Legislative proposal no. 120/xii (2.ª)

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 the 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.

II. Calculation of the compensation

CONTRACTS CELEBRATED BEFORE 1st NOVEMBER 2011

Expiration of the contract term:

1. Compensation regarding the duration period of the contract until 31st October 2012 or until the date of the extraordinary renewal if before: 

• 3 or 2 days of base remuneration (BR) and seniority payments per each month, whether the total contract duration does not exceed or exceeds 6 months, respectively.

2. Compensation regarding the duration period of the contract after 31st October 2012:

• 20 days of BR and seniority payments per each year of seniority.

3. Compensation regarding the duration period of the contract after 1st October 2013:

• 18 days of BR and seniority payments per each year of seniority, concerning the first 3 years of the contract duration; 
• 12 days of BR and seniority payments per each year of seniority, concerning the subsequent years.

Collective Dismissal, Extinguishment of the Job Position, Dismissal Due to Non-Adjustment:

1. Compensation regarding the duration period of the contract until 31st October 2012: 

• 1 month of BR and seniority payments per each year of seniority.

2. Compensation regarding the duration period of the contract after 31st October 2012: 

• 20 days of BR and seniority payments per each year of seniority.

3. Compensation regarding the duration period of the contract after 1st October 2013: 

• 18 days of BR and seniority payments per each year of seniority, concerning the first 3 years of the contract duration; 
• 12 days of BR and seniority payments per each year of seniority, concerning the subsequent years.

CONTRACTS CELEBRATED AFTER 1st NOVEMBER 2011

Expiration of the contract term:

1. Compensation regarding the duration period of the contract until 30th September 2013: 

• 20 days of BR and seniority payments per each year of seniority.

2. Compensation regarding the duration period of the contract after 1st October 2013: 

• 18 days of BR and seniority payments per each year of seniority, concerning the first 3 years of the contract duration; 
• 12 days of BR and seniority payments per each year of seniority, concerning the subsequent years;

In case of unfixed term employment contract, the due compensation shall be 18 days of BR and seniority payments, concerning the first 3 years of the contract duration and 12 days of BR and seniority payment, concerning the subsequent years.

Collective Dismissal, Extinguishment of the Job Position, Dismissal Due to Non-Adjustment:

1. Compensation regarding the duration period of the contract until 30th September 2013: 

• 20 days of BR and seniority payments per each year of seniority.

2. Compensation regarding the duration period of the contract after 1st October 2013: 

• 18 days of BR and seniority payments per each year of seniority, concerning the first 3 years of the contract duration; 
• 12 days of BR and seniority payments per each year of seniority, concerning the subsequent years;