Law No. 13/2023 determined several amendments, not only to the Labour Code, but also to other legal diplomas, such as the regime of labour administrative offences, the law that regulates temporary work, and the decree-law that governs domestic service.
As a rule, most labour amendments came into force on 01 May 2023.
There are, up to 30/04/2023 and in short, three reference periods for the purposes of calculating compensation for collective dismissal:
(1) Until 31/10/2023: 1 month of base retribution and “diuturnidades” (seniority pay) for each full year of contract;
(2) Between 01/11/2012 and 30/09/2013: 20 days of base salary and seniority for each full year of contract;
(3) From 01/10/2013 until 30/04/2023:
(a) 18 days of base pay and seniority pay for each full year of seniority, for the first 3 years of contract;
(b) 12 days of base pay and seniority pay for each full year of contract in the following years;
(c) The provisions of paragraph (a) apply only in cases where the employment contract, on 01/10/2023, has not yet reached a duration of 3 years.
From 01/05/2023, and in respect of the period of duration of the contract counted from that date, the amount of compensation payable to the employee in the event of collective dismissal or redundancy is increased to 14 days of basic salary and seniority payments for each full year of contract.
This new rule only applies to the duration of the employment contract after 01/05/2023.
It should be noted that the compensation due to the employee also obeys the above mentioned calculation rule in other cases of termination of the employment contract, namely: (i) dismissal for inadaptation; (ii) termination of the employment contract due to the death of the employer or the insolvency and recovery of the company; (iii) termination of the external service commission; and (iv) termination of the employment contract following the transfer of the establishment.
As regards fixed-term employment contracts (whether fixed or uncertain), the compensation due for termination was increased to 24 days of basic salary and seniority payments for each year of contract.
It should be noted that previously, in the case of fixed-term employment contracts, this compensation was fixed at 18 days of base pay and seniority per each full year; and in the case of contracts for an uncertain term, the compensation corresponded to 18 days of base pay and seniority per full year of contract, in the first 3 years of duration of the contract, and 12 days of base pay and seniority per full year of seniority, in the subsequent years.
For further information regarding the calculation of compensation for termination of employment contract in Portugal or on any other employment related matter, please contact the Portuguese Employment Law Department at Belzuz Abogados.
Belzuz Abogados SLP
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