Government support for business and workers in Portugal

The most relevant employment related measures taken by the Government arising from the COVID-19 pandemic situation are the following:

A.    Extraordinary support in order to maintain job positions and minimize corporate crisis situations (so called “layoff simplificado”)

It is possible for a company to resort to the simplified lay-off regime if, due to the COVID-19 context, the company is found in a corporate crisis situation.

The following three situations (they are not cumulative) are considered a business crisis situation:
a)    Companies or establishments/business units whose total or partial closure was ordered by the political or health authorities;
b)    When there is the total breakdown of the company/undertaking’s activity, resulting from:

• The interruption of the global supply chains
• The suspension or the cancellation of orders;

c)    When there is an abrupt and sharp drop in 40% of the company’s turnover, the period of thirty days prior to the request, with reference to the average of the two months prior to that period, or to the same period of the previous year. For companies who have initiated their activity in the last 12 months, the average turnover should be considered.

The employer can choose between:

• Suspending the employment contract(s); or
• Reducing the employees’ working hours, in accordance with the general layoff regime, provided for in the Labour Code.As regards the duration:
• Initial duration: 1 month, maximum
• Extension: monthly, up to a maximum of 3 months

B.    Extraordinary support for occupational training purposes

It consists in the extraordinary support for part-time occupational training, through a training program, aimed at maintaining the job positions and strengthening the employees’ competences, therefore preventatively avoiding dismissals.

It is possible to request the support when the employer did not request the extraordinary support referred to in A.

As regards the duration, it corresponds to 1 month, but the workload may not exceed 50% if the employee’s normal working period.

A.    Extraordinary support in order to maintain job positions and minimize corporate crisis situations (so called “layoff simplificado”)

The concerned employees are entitled to a financial compensation, as follows:
a.    2/3 of their gross monthly salary:

• With a minimum threshold of 1 minimum salary (€ 635);
• With a maximum limit of 3 minimum salaries (€ 1,905).

This compensation is co-financed by the Social Security, as follows:
a.    30% of the gross amount paid by the employer;
b.    70% of the gross amount paid by the Social Security.

B.    Extraordinary support for occupational training purposes

The financial compensation is defined in accordance with the attended training, up to a maximum of 50% of the employee’s gross monthly salary, with a maximum limit of the minimum salary (€ 635).

All employers who are found in a business crisis situation, as referred to above, and the respective employees.

A.    Extraordinary support in order to maintain job positions and minimize corporate crisis situations (so called “layoff simplificado”)

After hearing the respective union representatives and works councils (as applicable), the employer must notify the employees of its decision to proceed with this extraordinary support and indicate the foreseeable duration.

This decision must also and immediately be notified to the Social Security authorities along with the documentation that supports the company’s crisis and the list of concerned employees (containing each respective Social Security number).

The notification to the Social Security authorities is made through an official form, available at the official website (Segurança Social Direta).

The competent authorities may request further evidence to prove the business crisis situation.

B.    Extraordinary support for occupational training purposes

The employer must notify the employees of its decision to initiate the training plan, with indication of the foreseeable duration, and must immediately notify the training authority (IEFP, I. P).

No, apart from the ones already described.

Yes. If the extraordinary support created by the Government is requested, no dismissals can occur during the measure and for 60 days following its execution, under penalty of having to return all financial support.