applications and whose conversion took place from September 21, 2019 inclusive, are eligible.

Able to apply for this measure are companies that have started: special revitalisation process under the Insolvency and Business Recovery Code (CIRE), recovery process under the Extraordinary Business Recovery Scheme (RERE), or process in the Extrajudicial Company Recovery System in progress prior to the entry into force of the RERE, and shall provide proof of this.

The following are prerequisites for the granting of the financial support: (i) The maintenance of the supported employment contract and of the employment level for a period of 24 months from the effective date of the non-supported employment contract; (ii) The remuneration provided in the supported employment contract must comply with the minimum wage guaranteed and, where applicable, the respective collective labour regulation instrument.

For the purposes of the application, the employer shall cumulatively meet the following requirements: (a) Be properly constituted and registered; (b) Fulfill the legal requirements to carry out the activity or provide evidence of having commenced the applicable proceeding; (c) Have the tax and contributory situation regularised before the Tax and Customs Authority and Social Security; (d) Is not in default of financial support granted by IEFP, IP; (e) Have the situation regularised regarding refunds in the context of FSE financing; (f) Have an organised or simplified accounting system as required by law; (g) Not have overdue salary payments (with the exception of companies that have started a special revitalisation process provided for in the Insolvency and Company Recovery Code, Extrajudicial Business Recovery Scheme or in process under the Business Recovery System via Extrajudicial); (h) Not have been convicted of a criminal or administrative offence for breach of labour law, including discrimination at work and access to employment, for the past three years; (i) Not have been convicted, within the two years prior to the application, of a judgment which has the force of res judicata for the illegal dismissal of pregnant women, mothers who have recently given birth or who are breastfeeding.

The financial support provided by CONVERTE+ is not cumulative with other direct employment support applicable to the same job.

Each application may cover up to 10 employment contracts.

The employer may submit several applications in the same application period.

By Dr Eduardo Serra Jorge
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Dr Eduardo Serra Jorge is founding member, senior partner and CEO of lawyers firm Eduardo Serra Jorge & Maria José Garcia – Sociedade de Advogados, R.L., created in 1987.
In his column, he addresses legal issues affecting foreign residents in Portugal.
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