Factsheet for measure
PT-2013-35/2641
– measures in Portugal
Work Compensation Fund and Guarantee Fund for Work Compensation
Fundo de Compensacão do Trabalho (FCT); Fundo de Garantia de Compensacão do Trabalho (FGCT)
Background information
In 2013, through the Law 70/2013 of 30 August, two national compensation funds were established: the Work Compensation Fund (Fundo de Compensação do Trabalho - FCT) and the Guarantee Fund for Work Compensation (Fundo de Garantia de Compensação do Trabalho - FGCT). These Funds seek to ensure to workers the payment up to 50% of the compensation they are entitled to for labour contract ceasing (as predicted in the article 366 of the Labour Code).
Content of measure
The FCT and FGCT aim to ensure the workers’ right to receive half of the compensation owed to them in case of termination of their employment contracts. This amount is calculated according to article 366 of the labour code, which establishes that:
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The amount of compensation is equal to 12 days of basic salary and seniority bonus for each full year of seniority or fraction thereof.
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The amount of monthly basic salary and seniority bonus to be considered for the basis of calculation may not exceed 20 times the minimum guaranteed wage (€705 in 2022).
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The total amount of compensation may not exceed 12 times the monthly basic payment and seniority bonus of employee or, when the limit specified above is taken in consideration, 240 times the minimum guaranteed salary.
Employers are required to contribute 1% of pay (0.925% to FCT, 0.075% to FGCT) for employees hired after 1 October 2013.
FCT and FGCT are obliged to inform the Authority for Working Conditions (Autoridade para as Condições de Trabalho - ACT) of any non-compliance by the employer within 30 days.
Use of measure
According to the Management report of FCT, in 2021, the fund originated applications to the amount of €584,903,742.92, representing an increase of 21.6%, compared with 2020.
These payments are linked to 2,216,990 employment contracts. In 2021, a total payment of €87,639,434.99 was addressed to the refund of employers, following the termination of employment contracts (in 2020 the refund payment was €51,680,876.28).
Target groups
Actors and funding
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Actors
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Funding
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National government
Social partners jointly
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Companies
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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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Social partners jointly
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Main level of involvement: Peak or cross-sectoral level
Involvement
The trade union confederations CGTP and UGT and the four employer confederations CIP, CAP, CCP and CTP represented at the tripartite Standing Committee for Social Concertation have been consulted. Also the Funds are subject to a regular assessment, with the participation of the Standing Committee for Social Concertation.
Views and reactions
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