From remote working to holiday pay, the other side of the labour law reform

Among the more than 100 changes that the Government wants to make to labour legislation are not only the most critical and media-friendly measures – such as the extension of fixed-term contracts and the limitation of breastfeeding leave – but also changes that have received less attention and concern, in particular, teleworking, digital platforms, domestic work and even training.

The package as a whole has prompted the first joint general strike in 13 years by the UGT and CGTP, the country’s two largest trade union confederations, this Thursday.

The intention to revise the Labour Code had already been announced by Luís Montenegro’s first government, and the process was put into practice at the end of July. It was then that the draft bill ‘Trabalho XXI’ (Work XXI) was approved by the Council of Ministers and presented to the Social Dialogue, providing for more than a hundred changes to the Labour Law.

Among the proposals are some that have attracted greater attention and are considered particularly serious by trade unions. But there are also others that, although they have already been reported, have not received as much press coverage. On the day that workers stop work in protest against this package, ECO explains this lesser-known side of the labour law reform.

Easier refusal of teleworking

If the Government’s proposal is approved, it will be easier for companies to deny teleworking to their employees.

Today, when the job is compatible with teleworking, if the employee proposes an agreement, the employer can only refuse it by giving a reason. But the draft labour law reform eliminates this requirement. According to lawyers consulted by ECO, this means that it will be easier for employers to refuse teleworking to an employee.

On the other hand, it is currently stipulated that when the proposal for a teleworking agreement comes from the employer, “the employee’s opposition does not have to be justified”. This principle also disappears with the Government’s proposal, which could open the door for employers to require employees to justify any refusal to telework.

Socialist Party (PS) MP Miguel Cabrita warned that without this safeguard, “people may be pressured to accept teleworking when it is in the interests of companies and not their own”.

Christmas and holiday bonuses paid in twelfths

This is one of the measures on which the Government has already backtracked (partially). In July, the proposal on the table was that the Christmas bonus should be paid by 15 December each year or in twelfths with the monthly salary, if this is the express wish of the employee. It was also envisaged that the holiday bonus could be paid in twelfths together with the monthly salary, if this is also the express wish of the employee.

In the document sent more recently to the social partners, the Executive replaced the expression “if this is the express wish of the employee” with the requirement that an agreement be reached between the parties for the allowances to be paid in twelfths.

With this new model, the Government is reviving what had been created in 2003 but was eliminated when the troika was in Portugal.

Changes for the self-employed

The labour law reform proposed by the Government will not only have an impact on the lives of employees. Changes are also in the pipeline for the self-employed.

The Government wants to raise the bar for what constitutes economic dependence. Currently, a self-employed worker is only considered economically dependent when at least 50% of their activity is linked to a single beneficiary. The draft bill under discussion provides that economic dependence will be considered to exist whenever the worker obtains 80% of their annual income from a single beneficiary.

This change has various consequences for the lives of self-employed workers. For example, only economically dependent workers have access to the cessation of activity allowance.

Accumulating pension and salary

This is one of the measures that was not included in the draft bill presented in July but was introduced in the latest version of the proposed revision of the labour law: the Government wants to eliminate the rule that prohibits the accumulation of early retirement with salary.

Currently, it is prohibited to accumulate early old-age pensions, granted under the flexibility scheme, with income from work or activity, in any capacity, in the same company or business group, for a period of three years from the date of access to early retirement.

However, the Government wants to eliminate this rule, thus accepting one of the proposals of the Portuguese Business Confederation (CIP).

Failure to declare domestic work is no longer a crime

Since 2023, with the entry into force of the Decent Work Agenda, failure to declare workers is a crime, a rule that has led thousands of domestic workers (mostly women) to enter the system for the first time over the last two years.

However, the government is proposing to repeal this rule, which has already been strongly criticised by former Labour Minister Ana Mendes Godinho, notably in the Trabalho by ECO podcast ‘Trinta e oito vírgula quatro’.

“The aim was to send a very clear signal that it is unacceptable for anyone to work for someone else without having social protection associated with that work. It was a historic step forward. Why eliminate a measure that has had such a positive effect in terms of protecting tens of thousands of workers, without first assessing its quantitative impact?”, asked the former minister.

Waiving labour credits without going to court

One of the victories of the left in the Decent Work Agenda was the guarantee of payment of credits owed to workers, such as holiday or Christmas bonuses, when they are dismissed or their contract ends, unless the employee waives this right in court.

However, the Government wants to allow workers to waive these rights through a declaration recognised by a notary.

“Workers’ credit is not subject to extinction by waiver, except in cases where the worker expressly declares their waiver in a written statement recognised by a notary in accordance with the law”, reads the draft bill. Trade unions strongly criticise this intention of the Executive.

Continuous working hours in the private sector

This is another measure that was not included in the draft bill presented in July but was introduced in the most recent version of the proposed revision of the labour law: the Government wants to include in the law the possibility of continuous working hours in the private sector, similar to what is already included in the law on public sector work.

Continuous working hours is a system that allows employees to work without interruption (except for a maximum rest period of 30 minutes) so that they can leave work earlier (up to one hour).

In the private sector, if the Government’s proposal goes ahead, continuous working hours will be a right for workers with children under the age of 12 or, regardless of age, with children with disabilities, chronic illnesses or cancer “who live with them in the same household”.

Training: identify the differences

In July, the Government proposed that micro-enterprises should have a reduced obligation with regard to the number of training hours they must guarantee their employees per year, from the current 40 hours to 20 hours. However, in the most recent document, this measure has been eliminated.

On the other hand, the new proposal provides some clarifications that impact the lives of those who work part-time or have just signed a new employment contract.

As for the former, the Ministry of Labour document clarifies that the 40 hours provided for full-time workers should not apply, but instead, the number of hours should be proportional to the contracted working time.

On the other hand, the Government’s new proposal clarifies that, in the years of admission and termination of the contract, the worker is entitled to a number of training hours proportional to the duration of the contract during that same year, and not to 40 hours.

Trade unions find it more difficult to enter companies

With the ‘Work XXI’ draft bill, the Government also wants to introduce new limits on the activities of trade unions in companies where there are no unionised workers.

The Labour Code has long stipulated that workers and trade unions have “the right to carry out trade union activities in the company”. However, there was a long-standing debate about cases where there are no trade union representatives in the company, until, in 2023, with the entry into force of the Decent Work Agenda, the issue was clarified.

Since then, the law has stipulated that rights relating to meetings in the workplace, use of facilities and posting of trade union information apply “equally to companies where there are no workers affiliated to trade unions”, with the “necessary adaptations”.

The Government now wants to eliminate this rule, but intends to introduce amendments to other articles of the Labour Code, which ensure that trade unions will continue to be able to enter these companies, albeit with increased restrictions.

In the case of workplace meetings, trade unions can currently call meetings either during the working hours of most workers or outside working hours. The Government’s proposal, however, establishes that in small, medium and large companies without unionised workers, trade unions may only call meetings outside working hours and “provided that the subjective, objective and geographical scope of the trade union association covers the company’s workers”.

On the other hand, with regard to the posting and distribution of trade union information, it is now stipulated that trade union representatives have the right to do so on company premises and in “an appropriate place provided by the employer”. In this case, the Government proposes that, in companies where there are no unionised workers, trade unions “whose subjective, objective and geographical scope covers the company’s workers” may request the employer to display or allow the display of the information in question.

New rules for working on digital platforms

Since May 2023, the Labour Code has opened the door for couriers to be considered dependent workers, provided that there is evidence of subordination. The Government’s proposed revision of the labour law does not eliminate this mechanism, but reformulates it.

Firstly, it is defined that the mechanism only applies when the courier works for the platform in question on a regular basis and when at least 80% of their activity is linked to that beneficiary (i.e. they are in a situation of economic dependence).

On the other hand, couriers are now included in the mechanism of presumption of employment contract applicable to the labour market in general, adding to the general signs of subordination others adapted to this specific reality.

Specifically, the indicators specifically designed for work on digital platforms are as follows: the determination of periods of work or absence by the beneficiary of the activity, restrictions on the freedom to accept tasks by the activity provider, limitation on the use of subcontractors or substitutes by the activity provider, and the choice of clients by the beneficiary of the activity.