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Meet the Law | Decree-Law no. 27-B/2020, June 19

Following the approval of the Economic and Social Stabilisation Programme, Decree-Law no. 27-B/2020 was published June 19, 2020, extending the extraordinary support for maintaining employment contracts in a business crisis situation and creating other employment protection measures.

Accordingly, the following is determined:

1.    Until when can companies benefit from the extraordinary support for maintaining an employment contract in a business crisis - simplified lay-off?

Companies that have not made use of the extraordinary support for maintaining an employment contract in a business crisis up to this date are limited to submitting their initial applications until  June 30, 2020, in which case they may extend the application of the measure on a monthly basis up to a maximum of 3 months.

Companies and establishments that are subject to the duty to close facilities by legislative or administrative determination from a governmental source, within the scope of the COVID-19 disease pandemic, will now be able to access or maintain the right to extraordinary support for the maintenance of a work contract in a business crisis situation, as well as the respective extension, for as long as this duty is maintained. In these situations the 3 months limit does not apply.

It is also clarified that companies that have made use of the simplified lay-off scheme and have reached the limit of renewals - 3 months - up to June 30, 2020 will be able to benefit from the extension of this support until July 31, 2020.

2.    What is the stabilization supplement and how is it carried out?

The stabilisation supplement is one of the measures consisting in the payment of a cash benefit to employees whose basic salary in February 2020 was equal to or less than 2 times the national minimum wage ("NMW") and who, between April and June, was covered by at least 1 full calendar month by the simplified lay-off scheme or by the lay-off provided for in the Labour Code.

This supplement corresponds to the difference between the declared basic salary (that figures in the salary statements submitted up to July 15, 2020) for the month of February 2020 and the full calendar month in which the employee was covered by one of the layoff schemes referred to above in which the greatest difference was found, without prejudice to the minimum limit of EUR 100.00 (one hundred euros) and the maximum limit of EUR 351.00 (three hundred and fifty-one euros).

The payment of the support will be in charge of Social Security and will occur in July 2020, being granted automatically.
For this purpose, it is recommended to all employees have direct social security and make sure all personal data is up-to-date.

3.    What and how is the Extraordinary Incentive to normalize business activity?

Employers who have benefited from the simplified lay-off scheme or the extraordinary training plan may still benefit from an extraordinary incentive to normalize the business activity, which will be granted in one of the following ways:

a)    One NMW support per employee covered by the simplified lay-off or extraordinary training plan, paid on-off; or
b)    Two NMW per employee covered by the simplified lay-off or extraordinary training plan, paid in stages over six months.

Thus, if the simplified lay-off scheme or the extraordinary training plan has lasted more than 1 month, the amount of support is determined according to the average number of employees covered by each month of application of that support.
If the duration was less than 1 or 3 months, the amount of support shall be reduced proportionally.

In situations where employers make use of the support referred to in point b) above, they are entitled to partial remission of 50% of the social security contributions payable by them, on the following terms:

•    During the first month of granting the support when it is granted following the application of the simplified lay-off or the extraordinary training plan for a period of 1 month or less;
•    During the first 2 months of granting support where this is granted following implementation of the above measures for a period of more than one month and less than 3 months;
•    During the first 3 months of granting support where support is granted following implementation of the above measures for a period of 3 months or more.

This Decree-Law also provides for total exemption from the payment of social security contributions by the employer in respect of employment contracts for an indefinite period of time that have been concluded whenever:

i.    In the 3 months following the end of the support referred to in point b) above, employment contracts of indefinite duration have been signed with employees in a higher number than that observed, on average, in the three homologous months;
ii.    Provided that the employer maintains the level of employment achieved for a period of 180 days.

4.    What should companies be aware of?

During the period of granting of the incentive, and within 60 days thereafter, employers are prohibited from terminating employment contracts under the terms of collective dismissal, extinguishment of job position, dismissal for maladjustment, as well as initiating the respective procedures.

The employer can only resort to the support for the gradual resumption of employment – as previewed on Resolution number 41/2020 - once the extraordinary support for the maintenance of the employment contract has terminated, and not before.
Companies that have used the simplified lay-off scheme may, at the end of this support, recourse to the lay-off scheme provided for in the Labour Code on an uninterrupted basis.

Lastly, please note that the respective form is already available in the area of Direct Social Security for Employers to adhere to the current Extraordinary Support Measure for Maintenance of Employment Contracts (simplified lay-off) or the lay-off under the Labour Code.

Authors

Susana Afonso
Susana Afonso
Partner
Lisbon
Picture of Sofia Mateus
Sofia Mateus
Partner
Lisbon
Picture of Mafalda Silva
Mafalda Alves da Silva
Associate
Lisbon
Picture of Tiago Magalhaes
Tiago de Magalhães
Associate
Lisbon
Catarina Reino Prudêncio
Trainee
Lisbon
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