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Meet The Law | Employment & Pensions

Legislative proposal no. 120/xii (2.ª) / replacement text (PSD/CDS-PP)

08/07/2013

5th July, it has been approved by the plenary session no. 107 the replacement text of the legislative proposal no. 120/xii (2nd) of the social security and labour commission which amends the compensation amount due by the termination of the employment contract.

I. Legislative amendment

The wording of the Legislative Proposal, that reduces the amounts of the legal compensations due by the termination of employment contract from 20 to 12 days per each year of seniority, was approved, with the replacement text wording proposed by PSD/CDS-PP.

In compliance with the previously settled between the Government and Troika, the new limits for the compensation due by the termination of employment contract must be approved by the Parliament, in order to be inforcable in October.

Once the new Law become in force, after its approval, the formula to calculate the employees' compensations, in case of dismissal, as well as in case of expiration of contracts with term, shall change, and in some cases, depending on the employees' seniority, the calculation of the compensation amounts may include 4 different regimes.

As it happens currently, since August 2012, the final amounts of the new calculation formula will be subject to a minimum and a maximum limit of compensation due by the termination of the employment contract.

The approved proposal shall be sent to the Social Security and Labour Commission where it will be discussed in detail. In the future, there will be, again, two formulas to calculate the compensation, one in case of expiration of the contract with term and another one for cases of termination of the permanent employment contract - collective dismissal, extinguishment of the job position, dismissal due to non-adjustment.

Please check the PDF for more detailed information

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Meet The Law | Employment & Pensions
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Authors

Susana Afonso
Susana Afonso
Partner
Lisbon