Observation (CEACR) - adopted 2015, published 105th ILC session (2016)

Termination of Employment Convention, 1982 (No. 158) - Portugal (Ratification: 1995)

The Committee notes the observations made by the International Organisation of Employers (IOE), in communications received on 1 September 2013 and 31 August 2014, the Government’s reply thereto and the observations made by the Confederation of Portuguese Industry (CIP) in a communication received on 4 November 2014. The Committee also notes the information provided by the Government in its report, as well as the observations made by the General Confederation of Portuguese Workers – National Trade Unions (CGTP–IN), the General Workers’ Union (UGT) and CIP communicated therein.

Legislative developments. Application of the Convention in practice. In reply to previous comments regarding the evaluation of the impact of the reduction of termination benefits by the legislative reforms of 2011 in terms of maintaining and creating employment, the Government explains that the 2011 labour reform established a transitional regime; hence, the impact of the legislative amendments on reducing the amount of termination benefits is not immediate. The Government adds that, according to the data available, there seems to be a slight decrease in terminations of employment contracts since the beginning of 2012. Moreover, the most recent employment statistics show that the employment rate has increased over the past four quarters (2013–14), which indicates an upward trend in employment after four consecutive quarters of decline (2012–13). Furthermore, the Government enumerates in its report the most significant amendments to legal regimes regarding termination of employment contracts, resulting from an adjustment process initiated in 2011. In its observations, the CIP reiterates some of the points previously made concerning the fact that Portuguese legislation regulates certain aspects of employment contracts’ termination more strictly and in greater detail than the Convention. The IOE and the CIP referred to important legal reforms adopted following the Tripartite Agreement for Competitiveness and Employment of March 2011 and the Commitment to Growth, Competitiveness and Employment of January 2012. The CGTP–IN expresses its concern in view of the increased undermining of workers’ protection from dismissal and refers to some of the latest legislative developments which have resulted in a new reduction of the compensation for termination of the employment contract, namely Act No. 23/2012 of 25 June 2012 and Act No. 69/2013 of 30 August 2013. Both the CGTP–IN and the UGT criticize the amendments resulting in new dismissal criteria, particularly in the case of extinction of the work position. The Government refers to the judicial decision whereby a number of sections of the Labour Code were declared unconstitutional, by reason of infringing the prohibition to dismiss without fair cause established in article 53 of the Constitution. In its decision No. 62/2013, the Constitutional Court found that the modifications introduced into section 368(2) of the Labour Code by Act No. 23/2012 of 25 June 2012 failed to provide the necessary normative guidance as to the criteria that should govern the employer’s decision. That section allowed the employer the right to define the criterion to be applied for making a post redundant in a context when there were other posts with identical functional content – hence eliminating the application of the seniority criterion. As regards the modified version of section 375(1)(d) of the Labour Code which eliminated the obligation to transfer the employee to another suitable position in case of extinction of the work position and dismissal for unsuitability, the Constitutional Court found that dismissal on the grounds of a worker’s unsuitability could only occur if no alternative was available. The Committee requests the Government to continue to provide information evaluating the impact of legislative reforms, in terms of maintaining and creating employment.

Article 2(3) of the Convention. Adequate safeguards in case of recourse to contracts of employment for a specified period. The Government indicates that in order to ensure the exceptional nature of the fixed-term contract regime, the cases in which such contract should be considered as and converted into a permanent contract are determined by law, namely when concluded with the intent to evade the regulations which are applicable to permanent contracts or where the maximum duration of the contract or the maximum number of renewals has been exceeded (section 147 of the Labour Code). The Government also provided statistical information showing that the percentage of workers with fixed-term contracts in 2013 has suffered a slight increase in comparison with 2012 (0.9 percentage point). The Committee takes note of the judicial decisions transmitted by the Government in connection with the protection of workers who hold fixed-term employment contracts. The Committee requests the Government to continue to provide information on the manner in which the protection provided by the Convention is ensured to workers who have concluded an employment contract for a specified period of time and the number of workers affected by these measures.

Article 2(5). Micro-enterprises. The Government indicates that the procedure for dismissal in micro-enterprises is regulated by the same provisions applicable to other enterprises, except for the intervention of work councils in the procedure of dismissal; hence the amendments to section 366(1) of the Labour Code concerning the investigation to be conducted by the employer, in reply to a disciplinary notice for the purposes of evidence gathering, are now applicable to micro-enterprises. The Committee requests the Government to continue to provide information on the effective application of the Convention to micro-enterprises.

Article 4. Justification for termination. The CGTP–IN recalls that the legislative amendments resulting in the elimination of the obligation of the employer to follow a specific criterion (seniority based) to select employees to be retrenched and to transfer the employee to another suitable position, in case of a redundant position and dismissal for unsuitability, were declared unconstitutional by the Constitutional Court (Decision No. 602/2013). Following the decision, the original criterion was altered by Act No. 27/2014 of May 2014. Both the UGT and the CGTP–IN deplore the fact that the criterion established by Act No. 27/2014 placing performance, qualifications, and labour costs above the seniority criterion may be used at the employer’s discretion. The Committee requests the Government to provide examples of the application of the legislative amendments of 2014 regarding the valid reason for termination of employment, including copies of the leading judicial decisions in this regard.

Article 8. Right to appeal. Time limit for the appeal procedure. In reply to previous comments, the Committee notes the detailed statistical information appended to the Government’s report concerning the number, outcome and average length of proceedings for 2011 and 2012, both at first instance and on appeal. The Committee recalls the concerns of the CGTP–IN regarding the reduction of the time limit for bringing a judicial claim for unfair dismissal from one year to 60 days, as established by the revised Labour Code. The Committee again requests the Government to provide information on the practical application of the new legislative provisions regulating claims for unfair dismissal. It also requests the Government to provide information on the roles of mediation and arbitration in resolving issues related to the Convention.

Article 10. Compensation. In reply to the concern raised by the CGTP–IN with regard to the relaxed procedural requirements and the effects of unlawful dismissal introduced by the 2009 Labour Code, the Government refers to the modifications introduced by Act No. 23/2012 of June 2012 regarding the investigation to be conducted by the employer following a disciplinary notice, the effects of unlawful dismissal, and compensation in lieu of reinstatement. The Committee requests the Government to continue to provide information concerning Article 10 of the Convention, including examples of court rulings giving effect to this provision.