Portugal's Legal Framework: How Employment Law Works
The Código do Trabalho: Portugal's Primary Employment Legislation
The Código do Trabalho (Labor Code) is Portugal's comprehensive employment law, enacted as Lei nº 7/2009 on February 12, 2009. This legislation governs nearly all aspects of employment relationships in Portugal, from contract formation through termination.
The Labor Code covers employment contracts, working hours, rest periods, leave entitlements, health and safety, dismissal procedures, collective bargaining, and worker representation. It applies equally to Portuguese nationals and international workers employed in Portugal.
Key characteristics of the Código do Trabalho:
- Worker-protective orientation - The Labor Code emphasizes worker rights and establishes strong protections against exploitation
- Detailed regulation - Specific provisions govern most employment situations, providing clarity and predictability
- Continuous evolution - Regular amendments respond to changing work conditions and EU directives
- Integration with collective agreements - Over 80% of Portuguese workers are covered by collective bargaining agreements that often exceed statutory minimums
You can access the complete Código do Trabalho (in Portuguese and English translation) through the Direção-Geral do Emprego e das Relações de Trabalho (DGERT) website.
Legal Hierarchy: Understanding the Structure
Portuguese employment law operates within a clear legal hierarchy. Understanding this hierarchy helps you know which rules take precedence when provisions conflict.
The legal hierarchy from highest to lowest authority:
- Portuguese Constitution - Establishes fundamental employment rights including the right to work, fair pay, working time limits, health and safety, non-discrimination, and strike rights
- Código do Trabalho - Primary statutory regulation governing employment relationships
- Collective bargaining agreements (IRCTs) - Agreements between employers/employer associations and unions that may provide more favorable conditions than the Labor Code
- Individual employment contracts - Cannot provide less favorable conditions than law or applicable collective agreements
- Internal company rules - Subject to all of the above
The "more favorable principle": Collective agreements and individual contracts can deviate from the Labor Code only if they provide more favorable conditions to workers. This means your employment contract cannot reduce statutory protections, but it can enhance them.
EU Directives and International Standards
Portugal's employment law incorporates numerous European Union directives, ensuring Portuguese workers benefit from EU-wide labor standards. Key transposed directives include:
- Employer obligation to inform workers of employment conditions (Directive 91/533/EEC)
- Protection of pregnant workers and new parents (Directive 92/85/EEC)
- Protection of young workers (Directive 94/33/EC)
- Parental leave framework (Directive 96/34/EC)
- Posting of workers (Directive 96/71/EC)
Portugal also implements International Labour Organization (ILO) conventions it has ratified, further strengthening worker protections.
Recent Reforms: The 2023 Decent Work Agenda
Understanding the Agenda do Trabalho Digno
In 2023, Portugal enacted the Agenda do Trabalho Digno (Decent Work Agenda) through Lei nº 13/2023, representing the most significant labor law reform in over a decade. This legislation introduced substantial enhancements to worker protections and work-life balance.
Major provisions of the 2023 reform:
Right to Disconnect:
Employers are now explicitly prohibited from contacting employees outside established working hours except in genuine emergencies. This provision strengthens work-life balance and prevents unpaid after-hours work expectations.
Enhanced Leave Entitlements:
- Mandatory paternity leave increased from 20 to 28 working days
- Expanded bereavement leave provisions
- Introduction of self-declared sick leave (up to 3 consecutive days, maximum 3 times per year, without requiring immediate medical certification)
Restrictions on Precarious Employment:
- Significant new restrictions on fixed-term contracts
- Legal presumption of employment relationship for digital platform workers (addressing gig economy concerns)
- Enhanced oversight of temporary work arrangements
Strengthened Overtime Protections:
- Increased compensation rates after 120 annual overtime hours
- Reinforced limits on maximum overtime work
Probation Period Reforms:
- Employers must inform workers of probation period terms within 7 days or the probation period is deemed excluded from the contract
- Reduced probation periods for workers with prior experience in similar roles
These reforms reflect Portugal's ongoing commitment to protecting workers while adapting to modern employment challenges including remote work, platform economy jobs, and work-life balance concerns.
Key Regulatory Authorities: Who Enforces Labor Law
Portugal's employment law framework is enforced and administered by three principal authorities. Each authority has distinct responsibilities. Understanding their specific roles helps you navigate employment issues effectively.
ACT - Autoridade para as Condições do Trabalho (Labor Inspectorate)
The ACT (Authority for Working Conditions) is Portugal's national labor inspectorate, responsible for ensuring employers comply with labor law in private sector employment.
What ACT does:
Information and Guidance:
ACT provides official guidance, frequently asked questions, downloadable forms, and explanatory materials on all aspects of Portuguese labor law. Their website (in Portuguese) is a primary resource for understanding employment rights and obligations.
Workplace Inspections:
ACT conducts workplace inspections to verify compliance with:
- Working hours and rest period requirements
- Employment contract regulations
- Health and safety standards
- Wage payment obligations
- Record-keeping requirements
ACT inspectors have broad legal authority to enter workplaces without prior notice, examine employment documents and payroll records, interview employers and employees, and review working time records.
Enforcement and Penalties:
When ACT identifies labor law violations, it can:
- Issue administrative penalties (fines) to employers
- Require corrective actions within specified timeframes
- Conduct follow-up inspections to verify compliance
- Refer serious cases to other authorities
Types of ACT inspections include:
- Scheduled inspections targeting specific sectors or issues
- Complaint-driven inspections following worker reports
- Follow-up inspections verifying corrective actions
- Thematic campaigns focusing on priority enforcement areas
How to File a Complaint with ACT
If you believe your employer is violating Portuguese labor law, you can file a formal complaint (queixa) with ACT through multiple channels:
Online:
Submit complaints through the ACT website portal with detailed information about the alleged violation.
In Person:
Visit ACT regional offices to file complaints. Staff can assist with the complaint form and explain the process.
By Phone:
Contact the ACT general information line for guidance on filing complaints and understanding your rights.
By Mail:
Send written complaints to the appropriate ACT regional office serving your workplace location.
What to include in your complaint:
- Your contact information
- Employer details (name, address, activity)
- Description of the violation (be specific)
- Supporting documentation (contracts, pay slips, correspondence)
- Dates and timeline of events
- Any attempts you made to resolve the issue
ACT complaint process:
- Complaint received and registered
- Initial assessment of complaint merit
- Investigation (may include workplace inspection)
- Finding determination
- Enforcement action if violations confirmed
- Follow-up to ensure compliance
Timeline: ACT does not provide specific timelines for complaint resolution as investigation complexity varies. Some complaints are resolved within weeks, while complex cases may take several months.
Anonymity: ACT allows anonymous complaints, though providing your contact information strengthens the complaint and allows ACT to request additional information if needed.
CITE - Comissão para a Igualdade no Trabalho e no Emprego (Equality Commission)
The CITE (Commission for Equality in Labor and Employment) is the specialized authority responsible for promoting gender equality in employment and preventing workplace discrimination.
CITE's primary functions:
Equality Oversight:
CITE monitors compliance with equal treatment legislation, investigating complaints of discrimination based on:
- Sex/gender
- Pregnancy and maternity
- Parenthood
- Marital status
- Sexual orientation
- Gender identity
Dismissal Opinion Requirement:
Portuguese law requires employers to obtain mandatory prior opinion from CITE before dismissing:
- Pregnant workers
- Workers who recently gave birth (up to 12 months)
- Breastfeeding workers
- Workers on parental leave or who recently returned from parental leave
This requirement protects workers during vulnerable periods from discriminatory dismissal. Employers who dismiss these protected workers without CITE opinion face significant legal consequences.
How the CITE opinion process works:
- Employer notifies CITE of intent to dismiss protected worker
- CITE requests information from both employer and worker
- CITE evaluates whether dismissal is discriminatory
- CITE issues binding opinion (favorable or unfavorable)
- Employer cannot proceed with dismissal if opinion is unfavorable
Filing discrimination complaints with CITE:
Workers who believe they experienced workplace discrimination can file complaints with CITE through their website or by mail. CITE investigates complaints and can:
- Issue recommendations to employers
- Require corrective actions
- Impose administrative penalties
- Refer cases to other authorities if appropriate
Gender pay gap monitoring:
CITE requires companies with 250 or more employees to report annual gender pay gap statistics and develop action plans to address disparities.
Segurança Social - Social Security Administration
Segurança Social (Social Security) is the public agency administering Portugal's social security system, including benefit programs and contribution collection.
Segurança Social responsibilities include:
Benefit Administration:
- Sickness benefits
- Maternity and paternity benefits
- Parental leave benefits
- Unemployment benefits
- Disability benefits
- Retirement pensions
- Family allowances
- Funeral benefits
Contribution Collection:
Segurança Social collects mandatory social security contributions from employers and employees, maintaining records of all contributions that determine benefit eligibility.
NISS Assignment:
Segurança Social issues the NISS (Número de Identificação da Segurança Social), Portugal's social security number required for all employment and benefit access.
Getting Your NISS
Every worker in Portugal needs a NISS before starting employment. The NISS is your unique identifier in Portugal's social security system and is required for:
- Employment contracts
- Social security contributions
- Benefit applications
- Healthcare access through the SNS
- Many government services
How to obtain your NISS:
Required documents:
- Valid passport or national ID
- Proof of residence in Portugal (residence permit, rental contract, or utility bill)
- NIF (Número de Identificação Fiscal - tax identification number)
Application process:
- Schedule appointment: Book an appointment at your local Segurança Social office through the online booking system or by phone
- Visit office: Attend your appointment with all required documents
- Submit application: Staff will process your application and verify your documents
- Receive NISS: You will typically receive your NISS immediately or within a few days by mail
Alternative: Employer application:
Some employers can request your NISS on your behalf during the hiring process. Confirm with your employer whether they will handle this process or if you need to apply independently.
Segurança Social Direta:
Once you have your NISS, register for an account on Segurança Social Direta, the online portal where you can:
- Check your contribution history
- Apply for benefits
- Update personal information
- Access official documents
- Schedule appointments
Legal Protections Against Retaliation
Portuguese law explicitly prohibits employers from retaliating against workers who:
- File complaints with ACT, CITE, or other authorities
- Exercise their legal rights
- Report workplace violations
- Participate in labor inspections or investigations
- Request information about their employment rights
Forms of prohibited retaliation include:
- Dismissal or threats of dismissal
- Demotion or salary reduction
- Changes to working conditions (schedule, location, duties)
- Denial of promotions or training opportunities
- Harassment or hostile work environment
- Any other adverse action motivated by the worker's exercise of rights
If you experience retaliation: Document all incidents thoroughly and file a complaint with ACT. Retaliation is a serious violation with substantial penalties for employers.
How Portuguese Labor Law Applies to Foreign Workers
Portuguese labor law applies equally to all workers employed in Portugal, regardless of nationality. International residents and expatriates have the same employment rights, protections, and obligations as Portuguese nationals.
This means you are entitled to:
- All protections under the Código do Trabalho
- Minimum wage guarantees
- Maximum working hour limits
- Rest period and leave entitlements
- Health and safety protections
- Protection against unfair dismissal
- Access to social security benefits (when contributions are made)
- Use of labor inspection and complaint mechanisms
No discrimination based on nationality: Employers cannot pay foreign workers less than Portuguese workers for comparable work, deny benefits based on nationality, or apply different working conditions based on national origin.
Work Authorization Requirements
While labor law protections apply equally, international workers must have appropriate work authorization to be legally employed in Portugal:
EU/EEA/Swiss nationals: Have right to work in Portugal without additional authorization beyond registering residence if staying longer than three months.
Non-EU nationals: Require work visa or residence permit with work authorization. Employers hiring non-EU nationals must verify valid work authorization.
Working without proper authorization exposes both the worker and employer to immigration law violations, though labor law protections still apply to work actually performed.
Complementary Legislation: What Else You Should Know
While the Código do Trabalho is the primary employment law, several complementary laws govern specific employment aspects:
Law no. 102/2009 - Governs occupational health and safety in detail, establishing employer obligations and worker rights regarding workplace safety.
Law no. 4/2007 (Código dos Regimes Contributivos) - Regulates social security contribution regimes and benefit eligibility including sickness, parenthood, and unemployment benefits.
Collective bargaining agreements (Contratos Coletivos de Trabalho) - Sector-specific or company-specific agreements negotiated between employers and unions, often providing enhanced protections beyond statutory minimums. Ask your employer which collective agreement, if any, applies to your employment. Your employer is legally obligated to inform you of applicable agreements.
Constitutional provisions - Articles 53-61 of the Portuguese Constitution establish fundamental employment rights that form the foundation for all employment legislation.
How Portugal's System Compares to Other Countries
Understanding how Portugal's employment framework compares to other systems provides helpful context:
Compared to other EU countries:
Portugal's employment law is highly protective by international standards, though consistent with broader European Union labor standards. Portugal's 22-day minimum annual vacation is typical for EU countries, but provisions like mandatory 13th and 14th month payments are less common elsewhere in Europe.
Compared to the United States:
Portugal provides substantially stronger employment protections than U.S. "at-will" employment. Portuguese workers have extensive dismissal protections, longer vacation entitlements, paid parental leave, universal social security, and stronger regulatory oversight.
Compared to the United Kingdom:
Portugal's system shares some structural similarities with the UK (both have national labor inspectorates, for example) but Portugal generally provides stronger statutory protections particularly regarding dismissal procedures, leave entitlements, and working time regulations.
Notable Portuguese characteristics:
- Mandatory 13th and 14th month payments (Christmas and vacation bonuses)
- Strong presumption in favor of permanent employment contracts
- Extensive prior approval requirements for dismissing protected workers
- High collective bargaining coverage (over 80% of workforce)
Practical Steps: Getting Started with Portugal's Labor System
When You Begin Employment in Portugal
1. Ensure you receive a written employment contract or written confirmation of essential contract terms within 60 days of starting work. Review carefully and ask questions about any unclear provisions.
2. Obtain your NISS (social security number) if you don't already have one. Visit Segurança Social offices with your passport, residence documentation, and NIF.
3. Verify your employer is making social security contributions on your behalf. You can check your contribution history through Segurança Social Direta.
4. Understand which collective bargaining agreement applies to your employment, if any. Your employer should inform you, and these agreements may provide enhanced rights.
5. Familiarize yourself with your workplace's internal regulations, which should be provided by your employer and must comply with all applicable labor law.
If You Encounter Employment Issues
1. Document everything. Keep records of employment contracts, pay slips, work schedules, correspondence with your employer, and any evidence of potential violations.
2. Raise issues with your employer first when appropriate. Many employment issues can be resolved through direct communication.
3. Consult appropriate authorities:
- Labor law violations → ACT
- Benefit or contribution issues → Segurança Social
- Discrimination concerns → CITE
4. Consider seeking legal advice from a Portuguese labor lawyer if issues are complex or serious. Some unions also provide legal support to members.
5. Be aware of time limits. Many employment law claims have deadlines for filing complaints or initiating legal action.