Portugal Changes Labor Code in 2023

Portugal Changes Labor Code in 2023Effective May 1, 2023, Portugal’s labor code changed to align with the country’s Decent Work Agenda, place more value on young people in the labor market, and improve working conditions and work-life balance. The new rules apply to employment contracts entered into after May 1st and also to existing contracts (some exceptions and rules apply).


More comprehensive right to telework

The right to telework extends to parents of children with disabilities, chronic illness, or cancer, regardless of age. According to the new Article 166.A of the labor code, “The worker with a child up to three years of age or, regardless of age, with a child with a disability or chronic illness or oncological illness who lives with the worker under the same roof has the right to telework when it is compatible with the activity performed and the employer has the resources and means to do so.”

Teleworking expenses fixed in the contracts

According to the amendment to Article 168, “The individual employment contract and the collective employment contract must fix in the agreement for teleworking the amount of compensation due to the worker for additional expenses.”

If there is no agreement between the employee and the employer on the fixed amount, additional expenses are considered to be those that correspond to the “acquisition of goods and or services that were not available to the employee prior to the conclusion of the agreement” as well as “those determined by comparison with the employee’s yearly expenses in the last month of on-site work.”

Established limit for additional IRS-exempt expenses

The legislation defined a limit on telecommuting costs that are tax-exempt for companies. This limit will be defined in an ordinance. In practice, this means when a company has additional expenses, and if these expenses exceed the amount stipulated by the ordinance, the part exceeding this limit will be subject to IRS and Social Security taxation.


Sick Leave 

Request can be made through the SNS 24

Sick leave of up to three days can now be requested via the National Health Service’s digital service (SNS 24). These sick leaves, which are obtained under oath, can be requested up to twice a year for periods of up to three days and are not paid by the employer or Social Security.


Parental Rights

Part-time extended initial parental leave

If an employee opts for initial parental leave in excess of 120 days (e.g., 150 or 180 days), they may, after taking the first 120 days, combine the remaining leave with daily part-time work. This part-time leave period can be taken by both parents simultaneously or sequentially.

Father’s parental leave increases

Paternity leave increased from a mandatory 20 days + five optional days to mandatory 28 consecutive days + seven optional days. After taking this leave, the father is also entitled to seven days of leave, consecutive or interspersed, provided they are taken at the same time as the mother’s initial parental leave.

Part-time additional parental leave

Additional parental leave, which is intended for parents to provide care for a child or adopted child aged six years or less (which is why it is called complementary, as it complements the initial parental leave system), now includes a new alternative that allows for part-time work for three months, with a standard work period equal to half of full-time, provided that the leave is exercised in full by each parent.

Waiver created for adoption processes

Previously, only one exemption was provided for the adoption assessment process. The new Article 45 provides that this exemption will cover the entire adoption process. This dispensation will also be considered an effective provision of work, with no limit on the number of dispensations from work to go to Social Security.

Extension of adoption leave

The exclusive parental leave of the father is extended to the prospective adopter in the event of the adoption of a child under the age of 15. Adopters may also take up to 30 days of initial parental leave during the transition and monitoring period.


Leaves and absences

Extension of bereavement leave

Bereavement leave increased from five to 20 consecutive days for the death of a spouse, child, or stepchild. In the case of the death of other relatives or kin in the 1st degree in a direct line, the leave was extended to up to five consecutive days.

Absence due to gestational grief

Article 249, stipulating justified absences, now allows up to three days for gestational bereavement leave due to the baby’s death during pregnancy.


Informal caregivers

Possibility to work part-time or flexible hours

Workers recognized by Social Security as an ‘informal non-main caregiver’ may request the telework regime for a maximum period of four years, consecutive or not. To do so, the labor law requires that the referred status has been recognized by means of proof of the same. It is also only possible when the status is compatible with the activity performed and the employer has the resources and means to do so. Alternatively, informal caregivers can ask to work flexible hours.

Caregivers leave

An unpaid annual leave of five consecutive days was also created for caregivers. This leave must, however, be communicated to the employer ten days in advance, indicating the dates on which the employee intends to take it.

Protection in case of dismissal of care worker

The changes to the labor code determine that the dismissal of a caregiver requires a prior opinion from the competent entity in the area of equal opportunities between men and women (CITE). Dismissal for reasons attributable to a caregiver is presumed to be without just cause.


Other Measures

Temporary employment contracts with limitation

The maximum number of renewals of fixed-term temporary employment contracts were reduced from the current six to four as of April. In addition, after four years of temporary assignments by temporary work companies or another of the same group, these companies are obliged to integrate the workers into the workforce. In other words, they must offer these workers an employment contract.

Overtime value increases

The amount paid for overtime increased to 100 hours per year. Pay is 50% for the first hour or fraction thereof and 75% per hour or fraction thereafter. On weekly rest days or holidays, payment is 100%.

Increased compensation for termination of contracts

Employees must receive 24 days (up from 18) of basic salary and seniority (per full year of seniority) compensation if a fixed or uncertain term contract is terminated.

In the case of collective dismissal, by the termination of a job, or by inadaptation, 14 days (up from 12) of the base salary and seniority (per full year of seniority) are counted.


VISAVIS provided this article about Portugal’s labor code changes in 2023. If you need support with your employee benefits in Portugal, please contact Asinta, and we will put you in touch with VISAVIS.