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New rules for labour contracts – part 1

by Dr. Eduardo Serra Jorge features@algarveresident.com

In his new monthly column, Lawyer Eduardo Serra Jorge from lawyers firm Eduardo Serra Jorge & Maria José Garcia – Sociedade de Advogados, R.L., will be addressing legal issues affecting foreign residents in Portugal.

Law n.º 23/2012 of June 25 introduced several changes to the Portuguese Labour Law (PLL).

This is the third alteration to the Portuguese Labour Code since 2009 and should only come into force on August 1, 2012.

The Portuguese Government says this legislative reform is based on three main pillars: to stimulate the economy, create more jobs and encourage competitiveness.

From all the changes now introduced in the recent law, we selected the ones we believe are the most important:

• When a fixed term contract is ended by the employer, the employee is entitled to payment corresponding to 20 days of one month of base salary and seniority payments for each full year.

This compensation is calculated according to the following criteria:

a) Monthly salary and seniority cannot exceed more than 20 minimum wages per year;

b) The total amount of the compensation cannot be higher than 12 times the monthly base salary and seniority or, if the limit above is applicable, 240 times the minimum wage;

c) The daily amount of base salary corresponds to a 30-day monthly salary;

d) If there are fractions of a year, then the compensation has to be calculated on a proportional basis.

• The daily work period must be interrupted for a resting break of at least one hour and cannot exceed two hours. The employee cannot work more than five consecutive hours. If the daily work period is higher than 10 hours then the employee cannot work more than six consecutive hours.

It is also possible to submit an application to the Portuguese public entity responsible for working issues (Autoridade para as Condições do Trabalho – ACT) asking for authorisation to reduce or completely exclude the resting break of the worker if he/she consents.

The employer needs to prove that it is more favourable to the worker or that it is justified by the specific activity carried out by him/her.

If ACT does not respond within 30 days following the application, you can consider it authorised.

• There is no need to send ACT the rota. It is enough to display it for everyone to see at the work place.

• There is no need to send the agreement on working hour exemptions to ACT.

Official holiday days

New Year’s Day, Good Friday, Easter Sunday, April 25, May 1, June 10, August 15, December 8 and Christmas Day.

Please note that this year all other holiday dates are still in force. The new official holiday days are only applicable from January 1, 2013 onwards.

• If the company is in operation during bank holidays and the employee has to works those days, he/she is entitled to an additional resting period corresponding to half of the hours they worked or to an additional 50% of the daily salary. It is the employer who decides whether to give an additional resting period or pay 50% of the daily pay rate.

• Bonuses for employees based on their attendance of one to three holiday days have ceased.

Lawyer Eduardo Serra Jorge can be contacted at his Faro office at Gaveto das Ruas Pedro Nunes e José de Matos, 5 R/C, on telephone +351 289 829 326, Fax. +351 289 829 327 or email: esjmjg@net.novis.pt. Alternatively, please visit www.esjmjgadvogados.com