COUNTRY

Employment contracts in Portugal can be either written or verbal. They must be in the local language and contain at least these terms:

• workplace,

• probation period,

• salary,

• working hours,

• termination details,

• notice period,

• employee’s duties, and

• signatures of both parties.

Some of the common types of contracts are:

• fixed-term employment contracts, which cannot be more than three years,

• permanent or indefinite-term contracts,

• contracts of unspecified duration to replace an absent employee,

• short-duration contracts for seasonal or event work lasting no more than 70 days,

• intermittent contracts for full-time, irregular work, and

• part-time contracts where working hours are less than regular working hours.

The standard work period in Portugal is 40 hours a week and eight hours a day. Limitations on work hours and overtime depend on the size of the business and may be governed by collective bargaining agreements. However, overtime is limited to no more than 150 hours a year for large businesses and 175 hours a year for smaller operations. Overtime is paid at a percentage over the regular wage for the first hour and higher for the following hours. Overtime on a Sunday or holiday is paid at a percentage over the daily wage.

Employees receive up to 1,095 days of sick leave in Portugal, paid by the social security system. The pay is generally at a fraction of the employee’s salary after a three-day waiting period. The percentage increases after day 30, day 90 and day 365.

Female and male employees in Portugal are entitled to initial parental leave for the birth of a child of 120 or 150 days, which can be extended for another 30 days. The 30-day extension can be taken by one parent or shared in consecutive 15-day increments by both parents. The pay rate varies from 80% to 100% of the employee’s salary. Female employees must take at least six weeks of leave following the birth and can take up to 30 days of leave before the birth. The male employee must take a leave of 20 working days, consecutive or not, within six weeks of the birth of the child, five days of which must be taken immediately after the birth.

The Christmas bonus in Portugal is equal to one month’s salary and must be paid by Dec. 15 each year.

Employees receive 22 days of paid annual leave in Portugal after one year of service. In the first year of an employment contract, employees receive two days of leave for each month of service up to 20 days. The leave can only be taken after completing six months of service. If the calendar year ends before the first year of employment, leave can be carried over into the next year and used by June 30 but no more than 30 days of leave can be used within a calendar year. Some collective bargaining agreements provide additional leave. Employees with a fixed-term contract receive two days of vacation a month up to 20 days. Accrued but unused vacation leave must be paid upon separation of service.

In Portugal, the public holidays are:

• New Year's Day

• Good Friday

• Easter Sunday

• Liberty Day

• Labor Day / May Day

• Corpus Christi

• Portugal Day

• Assumption of Mary

• Republic Day

• All Saints' Day

• Restoration of Independence

• Feast of the Immaculate Conception

• Christmas Day

Portugal provides universal healthcare and employers must enroll employees in the healthcare system. Employers also offer supplementary private healthcare insurance.

Employment contracts in Portugal may be terminated at the end of the contract term (if for a fixed duration), by the employer, by the employee, or by mutual agreement between the parties. Employers can terminate an employment contract for just cause or misconduct by the employee, pursuant to a collective dismissal, for redundancy, or failure of the employee to adapt to the job. An employer may terminate an employee for misconduct without paying severance. While notice is not required when dismissing an employee for misconduct, employers must follow certain procedures, which include initiating action within 60 days of learning about the issue, notifying the employee in writing about the reason for dismissal and allowing the employee to respond.

Employers must provide notice:

• 15 days for employees with less than one year of service,

• 30 days for employees with one to five years of service,

• 60 days for employees with five years to 10 years of service, and

• 75 days for employees with more than 10 years of service.

Employers must also pay severance. Severance is generally 12 days of wages for every year of service but may be higher if the termination was unlawful.