How To Resign In Portugal

Employment terminations that are mutually agreed upon by the employer and employee are relatively simple, requiring only a written statement. Unless executed in front of a public notary, employees have seven days from the effective date to revoke the termination agreement.

Employer-initiated terminations, on the other hand, are a little more complicated, requiring a valid reason, a disciplinary procedure, and compensation equal to 12 days of basic pay and seniority allowances for each year of service.

The employer may not terminate employment without just cause.

Employers must give employees a notice period proportionate to the number of years they have worked for the company. The process takes several weeks, and if not completed correctly, the dismissal is deemed illegal and void. The following are some of the reasons for termination:

Just Cause (serious offenses that render the job unreasonable).

• Unlawful defiance of lawful orders
• Breach of other employees’ rights and guarantees
• Provocation of conflict with coworkers on multiple occasions
• a consistent lack of interest in performing job-related duties
• The employer suffered severe material losses.
• False statements with no justification
  • Unjustified absence from work causing direct harm or posing significant risks to the employer (5 successive or ten interrupted absences)
  • Intentional noncompliance with workplace health and safety regulations
  • Physical violence or insults directed at coworkers in the workplace
  • Kidnapping, theft, or any other crime involving people’s fundamental rights
  • Breach of or refusal to comply with court orders
  • Significant productivity loss
• Redundancy
• Expiration 
• Revocation
• Dismissal as a group for economic, structural, or technological reasons
• Dismissal for inability to adapt
• Dismissal for disciplinary reasons is subject to an internal disciplinary procedure.
• Employee unilateral contract termination, with or without just cause
• Mutually agreed termination

A business transfer is only a valid reason for an employee’s termination if the transfer causes them serious harm.

Worried About Dismissal Complexity In Portugal?

If you hire through Boundless, our experts can walk you through the entire firing process.

In cases of disciplinary dismissal, the employer is not required to pay compensation or provide a notice period for the termination of the employment contract. They must, however, always complete the dismissal procedure. When the employer notifies the employee of their formal decision to dismiss, the dismissal takes effect. This is the final step in the required disciplinary procedure.

Employment contracts cannot establish different termination rules, even if they are more advantageous to the employee. They also cannot specify the amount of termination pay in advance.

Employees are exempt from paying taxes on their pay up to the average of their regular taxable 12-month salary multiplied by the number of years worked. This excludes any labor credits paid to the employee as of the termination date (allowances, retribution, etc.) The exemption does not apply to director and board member termination payments.

Employers must file a Declaraço de Situaço de Desemprego form with the Social Security Administration, indicating the reason for the termination. When an employee is terminated by the employer for objective reasons, the employee is entitled to severance pay.

Procedure Guidelines

Before terminating an employment contract, employers must follow a standard and documented disciplinary procedure (if employing ten workers or more). It is divided into three stages:

1. Accusation: the employer gives the employee a written description of their wrongdoing and warns them that they will be fired.
2. Defense: the employee reviews the disciplinary file, responds in writing to the accusation, and requests probative diligence, which the employer cannot refuse (unless an irrelevant or a delaying tactic).
   1. Employee representative bodies may issue non-binding opinions on dismissal, which the employer must consider before making a decision.
3. Decision: the employer gives a detailed, written dismissal decision (the mandatory content of which depends on the specific procedure for termination).

The employee’s employment contract terminates upon receipt of the dismissal decision. The employee has five days to seek an injunction to prevent the effect of the dismissal and 60 days to file a legal challenge.

Disciplinary procedures must be initiated within 60 days of the employer becoming aware of the wrongdoing and within one year of the offense occurs.

The formal steps are the same if you employ fewer than ten people. The timeline, as well as the need to communicate with Unions and workers’ representatives, change.

Unfair Dismissal In Portugal

Pregnant workers, employees who have given birth in the last 120 days, breastfeeding mothers, and those on paternity leave have superior protection against dismissal.

Employees who have been fired may file a claim in a labor court to challenge their dismissal. If the court rules that there was an illegal procedure or a lack of reasons or formalities for a dismissal, employees are entitled to the salaries they would have received if the dismissal had not occurred, as well as compensation for damages ranging from 15 to 45 days of base salary plus a seniority bonus. They may also choose to return to the company.

Redundancy Procedure

Employees who are laid off due to collective bargaining or redundancy are entitled to severance pay. The salary of an employee is determined by their level of seniority within the company.

When the following conditions are met, collective dismissal occurs:

• Within three months, two or more employees in a company with fewer than 50 employees are let go.
• Within three months, five or more employees in a company with more than 50 employees are let go.

Collective redundancies are considered dismissal due to job position termination when an employer terminates an employment contract and justifies the termination on business-related economic, structural, or technological grounds.

Among the grounds for collective dismissal are:

• The closure of one or more business units.
• Reduced employee numbers due to market, structural, or technological factors

Both collective dismissals and simple redundancies may involve unions or workers’ commissions.

Resignation Procedure In Portugal

Employees who wish to leave their jobs must notify their employers in writing of their intention to resign and adhere to the notice period, which varies depending on how long they have been with the company:

• Less than six months: 15 days’ notice
• Between six months and two years: 30 days
• More than two years: 60 days

The notice periods also depend on the type of contract:

• Fixed-term contracts: 30 or 15 days in advance if the contractual term is six months or less.
• Other contracts: 30 or 60 days in advance, depending on whether the employee has worked for up to two years or more.

Employees who represent a union, as well as highly technical or executive-level professionals, may be entitled to a six-month notice period under their employment contract or collective bargaining agreement. Employees who fail to comply with the notice period in whole or in part must pay the employer compensation equal to base pay and seniority pay for the period in question.

If the employee has a just cause for resigning, they can include it in their letter and take it to the labor court (optional) to request compensation (15 to 45 days of base pay plus an extra remuneration for every year of service, minimum wage of three months). The following are justifications:

• The company deliberately pays salaries late.
• The employer does not adhere to the collective bargaining agreement or respect the rights of the employees.
• The company does not provide adequate health and safety precautions.
• The employer discriminates against the employee, harasses her, or causes her physical and emotional harm.

Regardless of the reason for resignation, an employee has the right to be paid for unused annual leave and Christmas pay.

The employee will also be eligible for unemployment benefits, but the amount will be determined by their salary levels and contribution profile.

Other End-of-Employment Guidelines In Portugal

Notice Period

The length of notice is determined by the number of years of service:

• Employees with less than one year of service: fifteen days
• Employees with one to five years of service: thirty days
• Sixty days for employees with five years or more of service and up to ten years.
• Employees with more than ten years of service receive 75 days.

Severance

Employees are entitled to compensation calculated in accordance with the Labour Code, which equates to 12 days’ salary for each year of service, with the following maximum limits:

• The salary used to calculate compensation cannot be more than €12,700. (20 times the national minimum wage)
• The total compensation cannot exceed 12 times the monthly salary, or €152,400. (240 times the national minimum wage)
• Compensation for a partial year is calculated proportionally.

Most employees negotiate more time, especially if there is a mass layoff.

Frequently Asked Questions

What Is The Termination Period In Portugal?

It can be less than or equal to a year working for the company: a 15-day notice period. It can be greater than or equal to one year and less than five years: 30-day notice period. It can be greater than or equal to five years and less than ten years. It can be a 60-day notice period, greater than or equal to ten years: or a 75-day notice period.

How Do I Close My Company In Portugal?

The first step in dissolving the firm is to have the deed witnessed by a notary public, which is only required in cases where there are real estate properties. In other cases, the deed is not required, and only a record of the general assembly with the decision to dissolve the company is needed.

How Many Hours Is Full-Time In Portugal?

Eight hours per day, for a total of forty hours per week. Employers can implement special flexible working schemes and temporarily increase work hours limits to 12 hours daily and 60 hours weekly.

What Is The Basic Salary In Portugal?

In 2023, the national minimum wage in Portugal will remain fixed at €886.7 per month or 10,640 euros per year when 12 payments are made per year. As a result, the national minimum wage has increased by 64.2 Euros per month, or 7.81%, over the previous year.

Is It Easy To Get PR In Portugal?

To obtain Portugal, Permanent residents’ foreign nationals must have five years of a temporary home subject to none being absent from Portugal territory on a regular basis for more than six months or a few eight months in a year and a golden visa program exempt from stay.