Lisbon, May 6, 2026 (Lusa) - The Portuguese government, unions and employers' representatives, known as the social partners, are due to meet on Thursday to conclude negotiations on amendments to the draft labour law, with a general strike looming and prospects for a potential agreement through negotiations between them looking slim.

The business confederations have given the green light to the final proposal for an agreement, with the labour minister, Rosário Palma Ramalho, challenging the UGT (Socialist-backed General Workers' Union) to present a constructive and clear position by the time of the meeting.

The trade union federation led by Mário Mourão, has signalled that it will reaffirm its proposals to the government. Palma Ramalho said that, if no agreement is reached with the social partners, the bill to be submitted to the parliament will be based on the initial draft and the contributions that the government considers useful (made during the negotiation process), meaning it may not incorporate all the measures set out in the final proposal.

The following is a summary of the main changes outlined in the most recent version prepared for a possible agreement on labour reform, which, according to the document Lusa accessed, "do not bind any of the parties if an agreement is not reached".

+++ Amendment to the strike law +++

   1) Extension of essential services (by broadening the concept of essential social needs): the government insists on including care services for the elderly, the sick, people with disabilities and children in care within essential services in the event of a strike, abandoning the intention to also include the food supply sector and private security services for essential goods or equipment.

The Labour Code currently stipulates that, in the event of a strike, minimum services must be ensured in companies or establishments intended to meet essential social needs, which include postal and telecommunications services, medical, hospital and pharmaceutical services, public health (including the provision of funeral services), energy and mining services (including the supply of fuel).

 Also included are water supply, fire services, public services ensuring the provision of essential needs for which the state is responsible, transport, including ports, airports, railway and bus stations, relating to passengers, animals and perishable foodstuffs and goods essential to the national economy, covering the respective loading and unloading, the transport and security of monetary assets.

+++ Restricting trade union activities in companies where there are no 

+++ unionised workers +++

 The proposal stipulates 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 covers the company’s workers”. Micro-enterprises are excluded.

 Furthermore, regarding the display and distribution of trade union information, 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, meaning that, trade unions lose the ability to do so independently.

+++ Changes to employment contracts +++

   1) More situations in which fixed-term contracts may be entered into: The conclusion of a fixed-term contract is now permitted in the case of “work performed due to a formally declared state of emergency”, and during the first two years of a company’s operation, regardless of its size, whereas previously this was only permitted for companies with fewer than 250 employees.

This is also now permissible when hiring an employee who has never worked under an employment contract, who is long-term or very long-term unemployed, and when hiring those retired due to old age or disability.

   2) New rule for the renewal of fixed-term contracts: The proposal suggests that a fixed-term employment contract may be renewed up to three times.

Currently, the law stipulates that “a fixed-term employment contract may be renewed up to three times and the total duration of the renewals may not exceed that of the initial period”.

3) End of the 180-day probationary period for first-time employment: The aim is to repeal the provision in the Labour Code stipulating that, in the case of permanent employment contracts, a 180-day probationary period is mandatory for workers who are seeking their first job and are long-term unemployed.

Currently, the law provides for a 180-day probationary period in such cases, but allows for this to be "reduced or waived if the duration of a previous fixed-term employment contract, signed with a different employer, was 90 days or more".

+++ Changes to other types of employment contracts +++

For workers on casual work contracts who carry out other work during periods of inactivity, the remuneration received from that work will no longer be deducted from the compensation paid by the employer.

In secondment contracts, the employee is entitled to terminate the employment contract up to 30 days after the employer decides to end the secondment, but is only entitled to compensation if the secondment has lasted for at least six years.

+++ End of the rule prohibiting the combination of early retirement with 

+++ a salary from the same company +++

The government wants to put an end to the rule that prohibits those who take early retirement from returning to work at the same company for a period of three years.

According to Decree-Law No. 187/2007, "the accumulation of old-age pension with income from work is unrestricted", but "the accumulation of an early retirement pension, granted within the framework of flexibility, with income from work or activity, in any capacity, in the same company or group of companies, is prohibited for a period of three years from the date of access to the early retirement pension".

+++ Transfer of an employee to a lower category subject to tacit 

+++ authorisation by agreement and if the ACT (Authority for Working 

+++ Conditions) fails to respond within 45 days +++

The government intends to allow the transfer of an employee to a lower category to be subject to tacit authorisation, if the ACT fails to respond within 45 days, and subject to agreement between the employee and the employer.

Currently, the law provides for the transfer of an employee to a lower category by mutual agreement between the parties and "on the grounds of urgent need of the company or the employee”, but such transfer must be authorised by the ACT in case of a reduction in remuneration, with no fixed deadline for a response.

+++ TOIL (Time Off In Lieu) returns +++

The government is not abandoning the TOIL, albeit under a different name (“time off in lieu by mutual accord”), stipulating that “in the absence of a collective labour agreement” it may “be established by an agreement between the employer and the employee”.

In this context, it maintains that “the normal working hours may be increased by up to two hours daily and reach 50 hours weekly, with the increase limited to 150 hours annually and a reference period not exceeding four months”.

Furthermore, it repeals the group TOIL, stipulating that this “shall cease within one year of the entry into force of this law, unless, in the meantime, any event occurs that would terminate this form of TOIL”.

+++ Changes to overtime and working time exemptions +++

Following the CAP (Portuguese Farmers’ Confederation)'s proposal, it is established that the overtime limit may be extended from 200 hours to 300 hours annually, “by means of a collective labour agreement”.

In the case of micro-enterprises, where current law sets the limit per worker at 75 hours annually, it is provided that “this may be increased by 20% where there is an absence of more than 20% of the respective workforce”.

Furthermore, the situations in which working time exemption mechanisms apply are expanded, covering “the performance of administrative or management duties, or duties of trust, supervision, support to such officeholders, roles involving high technical complexity or functions essential to the operation of the company”.

+++ Micro-enterprises with 30 hours of compulsory annual training +++

In the latest version, the government has adjusted the number of hours of continuing training to which workers are entitled, setting 30 hours in the case of micro-enterprises, and maintaining the 40 hours annually for other enterprises.

In the initial draft presented on 24 July 2025, the government proposed halving the mandatory training hours in micro-enterprises to 20 hours annually.

In the case of fixed-term contracts lasting three months or more, the hours are proportional to the contract duration, and the same applies to part-time workers.

+++ Changes to the rules on dismissals +++

   1) There is no obligation to reinstate an employee who has been unlawfully dismissed: The government wishes to extend the option for employers to ask the court to “rule out reinstatement, based on facts and circumstances that would make the employee’s return seriously detrimental and disruptive to the company’s operations” to small and medium-sized enterprises.

Currently, this option applies to micro-enterprises or to employees holding management or executive positions.

“If the court excludes reinstatement, the employee is entitled to compensation, determined by the court between 45 and 60 days of basic pay and seniority allowances for each year or seniority fraction (…), which may not be less than the amount corresponding to six months of basic pay and seniority allowances”, the document to which Lusa had access said.

   2) Employees may once again waive their entitlements when dismissed: In the event of dismissal or termination of the employment contract, the employee may waive payment of the entitlements due by means of “a written declaration in the presence of a trade union representative acting on the employee’s behalf or, failing that, a works council member or, alternatively, when the declaration is certified by a notary in accordance with the law”.

   3) Restrictions on outsourcing following dismissals: While the government initially intended to repeal the provision imposing restrictions on outsourcing in the event of dismissals, in its latest proposal it acknowledges that the restriction applies “for six months following a decision on collective dismissals or dismissals due to the abolition of a post” in roles that fall within the scope of the company’s core business.

At issue is Article 338, paragraph A of the Labour Code, introduced as part of the Decent Work Agenda, which stipulates that “it is not permitted to resort to acquiring external services from a third party to satisfy needs that were previously met by a worker whose contract was terminated in the previous 12 months due to collective dismissal or dismissal due to job elimination”.

   4) The government wishes to increase compensation for collective dismissals from 14 to 15 days of remuneration for each year of service with the company.

+++ Government seeks to reduce criminal penalties for those who fail to 

+++ declare contracts to Social Security +++

The government wants to reduce the penalties imposed on employers who fail to declare the hiring of workers to Social Security, abolishing prison sentences and proposing that the maximum fine be lowered from €180,000 to €40,000.

Currently, if employers fail to declare a new hire within six months of the statutory deadline for such notification, generally within 15 days prior to the start of employment, they may face criminal charges carrying a prison sentence of up to three years or a fine of up to 360 days’ pay (up to €180,000).

+++ Self-employed workers +++

The threshold for a worker to be considered economically dependent is set to rise: Currently, a self-employed worker is considered economically dependent on a company (which entitles them to additional benefits) when they receive 50% of their income from a single client, but the government wants to raise this threshold to 80%.

+++ Ride-hailing (TVDE) digital platforms +++

The proposed revision of labour legislation includes the transposition of a European directive aimed at improving working conditions and protecting personal data for those working on digital platforms.

Article 12 of the Labour Code already provides some guidelines for proving the existence of employment contracts with digital platforms, but the government intends to introduce some changes.

Among these, it stipulates that the service provider must be in a situation of economic dependence.

+++ Remote working +++

It will be easier for companies to refuse remote working: The rule currently stipulating that an employer may only refuse a request for remote working made by an employee in writing and with due justification, as long as it is compatible with the role performed, is being repealed.

With this change, it will be easier for an employer to refuse an employee’s request for remote working.

The rule establishing that, when the proposal for remote working comes from the employer, the employee’s objection does not need to be justified and cannot lead to their dismissal or penalisation is also repealed.

The legal provisions relating to remote working will now apply, with the necessary adaptations, to other forms of remote work performed in a subordinate capacity, even if not under a relationship of economic dependence.

+++ Holiday and Christmas bonuses may be paid in instalments +++

Another of the various changes the government intends to introduce relates to the possibility of employees being able to, once again, choose whether they wish to receive their holiday and Christmas bonuses in instalments or in the traditional manner; however, this option is subject to an agreement between the employee and the employer.

+++ Government wants to introduce a continuous working day in the 

+++ private sector +++

The government wants to introduce a continuous working day in the private sector for workers with children under the age of 12 or, regardless of age, with a disability, chronic illness or cancer.

This proposal was not included in the initial draft but has since been added and provides that it may also apply to “an employee who, acting in place of the parents, lives with their grandchild, sharing meals and accommodation”.

“An employee wishing to work a continuous working day must request this from their employer in writing, giving 30 days’ notice and specifying the intended duration, within a limit of five years,” the document to which Lusa had access said.

However, while it was initially referred to as a “right”, the latest version makes its application conditional on whether it is “provided for in a collective bargaining agreement or, alternatively, through mutual agreement with the employer”.

+++ Parental leave can reach six months if shared between parents +++

Initial parental leave following the birth of a child may last up to six months (equivalent to 180 days) if, after the mandatory 120 days have been taken, both parents opt for a further 60 days to be shared between them.

Currently, the Labour Code stipulates that mothers and fathers are entitled to 120 days or 150 consecutive days of leave, which they may share after the birth, and which may be taken simultaneously by both parents.

Under the changes the government proposed, the initial parental leave may last six months if, after the mandatory 120 days, which may be shared between the parents, they opt for a further 60 optional days, shared in equal periods.

If this is not the case, the leave may extend to 150 days, with an additional optional period of 30 days on top of the mandatory 120 days, which may be divided between the parents or taken by just one of them.

The current Labour Code stipulates that the initial parental leave may last 180 days if the parents choose to take 150 consecutive days and “in the event that each parent takes, exclusively, a period of 30 consecutive days, or two periods of 15 consecutive days, following the mother’s mandatory period of leave”.

+++ The Government wants fathers to take 14 consecutive days’ leave 

+++ following the birth of their child +++

The total period of exclusive paternity leave remains at 28 days, to be taken within 42 days of the baby’s birth, but the government wants fathers to take 14 consecutive days immediately after the birth of their child, instead of the current seven.

The government’s proposal also removes the rule stipulating that the remaining days must be taken in blocks of at least seven days, no longer setting a minimum duration for the periods taken.

+++ Changes to parental allowance +++

Parental allowance remains at 100% of the reference pay for the first 120 days of leave, but changes apply in other cases.

If opting for 150 days’ leave, this allowance currently drops to 80%, but is 100% in the case of shared leave (if each parent takes at least 30 consecutive days or two periods of 15 consecutive days).

Under the proposal, the daily amount for this option would fall from 100% to 90% of remuneration.

As for the 180-day leave, for which payment currently ranges from 83% to 90% of the reference pay, depending on how it is shared, the government intends for it to be paid at 100%, if the additional 60-day period is taken “on a shared basis in equal periods by both parents”, that is, one month each.

+++ Changes to the rules on breastfeeding +++

In terms of breastfeeding, the government’s final proposal does not renounce its intention to limit the breastfeeding break (which amounts to a two-hour reduction in the daily working hours), maintaining the initial proposal which sets a two-year limit for this purpose.

However, unlike the initial proposal, which required a medical certificate to be submitted right from the start, the final version maintains the current system and states that such proof is only required if breastfeeding continues beyond the child’s first year of life. In that case, the certificate must be submitted every six months.

At present, no certificate is required until the baby is one year old, nor is any frequency specified for subsequent proof of breastfeeding, which is left to the employer’s discretion.

+++ Government wants to abolish pregnancy loss leave +++

The government maintains its intention to abolish pregnancy loss leave, but is incorporating it into the pregnancy termination leave.

Under this arrangement, the mother is entitled to a leave period between 14 and 30 days (the period is decided by the doctor), fully paid.

Meanwhile, the father, who under the initial proposal would have had to use the time off for dependants, will be entitled to take up to three consecutive days off.

Currently, the Labour Code stipulates that the mother may take three days’ leave in the event of a pregnancy loss, if she does not take the pregnancy termination leave.

Pregnancy loss leave may also be taken by the father, for up to three consecutive days, if the mother is taking the pregnancy termination leave.

On the other hand, the pregnancy loss leave requires only a statement from the hospital or health centre, whereas the pregnancy termination leave requires a medical certificate specifying the period of absence.

According to Social Security, the granting of this leave also depends on the employee having made contributions for at least six months and having a regularised contributory status.

+++ Changes to flexible working hours for workers with family 

+++ responsibilities +++

At issue is the right of parents living with children under the age of 12 or, regardless of age, with a disability or chronic illness, to work flexible hours; that is, to be able to choose, within limits defined by law, “the start and end times of the normal daily working period”.

The final proposal for the agreement stipulates that this must “be adapted, as far as possible, to the specific arrangements for organising working time arising from the nature of the worker’s duties, particularly in the case of night work or work usually performed at weekends and on public holidays”.

+++ Employment quotas for people with disabilities +++

The employment quota system for people with disabilities will now cover workers with a degree of disability of 33% or more, as opposed to the current 60%, facilitating their recruitment by private-sector employers and public-sector bodies.

When a company uses temporary agency workers or services provided by a sheltered employment centre that places workers with disabilities to fill a post at the beneficiary organisation, the worker with a disability placed in that role is also included in the headcount of the beneficiary organisation’s staff.

JMF/MYAL // AYLS

Lusa