Working in Portugal

When working in Portugal, foreign workers have the same rights and duties as Portuguese workers.

Normally, the relationship between the employer and the worker is established by an employment contract, which may be written or verbal. The employment contract includes conditions for providing the service in terms of the rights and duties of both parties, particularly the remuneration the employer will pay the employee.

A written letter of appointment can also be concluded which must contain:

  • the identification, signatures and address or location of the parties;
  • an unequivocal statement by whoever promises to enter into the contract;
  • the work to be provided and the corresponding remuneration.

There will also be a probationary period in the initial stage of contracts of employment (variable according to type), during which both parties consider their interest in whether to maintain the contractual relationship or not.

The information in this section is organized as follows:

Types of employment contract

When a contract of employment is entered into between an employer and a worker it can take various forms, depending on the type of undertaking and the activity, and each have their own probationary periods:

Fixed-term contract of employment

The fixed-term contract of employment is a temporary contract, i.e. Its duration and termination are previously determined and established by the employer and/or worker according to an event or time period.

It is used in the following situations:

  • direct or indirect replacement of an absent worker or a worker who is temporarily prevented from working for any reason
  • direct or indirect replacement of a worker who is involved in proceedings determining the legality of a dismissal
  • direct or indirect replacement of a worker who has been assigned non-active status for personal reasons
  • replacement of a full-time worker who is converting to part-time work for a determined period
  • a seasonal or other activity whose annual production cycle is irregular
  • exceptional increase in the company’s activity
  • performance of non-permanent occasional task or particular service.

The duration of such contracts may not exceed two years, and they may be renewed up to two times, provided their duration is not greater than one year and the initial conditions of the company’s temporary need continue.

Contract of employment of unspecified duration

The contract of employment of unspecified duration is also a temporary contract, but its termination is dependent on an event the date of verification of which is uncertain or unknown from the outset.

This type of contract has a maximum duration of four years, on conclusion of which the worker is entitled to compensation.

Contract of employment of indefinite duration

The contract of employment of indefinite duration indicates that, contrary to fixed-term contracts, the connection does not have a stipulated end. Also known as a contract of employment of unspecified duration, it is marked by not having a fixed duration, since it is in force without a pre-established time-limit. It does not relate to a temporary need of the company.

Short duration contract of employment

Very short duration contracts of employment respond to an exceptional and substantial increase in activity of a company whose annual cycle is irregular due to the respective market, or due to structural reasons that cannot be addressed by its permanent structure, particularly seasonal activity in agriculture or tourism lasting no more than 35 days and not exceeding 70 days per calendar year.

The employer must notify the competent social security service of conclusion of the contract and the place of work by means of an electronic form containing the following information:
 

  • identification, signatures and address or location of the parties
  • activity of the worker and corresponding remuneration
  • date of commencement of the work.

 
In the event of failure to comply with the rules, contracts are understood to last for six months.

Part-time contract of employment

A contract of employment is said to be part-time when the normal period of weekly work is less than that for a full-time post in comparable circumstances. Collective regulation instruments may establish the maximum percentage of full-time hours for work to be classified as part-time.

Temporary work

A working relationship in which a temporary employment undertaking hires and pays a temporary worker, placing them to work in another organisation which hosts, exercises authority over and manages them by delegation.

The law does not establish a minimum duration for temporary contracts of employment.

Temporary contracts of employment follow the same rules as those for fixed-term contracts (unspecified or specified).

Provision of services

This is a type of contract which is used by self-employed workers with their own businesses who carry out services for different clients.

In these cases it is the workers – or service providers – who have the obligation to pay tax.

Information to be included in contracts

The employer must provide the worker with at least the following information regarding the contract of employment:

  • respective identification, particularly, in the case of a company, the existence of a corporate relationship, reciprocal shareholdings in affiliated undertakings and their location or address
  • place of work or, in the absence of a fixed or predominant place, an indication that the work will be carried out in various locations
  • category of the worker or a brief description of their duties
  • date of conclusion of the contract and beginning of its effects
  • foreseeable duration of the contract, if for a fixed period
  • duration of holidays or criteria for its determination
  • periods of notice to be observed by the employer and the worker for terminating the contract, or criteria for their determination
  • value and frequency of payment
  • normal daily and weekly working time, specifying cases in which it is defined in average terms
  • occupational accident insurance policy number and identification of the insurer
  • applicable collective labour regulation instrument, if any
  • identification of the employee compensation fund or equivalent mechanism, in accordance with specific applicable legislation.

National Minimum Wage

From 1 January 2021, the guaranteed minimum monthly remuneration (also known as National Minimum Wage) is €665.

Factors determining a worker’s remuneration

Remuneration is the payment the worker is entitled to in exchange for their labour and includes basic remuneration and other regular periodic payments in money or in kind, like health insurances, allowances or transportation expenses.

The value in kind (non-pecuniary remuneration) may not exceed the payment in money, unless otherwise provided for in a collective labour regulation instrument.

Working hours

The maximum limits of the normal working period are from 8 to 40 hours, per day and per week respectively.

Annual leave and holiday pay

In each calendar year the worker is entitled to a period of paid holidays, which expires on 1 January. The worker is entitled to a minimum of 22 working days’ holiday per year.

Entitlement to holidays is generally governed by work provided in the previous calendar year, but is not conditional upon attendance or effectiveness at work.

For holiday purposes, working days are deemed to be the days of the week from Monday to Friday, public holidays excepted. If the worker’s rest days coincide with working days, Saturdays and Sundays which are not public holidays are considered for calculating days of leave, rather than the former.

There are also special rules for ensuring this right, however. In the year of admission the worker is entitled to two working days’ holiday per month of the contract, up to 20 days, which may be taken after six full months of contract performance.

If the calendar year ends before the worker has completed the six months, holidays can be taken by 30 June of the following calendar year. In that year, however, no worker may take more than 30 working days holiday, unless this is allowed by the collective labour regulation instrument.

Holiday pay corresponds to what the worker would receive if he or she were actually at work.  In addition to this remuneration, the worker is entitled to holiday pay, comprising basic pay and other elements of pay.

Assistance services

For more information or if you need help, please contact Autoridade para as Condições de Trabalho (ACT):