Remain compliant with Portuguese employment laws and issue lawful Portuguese employment contracts using our expert PEO Services.
A popular location for various businesses thanks to its numerous port towns, attractive weather and more, Portugal continues to be a desirable location for businesses looking to expand internationally. In recent years benefitting from a boom in tech startups, there are a number of reasons why companies may look to grow into the Portuguese market.
When emerging into a new market such as Portugal’s, it is crucial your company has fair and compliant employment contracts in place which protect both you and your employees. All employment contracts for workers operating in Portugal should adhere to the rules set out by the Labour Code (Código do Trabalho) and the Portuguese Constitution (Constituição da República Portuguesa).
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These rules cover the fundamental working rights of those who undertake employment in Portugal. For example, employee protections in Portugal include but are not limited to:
- A maximum normal working period is usually 40 hours per week.
- A minimum rest period of 11 consecutive hours in every 24 hours, commonly named the ‘rest period’.
- A minimum of 22 days of annual leave each year as part of the employee benefits.
- Additional compensation for overtime work.
While we have noted just a few rules which must be abided by by employers, there are several other recommended and optional provisions which can be incorporated into the Portuguese employment contract. Though this may vary depending on your employment sector, (such as additional insurances required for construction workers), it is important you are aware of which terms must be included specifically for your business.
What types of employment contracts are there in Portugal?
For the most part, Portugal allows employers to have both written and verbal employment contracts available to them, with the condition that it is agreed upon by both parties. In some cases however, written contracts are necessary for certain types of employment, such as:
- Fixed-term contracts
- Contracts with foreign workers from outside of the European Union
- Temporary contracts
- Remote working contracts (teletrabalho)
- Part-time contracts
Aside from these contracts which require written documentation as part of the employment agreement, one of the most common types of contracts is the open-ended contract (contrato sem termo), relating to the employment for an indefinite period. This type of contract may be more suitable for companies who are looking to be permanently established within Portugal, compared with various types of temporary contracts which lend themselves well to trying out new markets or for certain projects.
It must also be noted that probationary periods are most likely to be included in most contract types, in order for each party to establish their interest in the other. Nevertheless, having the correct contract type for specific employees is an essential part of your business expansion into Portugal and beyond.
Can I change an employment contract?
Unless it is strictly forbidden by law, amendments can be made to an existing contract given the knowledge and consent of both employer and employee in writing. Failure to handle these changes compliantly could further increase the risk of non-compliance, as well as heighten the risk of employee disputes. In turn, this could lead to unnecessary time, resources and money spent rectifying the issue.
Do I need to translate an employment contract?
According to Portuguese law, there is no legal requirement for contracts to be translated into the employee’s preferred language. As a result, the employment contract can be accepted by both parties if the finite details of employment are understood.
How do I write a Portuguese employment contract?
Though specific terms of employment may have different clauses based on the industry your company is working in, standard Portuguese employment contracts should include the following:
- Identification of the company and the employee
- Place of work or an indication of various work locations according to the nature of the work
- Category of the worker/a brief description of their duties
- Start and end dates of employment (if applicable)
- Duration of holidays or criteria for its determination
- Notice periods for both the employer and employee
- Value and frequency of payment
- Expected daily and weekly working hours
While these points are not indicative of an exhaustive list, it is essential that your business is fully aware of the requirements needed for any contracts drawn up for your employees working in Portugal. All information included in the written or verbal contract should be verified and correct at the time of creation in order to ensure disputes are kept to a minimum.
With the help of our PEO for Portugal services, we deal with company contracts compliantly, reducing your risk and enabling employees to feel satisfied.
Why use a PEO partner to manage Portuguese employment contracts?
Dealing with Portuguese employment contracts is not only a task which can be extremely complicated to navigate, it is also one which is laden with risk. Your company’s failure to comply with the necessary Portuguese labour laws and the required employment terms can open your business up to a whole host of needless issues, wasting valuable time and money which could be better suited to successfully expanding your business.
In addition to employment contracts, there are numerous other aspects of international company growth, such as payroll, national insurance, tax, entity setup, recruitment, work permits and visas, which need to be carefully considered.
Luckily, Leap29 can aid your international expansion into Portugal and relieve you of all the stresses associated with employment contracts and more. Our PEO experts are extremely knowledgeable about the intricacies of Portuguese labour laws, contracts and so on are ready to help your business take its next steps.
We have over two decades of experience providing recruitment services to businesses covering multiple sectors, including Engineering and Construction, Oil & Gas, Pharmaceuticals, Renewable Energy and Technology. If you are interested in learning more about how our PEO or EOR services in Portugal can benefit your business, contact our specialists today.
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"For the last few years, we have worked very closely with Simon and the team at Leap29 on a number of different projects in multiple countries across the globe. Leap29 have been a fantastic partner for us and are always willing to think with us to find the best solution. The communication with the team at Leap29 has always been excellent and Simon, in particular, is great to work with! They come highly recommended from us!"
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