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Employment contracts and policies in Portugal
Contract terms in Portugal
Fixed-term contracts in Portugal
Contract extensions in Portugal
Working hours in Portugal
Remote work in Portugal
Tailored employment contracts in 100+ countries
Employment contracts in Portugal
Every country has its own rules and regulations concerning employment contracts. International employers need to be aware of the laws that apply to their workers so they can ensure compliance and protect their business from risk. In Portugal, employment contracts are largely governed by the Labour Code (Código do Trabalho).
Employers don’t always need to provide a written employment contract in Portugal. However, they are obligatory in some circumstances, such as for fixed-term and part-time contracts. Employers in Portugal should ensure they thoroughly understand the rules about employment contracts before hiring workers.
In this section, we’ll take you through everything you need to know about employment contracts in Portugal, including the situations when a written contract is mandatory, the specific terms that must be included, and employers’ responsibilities when it comes to tracking working hours and paying overtime. We’ll also discuss the specific rules that apply to fixed-term contracts and extensions and the rights of remote workers in Portugal.
Employment contracts and policies in Portugal
Under Portuguese employment law, written employment contracts are not obligatory apart from in certain specific situations. However, it’s still common practice to provide every employee with a contract laying out their core terms and conditions of employment. This ensures that both the employer and the employee are clear on their rights and obligations. Employment contracts can’t contain terms that are less favourable to the employee than those set out in the relevant employment legislation or any collective bargaining agreement (CBA) that applies.
Written employment contracts in Portugal
In most cases, it’s technically legal for an employment contract to be agreed verbally in Portugal. However, the following types of contracts must be in writing:
- Fixed-term contracts
- Contracts with foreign employees
- Contracts with multiple employers
- Part-time contracts
- Management contracts
In all cases, employers in Portugal must provide employees with a written statement of their core working conditions within 60 days of employment. This is typically part of a written employment contract.
Probationary periods in Portugal
Probationary periods are permissible in Portugal. During the probationary period, either the employer or the employee can terminate the contract with a limited notice period. For an indefinite contract, the maximum duration of a probationary period is:
- 90 calendar days for most employees
- 180 calendar days for managers, highly qualified employees, or complex jobs
- 240 calendar days for senior managers
For fixed-term contracts, the maximum duration of a probationary period is:
- 30 days for contracts of six months or longer
- 15 days for shorter contracts
Employment policies in Portugal
There are certain obligatory employment policies that companies in Portugal must put in place. For example, all companies with over seven employees must have a code of good conduct for preventing harassment in the workplace. Companies with 50 or more employees (and those that meet certain legal requirements regardless of size) must implement internal reporting channels for whistleblowers.
Employers in Portugal can also choose to adopt other company policies, even if they’re not mandatory. For example, a company may have a remote work policy, a dress code, or a social media policy. A specific type of employment policy in Portugal is an internal regulation (regulamento interno), which must be posted at the company’s premises.
Contract terms in Portugal
Employers are free to set their own terms for work contracts in Portugal. However, they can’t be any less favourable than the terms set out in the Labour Code, any other relevant employment legislation, or any collective bargaining agreement (CBA) that applies. If there’s more than one CBA in place (e.g. an industry-level agreement and a company CBA), the company-level agreement takes precedence.
Minimum contract terms in Portugal
Portuguese employment law sets the minimum terms and conditions that an employer must provide for its employees. For example, employers in Portugal must:
- Pay all employees at least the minimum wage
- Provide at least the minimum annual leave entitlements
- Ensure working conditions meet the minimum standards set by the Labour Code
Implied terms in Portugal
Certain provisions may be counted as terms of an employee’s work contract in Portugal, even if they are not explicitly stated within their written agreement. This includes anything that’s specified in statutory provisions, collective bargaining agreements, internal regulations, or labour practices.
Indefinite vs. definite contracts in Portugal
Under Portuguese labour law, indefinite employment is the norm. It is possible to hire employees on a fixed or unfixed (temporary) contract, but this is the exception to the rule. If an employment contract doesn’t state that the contract is fixed-term or temporary (or if there is no written employment contract), it is presumed to be indefinite.
Fixed-term contracts in Portugal
Fixed-term contracts in Portugal are only permitted in certain circumstances. The employer must be able to justify that the employee has been employed on a fixed-term basis for a good reason, which might include:
- Replacing a worker who is temporarily absent (e.g. on maternity leave)
- Replacing a worker on unpaid leave (e.g. a sabbatical)
- Partially replacing a full-time worker who is temporarily working part-time
- Seasonal work or another activity with irregular cycles
- An exceptional increase in company activity
- To complete a precisely defined, time-limited task or project
There are also certain exceptions for new companies below a certain headcount threshold that hire people out of long-term unemployment.
Key features of fixed-term contracts in Portugal
As the name suggests, fixed-term contracts in Portugal must have a set end date. The duration of a fixed-term contract can’t exceed two years, and fixed-term contracts can only be extended or renewed a maximum of two times. Employers must prove the need for a fixed-term contract and state the reason in the contract itself.
Short-duration contracts in Portugal
Short-duration contracts (contrato de muito curta duração) are another type of fixed-term contract in Portugal. They can be for a maximum of 35 days at a time, for no more than 70 days in one calendar year. This type of contract is commonly used to hire workers for seasonal agricultural work or to work at tourist events. The employer doesn’t have to provide a written contract to workers with this type of agreement, but they must communicate the contract terms and the place of work to the social security services through an electronic form.
Contracts of unspecified duration in Portugal
A contract of unspecified duration (contrato a termo incerto) is another type of temporary employment contract in Portugal. Unlike a fixed-term contract, this type of agreement has no set end date. Instead, its termination is triggered by a specific event or circumstance, such as the completion of a project. This type of contract has a maximum duration of four years. Workers are entitled to compensation at the end of the contract.
Contract extensions in Portugal
As well as limiting the circumstances under which fixed-term contracts may be used in Portugal, Portuguese employment law sets strict limits on the number of times a fixed-term employment contract can be renewed. This is to prevent employers from hiring workers on a string of fixed-term contracts, preventing them from accessing the benefits of permanent employment.
Ending a fixed-term contract in Portugal
A fixed-term contract automatically comes to an end on its term date, which must be stated in the contract. Employers must pay compensation to employees for ending a fixed-term contract, amounting to 18 days of the employee’s base salary plus a seniority bonus for each year worked.
After the end of a fixed-term contract, the employer can’t hire another fixed-term employee for the same work. However, they can renew the original worker’s contract, subject to certain restrictions.
Extending or renewing a fixed-term contract in Portugal
Employers in Portugal can renew an employee’s fixed-term contract a maximum of twice. However, the total length of the contract can’t add up to more than two years. For example, an employee hired on a fixed-term contract of six months could have their contract renewed twice, making a total duration of 18 months. However, an employee with a contract of one year could only have their contract renewed once, since a second renewal would break the two-year limit.
Working hours in Portugal
The standard working hours in Portugal are eight hours per day or 40 hours per week. This typically worked Monday–Friday. The Portuguese Labour Code sets the maximum daily and weekly working hours that employees can work, though this may differ based on the employee’s contract or a collective bargaining agreement.
Average working hours in Portugal
In 2023, the average working hours worked per week in Portugal was 39.48 hours, showing that most employers work close to the standard 40-hour work week.
Legal maximum working hours in Portugal
The legal maximum working hours per week in Portugal are set by the Labour Code. It states that employees may not work more than an average of 48 hours per week. However, employees in Portugal can choose to opt out of maximum working hours and get paid extra instead. Employees in managerial positions can also opt out of receiving additional payments for working more than 48 hours per week on average.
Overtime in Portugal
In general, employers in Portugal must pay overtime for employees who work more than 40 hours per week. Overtime must not exceed two hours per day or 150 hours per year.
The first 100 hours of overtime must be paid at the following rates:
- 125% of normal wages for the first hour on weekdays
- 137.5% of normal wages for additional hours on weekdays
- 150% of normal wages for work on public holidays or weekends
After 100 hours of overtime in a calendar year, employees are entitled to:
- 150% of normal wages for the first hour on weekdays
- 175% of normal wages for additional hours on weekdays
- 200% of normal wages for work on public holidays or weekends
Employees who work overtime on a Sunday or a public holiday are entitled to weekend overtime pay, plus an additional rest day which must be granted within the next three working days.
Employee time tracking in Portugal
Employers in Portugal are responsible for tracking their employees’ working hours. They can do this either manually or automatically. Records must be kept in an accessible place where they can easily be provided to labour authorities on request.
Breaks and rest time in Portugal
Employees in Portugal are entitled to a break after five hours of continuous work. This is usually granted as an unpaid lunch break of 1–2 hours. Employees also have the right to at least one full day off per week, and at least 11 hours of rest between working days.
Remote work in Portugal
As in many other countries, remote work in Portugal has become increasingly popular over the last few years. The Labour Code sets certain rules and obligations for remote employees and their employers.
First, remote work requires the consent of both the employer and the employee. Both parties must sign a written agreement that sets out their rights and responsibilities in relation to remote work. Employers in Portugal can’t force their employees to work from home, and employees can’t unilaterally demand the right to work remotely either. However, employees with children up to eight years of age have the right to a remote work regime. This is also the case for employees with children with disabilities, chronic illness, or an oncological disease, regardless of the child’s age.
Equipment for remote workers in Portugal
In Portugal, employers are responsible for providing their employees with the equipment and systems that are necessary for their work, even when they are working from home. Employers of remote workers can either provide this equipment directly or reimburse employees for the cost of acquiring it. Which method the employer will use should be stated in the remote work agreement. Generally speaking, employees can’t use work equipment for personal matters unless they have permission from their employer.
Costs of remote work in Portugal
Employers of remote workers in Portugal are also responsible for helping their employees meet the costs of working remotely. For example, this might include additional utility costs and the cost of setting up a workspace. Employers can agree to pay employees a fixed monthly sum to cover expenses or reimburse employees for each payment. For utilities like internet, water, and electricity, employers must pay employees the difference between their current bill and the bill for the last month they worked on-site.
Health and safety for remote workers in Portugal
Employers are responsible for ensuring the health and safety of their employees’ workspace, even when they work from home. The employer must provide a health examination before the employee begins working from home, and annual exams thereafter. They can also assess the employee’s workspace from a health and safety perspective — employees must provide their employer access to the space to allow them to do this.
Portugal remote work visa
Over the last few years, many countries around the world have introduced remote work visas, which allow remote employees and freelancers to live and work in the country without being subject to the usual immigration and tax requirements. Since 2022, professionals wanting to work remotely in Portugal can apply for the ‘digital nomad visa’, which allows them to work in Portugal for up to 12 months. This visa is open to both employees and self-employed professionals.
Tailored employment contracts in 100+ countries
Like all countries, Portugal has its own rules and regulations when it comes to employment contracts — and non-compliance could land your company in hot water.
Thankfully, our team is experienced in drawing up tailored, compliant contracts in Portugal (and more than 100 countries worldwide). That means that, when you work with us, you won’t need to waste time worrying about whether you’ve got it right. Instead, you can focus on what matters: your business.
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