Factsheet for measure
PT-1999-25/2629
– measures in Portugal
Wage Guarantee Fund
Fundo de Garantia Salarial - FGS
Background information
Decree-Law 219/99 of 15 June created the Wage Guarantee Fund, aimed at ensuring the payment of amounts due to employees in the event the employer
defaulted.
Later, on 21 April 2015 a new regime of the fund was approved by the Decree-Law 59/2015. This adapts the fund's regime to the Revitalisation Programme guaranteeing that claims of employees in companies assigned to revitalisation or recovery plans also have access to the fund.
Content of measure
The FGS is an autonomous fund that is not part of the social protection guaranteed by the social security system. Its management and operation are carried out by the Social Security Institute of Financial Management (Instituto de Gestão Financeira da Segurança Social - IGFSS, I.P.) and is financed by the employers.
The FGS ensures the financial protection of employees in case of insolvency or difficult economic situation by the employer. The fund guarantees the payment of wages, holidays, Christmas and food allowances and redundancy compensation.
The fund ensures the payment of labour credits due to workers since the six months preceding the start:
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When a court declares the insolvency of the employer;
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When a judge makes an order appointing a provisional judicial administrator, in the case of a Special Revitalisation Process (Processo Especial de Revitalização - PER);
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When an order is made accepting the application made by the IPAMEI, I.P., in the context of the Out-of-court Company Recovery System - SIREVE.
The payment of the claims referred to above is subject to a double limitation:
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One of a temporal nature, since the worker is requested to file the application for the payment of outstanding labour credits at district centres or local social security services within one year from the day following the day on which the employment contract ended; and
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Another of a pecuniary nature, as the fund simply ensures the payment of claims arising from the employment contract for at maximum of six months, and with the maximum monthly amount up to three times the minimum guaranteed monthly wage (€820 in 2024).
The fund also covers employees who work or have habitually worked within the national territory for an employer with activities in the territories of at least two EU Member States, even if the employer is declared insolvent by a court or competent authority of another Member State of the European Union or of the European Economic Area.
Use of measure
According to the Annual report and accounts of the IGFSS (2022), the number of requests to the FGS decreased by 32% in 2022 compared to the previous year and less 50.8% compared with 2019: in 2022, 7,023 requests were made to the FGS services, 3,312 less than in 2021 (10,335 requests) and 7,255 less than in 2020 (14,278 requests). On average, during 2022, 585 requests were received per month.
In 2022 the expenditure on payment of salary credits was €43,027,286.59, representing an decrease of 44% compared with 2021 (and less 43% than in 2020).
In 2022, the expenditure corresponds to 7,532 applications.
The average amount paid per application was €5,712.
Target groups
Actors and funding
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Actors
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Funding
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National government
Employers' organisations
Public employment service
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Companies
National funds
|
Social partners
Social partners' role in
designing the measure
and form of involvement:
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Trade unions
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Employers' organisations
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|
Role
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Consulted
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Consulted
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|
Form
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Consultation through tripartite or bipartite social dialogue bodies
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Consultation through tripartite or bipartite social dialogue bodies
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Social partners' role in the
implementation, monitoring and assessment phase:
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Unknown
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Main level of involvement: Peak or cross-sectoral level
Involvement
Tripartite consultation involving the government, the trade union confederations CGTP and UGT and the employer confederations CIP, CCP, CTP and CAP at the Standing Committee for Social Concertation.
Views and reactions
Social partners were consulted at the Standing Committee for Social Concertation. Their views are not known.
Sources
