Law no. 63/2013, 27th August

Yesterday, 27th  August 2013, it was published at the official state gazette, 1st series, No. 164, producing its effects 1st september 2013, law No. 63/2013, which established the mechanisms to avoid the misusage of the rendering services contract in situations of employment contract.

I. Amendments to the Applicable Regime to Labour and Social Security Administrative Offences

According to the published Law, whenever a situation in which the performance of an activity, apparently autonomous, that shows any characteristics of an employment contract under the provisions of article 12.º , no. 1 of the Portuguese Labour Code, the Work Inspection Authority ("ACT") is empowered to initiate the procedure to avoid the misusage of the rendering services contract in situations of employment contract.

The above referred procedure establishes that the ACT's Inspector, whenever in a situation of a performing activity, apparently autonomous, as described above, must draft an act and notify the employer to, in 10 (ten) days, regularize the situation, or present a reply.

If the employer regularizes the situation, the procedure is, immediately, shelved. If not, ACT will, in 5 (five) days, participate the situation to the Public Prosecutor in order to present in Court the action of recognition of the existence of the employment contract (new type of judicial action).

II. Amendments to the Labour Procedure Code

Not only the above referred Regime was amended by Law no. 63/2013, 27th August, but also the Labour Procedure Code ("LPC").

It was amended article 26º of the LPC creating a judicial action to recognize the existence of the employment contract, which has an urgent nature (thus, it does not suspend during judicial holidays), beginning upon the reception of the ACT's participation.

It was also added a new chapter, named «Action to recognize the existence of the employment contract», with articles 186.º -K to 186.º -R.

According to the referred articles, the Public Prosecutor has 20 (twenty) days to present in court the respective action. On the other hand, in case the Public Prosecutor becomes aware, by any means, of the existence of a similar situation of the above referred, it must communicate to the ACT in order to, in 20 (twenty) days, begin the administrative offence procedure as described above.

Once notified the employer of the judicial action begun by the Public Prosecutor, it is given the time period of 10 (ten) days to reply. All evidences are presented in Court, up to a maximum of 3 (three) witnesses.

In the event both the employer and employee are present or represented, the judge will try to conciliate both parties. In case of frustration it takes place the final hearing.

It must be noted that the absence of any of the parties or of their lawyers, even if justified, is not considered as ground to postpone the final hearing.

The Court's final decision that recognizes the existence of an employment contract establishes the beginning date of the labour relationship, and is notified to the ACT and Social Security Institute, I.P., for all due purposes.

The appeal of the Court's decision is admitted to the Court Appeal, but with no suspensive effects.