Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.
Factsheet for measure PT-2020-13/297 – Updated – measures in Portugal
|Country||Portugal , applies nationwide|
|Time period||Temporary, 27 March 2020 – 30 June 2021|
|Type||Legislations or other statutory regulations|
Employment protection and retention
– Income support for people in employment (e.g., short-time work)
|Author||Maria da Paz Campos Lima (CESIS)|
|Measure added||06 April 2020 (updated 07 February 2022)|
|Related ERM support instrument|
This exceptional and temporary measure, set by Decree-Law No. 10-G/2020 of 26 March 2020, simplifies the implementation and sets new conditions to the temporary measure provided for in the Ordinance No. 71-A/2020 of 15 March to respond to the COVID-19 pandemic, which introduced exceptional changes to the ‘Lay-off' regime defined by Labour Code (Law No. 7/2009). The measure aims at protecting jobs and maintaining labour contracts in companies by supporting two-thirds of workers’ wages. This measure adds the following main provisions: it forbids the companies that are entitled to the support to eliminate jobs (collective and individual redundancies); and establishes that the state budget will cover the financing of the part of wages provided by social security.
Decree-Law No. 10-G/2020 of 26 March 2020 establishes that companies in a crisis situation as a result of: i) a complete halt in the activity or ii) or abrupt and sharp decrease of activity of at least 40% of invoicing have access to extraordinary support to help pay the wages of their workers for a maximum period of six months.
The criteria related with abrupt reduction in activity of at least 40% concerns the period of one month before the date of the application, with reference to the average of the two previous months, or to the average of the same period in the previous year. For those companies that started their activity less than 12 months, the reference is the average of that whole period.
The measure aims at protecting jobs and maintaining labour contracts in companies by supporting two-thirds of workers’ wages. This measure adds the following main provisions: it forbids the companies that are entitled to the support to eliminate jobs (collective and individual redundancies); and establishes that the state budget will cover the financing of the part of wages provided by social security. Workers compensation cannot in any case be below the mandatory minimum wage.
The Resolution of the Council of Ministers no. 41/2020, of 6 June, that approved the Economic and Social Stabilization Program, extends the extraordinary support for the maintenance of employment contracts and establishes a transitional regime replacing the regime in force of ‘simplified layoff’ by a support to progressive recovery (2.2.).
Companies that remain closed as determined by the government continue to benefit from the simplified lay-off regime; the simplified lay-off, in the model currently in force, is extended until the end of July; companies that have a decrease in revenue equal to or greater than 40% may benefit, between August and December 2020, from a support mechanism for progressive recovery; companies that have benefited from the simplified lay-off regime can now benefit from an extraordinary incentive to normalize business activity, choosing one of two modalities: One minimum wage (€635) one-off or two minimum wages over six months.
The support for progressive recovery (2.2.1) introduces changes concerning the wages of workers under layoff (at the present a payment by 66%): workers will receive between 77% and 83% of their wages from August to September, and between 88% and 92% from October to December 2020. The measure has two conditions: prohibition of dismissals during the application of the measure and in the subsequent 60 days; and prohibition of the distribution of dividends during the application of the measure.
The Resolution introduces also a one-off measure, the Stabilization Complement with the aim to improve the income of workers under layoff (2.3). The one-off measure, payable in July, in the amount of income loss of one month of lay-off, which can vary between €100 and €351 applies to all workers with an income, in February, up to two minimum wages and who have registered a loss of basic salary, and were in layoff in one of the months between April and June. Recipients: workers with a basic salary above one minimum wage and up to two minimum wages.
The quantitative information 'Indicadores COVID-19' published by the Strategy Planning Office of the Ministry of Labour, Solidarity and Social Security ( GEP/MTSSS ) refers to the number of workers employed by the companies that applied for the scheme, but not to the actual number of workers that benefited from the scheme.
Information on 7 April 2020: The simplified layoff support was requested by 40,000 companies, encompassing around 642,000 workers. In terms of sectors 24.2% are companies in the Accommodation and Food Services, 19.9% in Wholesale and Retail, 9.3% in Manufacturing Industry and 8.9% in Human Health and Social Support Activities.
Information on 6 June 2020: According to the information provided by the Resolution of the Council of Ministers no. 41/2020, of 6 June that approved the Economic and Social Stabilization Programme, the simplified layoff regime covered around 100,000 companies and 800,000 workers.
Information at 6 August 2020: The simplified layoff support was requested by 115,111 companies. In terms of sectors 22.4% are companies in the Accommodation and Food Services, 22.2% in Wholesale and Retail, 10.1% in Manufacturing Industry and 6.9% in Human Health and Social Support Activities. The total number of workers working in the companies covered by applications for simplified lay off 1,381,465 workers.
The coverage of workers per sector (for the companies covered by the applications) at 6 August 2020 was:
The information published in October 2020 - accumulated data since the measure entered into force until it expired in 14 October 2020 - reported that 115,271 companies employing 1,369,239 workers requested this support.
The information published on 11 March 2021 - accumulated data since the renewal of the measure on 15 January 2021 until 2 March - reported that 55,987 companies employing 515,415 workers requested this support.
The information published on 2021 - accumulated data from 15 January to 7 May 2021 - reported that 58,362 companies employing 540,116 workers requested this support. Around 35% of the companies were from the in Accommodation and Food Services and 20% were from Wholesale and Retail.
The use of this measure by the companies in 2020 and 2021 was much above their use of the 'standard lay off regime' provided by the Labour Code, according to the information published by the Strategy Planning Office (GEP) of the Ministry of Labour, Solidarity and Social Security (MTSSS) in the Statistical Bulletin of December 2021. In 2020, 842 companies and 20,069 workers benefited from the 'standard regime' (of which 7,791 with reduced working time and 12,278 suspending the labour contract).
Employees in standard employment
||Does not apply to businesses||Does not apply to citizens|
Public employment service
Social partners' role in designing the measure and form of involvement:
|Trade unions||Employers' organisations|
|Form||Consultation through tripartite or bipartite social dialogue bodies||Consultation through tripartite or bipartite social dialogue bodies|
Social partners' role in the implementation, monitoring and assessment phase:
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 (Comissão Permanente de Concertação Social – CPCS). The measures provided for in Decree-Law no. 10-G / 2020 of 26 March are subject to regular assessment by the CPCS.
Eurofound (2020), Exceptional and temporary measure on layoffs to protect jobs in the context of the COVID-19 pandemic, measure PT-2020-13/297 (measures in Portugal), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/PT-2020-13_297.html
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Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.