Cessation of a contract of employment

End employment contract

A contract of employment may cease by:

In the event of termination of the contract of employment by the employer, the worker has the right to compensation, paid out of the undertaking’s assets.

Cessation by expiry

There are three reasons for the expiry of a contract of employment:

  • its termination
  • the absolute and definitive impossibility for the employee to perform his or her duties or for the employer to accept them
  • the retirement of the employee, by old age or due to invalidity.

Cessation by termination

The worker may stop the effects of the termination agreement if their signature on the latter has not been authenticated by a notary by the seventh day following the date of its conclusion by means of a written communication addressed thereto.

If it is not possible to ensure receipt of this communication, the employee must resubmit it to the employer by registered letter with proof of delivery on the working day subsequent to the end of that time limit.

If the employee has been paid financial benefits in compliance of the agreement or due to the cessation of the contract of employment, he or she must make all such benefits in any form available to the employer.

Dismissal attributable to the worker

Whenever a worker's wrongful conduct, due to its severity and consequences, makes it immediately and practically impossible to maintain the working relationship, there is just cause for dismissal.

The following conduct, among others, can be cited:

  • unlawful failure to obey orders given by superiors
  • infringement of the rights and guarantees of company employees
  • repeated provocation of conflicts with company employees
  • repeated lack of interest in exercising due care to fulfil obligations connected with the performance of their post or job
  • serious harm to the financial interests of the company
  • false statements to justify shortcomings
  • unjustified absences from work which lead to severe losses or risks for the company, or the number of which reach 5 consecutive or 10 intermittent absences in each calendar year, independent of loss or risk
  • culpable failure to observe occupational health and safety rules
  • commission within the company of physical violence, defamation or other offences punishable by law, or kidnapping, or in general offences against the freedom of a company employee, a member of the executive management or an individual employer who is not a member of the latter, their delegates or their representatives
  • failure to comply or opposition to compliance with a legal or administrative decision
  • abnormal reductions in productivity.

Collective dismissal

Collective dismissal occurs as a result of termination of the contract of employment by the employer, within a three-month period covering either at least two or five employees, if the company is respectively a micro company (up to 9 employees), a small company (from 10 to 49 employees), an average-size (from 50 to 249) or large company (over 250 employees).

It also occurs whenever it involves the closure of one of more sections or equivalent structures or a reduction in the number of employees on market, structural or technological grounds.

Dismissal for redundancy

Dismissal for redundancy is regarded as the termination of a contract of employment brought about by the employer on the basis of that redundancy when it is due to market, structural or technological reasons in relation to the company.

Dismissal for unsuitability

Dismissal for unsuitability is regarded as the termination of a contract of employment brought about by the employer on the grounds of the worker’s unsuitability to the post.
Unsuitability arises where, because of the way the worker performs their duties, it becomes virtually impossible to maintain the working relationship in any of the following circumstances:

  • continued reduction in productivity or quality
  • repeated breakdowns in the resources allocated to the post
  • risks to the safety and health of the worker, other workers or third parties.

Unsuitability of a worker appointed to a technically or managerially complex post also arises when they do not fulfil the objectives previously agreed in writing because of the way they perform their duties and it is virtually impossible to maintain the working relationship.

Such situations do not affect the protection granted to workers with reduced capacity for work, a disability or chronic illness.

The situation of unsuitability must not arise because of a lack of health and safety conditions attributable to the employer.

Termination by the worker

The worker must give notice of their intention in writing, briefly setting out the facts in justification, within 30 days of becoming aware of those facts. If the grounds are the need to comply with legal obligations which are incompatible with continuation of the contract, the worker must notify the employer as soon as possible.

In the event of failure to ensure prompt payment of remuneration for a period of 60 days, or when the employer, at the worker’s request, declares in writing the likelihood of non-payment of the unpaid earnings by the end of that period, the period (30 days) for giving notice of resolution is counted from the end of the period of 60 days or from the employer’s declaration.

If there is just cause the worker may terminate the contract of employment with immediate effect. The following conduct by the employer can be listed as examples of just cause:

  • failure to pay remuneration
  • negligent breach of the worker’s legal or agreed guarantees
  • application of an abusive penalty
  • culpable failure to ensure occupational safety, hygiene and health
  • negligent damage to the worker’s financial interests
  • punishable injury to the physical or psychological integrity, freedom, honour or dignity of the worker, perpetrated by the employer or his or her representative.

The following also constitute just cause for the worker to terminate the contract:

  • need to comply with legal obligations which are incompatible with continuation of the contract
  • substantial and lasting change to the working conditions in the employer’s lawful exercise of powers
  • failure to ensure timely payment of remuneration.

Lack of timely payment of remuneration which continues for a period of 60 days is considered to be negligent when the employer, at the worker’s request, declares in writing the intention not to pay the unpaid remuneration by the end of that period.

Assistance services

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