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With the deepening of globalization, when enterprises expand their business in multiple countries, cross-border labor compliance has become one of the most complex and severe challenges. To help enterprises systematically address this issue, we have collaborated with top labor lawyers from over 50 major jurisdictions worldwide (all recommended by Chambers, The Legal 500, or equivalent institutions) to jointly compile a Chinese-English labor & employment compliance guide exceeding 1 million words, and we will continuously update relevant key points.

This article publishes the key points of labor & employment compliance by September 2025 in Portugal. 

01 Overview of the Labor Law System

1.Legal System

Portugal operates under a civil law system.

2.Resources and Agencies

Its main statutes and regulations on labor and employment are the Labor Code, the Labor Procedure Code, the General Law on Employment in Public Functions, national legislation on special employment contracts, Social Security legislation, occupational health and safety legislation, social regulation in specific activity sectors, complementary national labor legislation and collective bargaining agreements.

02 Employment Qualifications and Classification

1.Employment Age

The minimum age for establishing an employment relationship is 16 years. However, minors under the age of 16 who have finished compulsory education or who are enrolled in and attending the secondary level of education may perform light duties.

2.Qualifications for Employment

A foreign business may hire locally without having a permanent establishment.

3.Classification of Employment

The Labor Code establishes a presumption of employment contract. According to this presumption, an employee can claim they have an employment contract when at least two of the following conditions apply:

a）The work is performed in a place that belongs to the employer;

b）The equipment and work instruments used belong to the employer;

c）The employee must comply with the start and end times of service determined by the employer;

d）The employee receives regular and precise compensation for their work;

e）The employee performs management or leadership duties within the company’s organizational structure.

4.Foreign Workers

In order to work in Portugal, foreign workers can apply for the following visas:

? residency visa

? Job seeker visa

? Temporary stay visa for seasonal work for a duration of over 90 days

? Temporary stay visa for independent work

? Temporary stay visa for scientific research, higher education professorial activity or highly qualified activity purposes for a period of less than a year

? Temporary stay visa for the exercise of a professional activity done remotely – "digital nomads"

? Temporary stay visa for amateur sports purposes

? Temporary stay visa for transfer of workers purposes for state parties to the WTO, for provision of services or professional training.

03 Recruitment and Employment Contracts

1.Background Examination

While background checks are not explicitly prohibited under Portuguese law, they are subject to strict limitations derived from the General Data Protection Regulation, Law no. 58/2019, which implements the GDPR nationally, and the Labor Code.

2.Contract Types

Currently, there are the following types of employment contracts:

? Permanent/Open-ended contracts

? Fixed-term contracts

? Very short-term contracts

? Part-time work contracts

? Intermittent work contracts

? Commission of service contracts

? Remote work contracts

? Temporary work contracts

3.Probationary Period

During the probationary period the parties may terminate the contract without cause, prior notice and compensation. However, if the probation period lasts for more than 60 days, the employer must comply with a 7-day prior notice and if it lasts for more than 120 days, with a 30-day prior notice. The non-compliance with the mentioned prior notice only results in the compensation to the employee of the missing prior notice.

04 Working Standards

1.Remuneration and Statutory Benefits

Remuneration can be paid in cash or by bank transfer (most common). It must be paid in determined and equal periods of time, usually weekly, bi-weekly or monthly and it shall be paid on a working day and be available to the employee on the due date or the previous working day. While Portuguese law does not explicitly mandate a specific mode of payment, legal tender (€) is implied.

2.Social Security and Employment Taxes

Portugal has a mandatory social security system that provides retirement pensions, unemployment benefits, sick leave, parental leave, benefits for work-related accidents and family benefits. Contributions are shared between employers and employees based on the employee’s gross monthly salary.

3.Working Hours

The Labor Code establishes the following types of working hours:

? Standard working hours

? Flexible working hours

? Exemption from working hours

? Adaptability regime

? Bank of hours regime

? Concentrated working period regime

? Shift work

? Night work

4.Rest and Leave

Workers are entitled to a daily rest period of at least 11 consecutive hours between 2 consecutive daily work periods and to a weekly rest period of at least 1 day per week. The latter must take place on a Sunday, except on the legally permitted situations (e.g. businesses that are legally allowed to work 24-7). Collective bargaining agreements may also establish complementary weekly rest periods.

05 Occupational Health and Special Protection

1.Occupational Health and Security

All employees are entitled to perform their work in a manner that ensures their health, safety and dignity. On the one hand, occupational safety involves the prevention of workplace accidents through the identification, assessment, and control of professional risks. On the other hand, occupational health encompasses the assurance of protecting and fostering the physical and mental well-being of workers.

2.Special Protection

Portuguese labor law establishes special protections and measures for vulnerable workers to ensure equality, non-discrimination and inclusiveness:

? Women, pregnancy, and parental rights

? Elderly workers

? Workers with disabilities or reduced work capacity

? Minors

? Other vulnerable groups

06 Personal Information and Privacy

1.General Rules

In Portugal, the primary legislation that guides privacy and protection of personal data for employees is EU Regulation 2016/679, along with Law no. 58/2019.

2.Transnational Transfer

Employers transferring employees’ personal data outside the EEA must ensure the data remains protected at a level equivalent to EU standards.

07 Anti-Discrimination and Anti-Harassment

1.General Rules

Portuguese labor law expressly prohibits workplace discrimination on multiple grounds, including ancestry, age, sex, sexual orientation, gender identity, marital or family status, economic or social condition, education, nationality, ethnicity, religion, political or ideological beliefs, disability, chronic illness, and union membership.

08 Internal Policies

1.Applicability

Portuguese employers may regulate employment relationships through internal policies and regulations, covering areas such as codes of conduct, use of communication systems, confidentiality, data protection, health and safety, harassment prevention, attendance, working time, and telework arrangements.

2.Validity

Parent company policies, whether established inside or outside Portugal, cannot be automatically applied domestically. Any internal regulations implemented locally must comply with the Labor Code, collective bargaining agreements and statutory employee rights. Subsidiaries may align with group policies, but they must adapt them to Portuguese law and ensure proper consultation and publication. Non-compliance may compromise enforceability.

3.Whistleblowing

Entities that employ 50 or more employees must implement a comprehensive compliance program, which shall include:

? A Corruption and Related Offences Risk Prevention Plan (PPR);

? A Code of Conduct;

? An internal training program addressed to all employees and management;

? A whistleblowing channel ensuring the secure submission and appropriate follow-up of reports.

09 Transactions

1.Employment Relationship

In the event of a merger, acquisition or transfer of a company or establishment, the existing employment contracts are generally upheld. Consequently, the terms and conditions of employment, including positions, remuneration, contractual terms and seniority, are to be respected by the new employer.

2.Compensation

Employment contracts are the responsibility of the new employer and remain unaltered. In such instances, there is no inherent entitlement for employees to receive compensation merely as a consequence of a merger, acquisition, or transfer of a company, establishment or assets.

10 Termination of Employment

1.Termination Grounds

Employers are prohibited from dismissing employees at will. Any such termination of employment must be substantiated by a legitimate justification. Article 338 of the Labor Code expressly prohibits dismissal without just cause, thereby ensuring that employees are protected against arbitrary termination.

2.Termination Procedure

The termination of an open-ended employment contract without just cause is considered unlawful. However, a distinction is to be made for fixed-term contracts. In such cases, the employer may terminate the contract upon its expiry.

3.Termination Protection

Termination of an open-ended contract is prohibited, if it is not based in just cause or it is used for political or ideological reasons. It is unlawful for an employer to oppose, sanction or treat an employee unfavorably for the exercise of their rights.

4.Severance and Compensation

Portuguese labor legislation expressly establishes the right to severance pay upon termination of employment. The amount and conditions of this pay vary according to the type and circumstances of the termination.

5.Wrongful Termination

In the event that the dismissal is declared unlawful, the employer shall:

? Compensate the employee for all damages incurred;

? Reinstate the employee in the same establishment of the company, without prejudice to their position and seniority.

6.Mass termination and Layoffs

The Labor Code stipulates that employers must:

? Engage in a consultation process with employee representatives or unions to discuss the reasons for the proposed collective dismissal, potential alternatives, and measures to mitigate its effects.

? Notify the relevant authorities and provide documentation detailing the proposed dismissals.

11 Confidentiality, Non-Compete, and Non-Solicitation

1.Confidentiality

Portuguese law does not impose a general statutory duty requiring employees to sign confidentiality agreements. However, it is common practice for employment contracts to include confidentiality clauses applicable to all staff, given their potential access to sensitive information such as internal data, know-how or strategic business information.

2.Non-Compete

It is both legal and permissible under Portuguese law to include non-compete and non-solicitation clauses in employment agreements. With that said, these clauses must be subject to strict conditions to ensure their enforceability.

12 Work Representation and Trade Unions

1.Work Representation

Portuguese labor law provides for the establishment of employee representative bodies in the workplace, including workers' commissions. These bodies are legally recognized and serve to represent employees in accordance with the Labor Code and relevant legislation.

2.Trade Unions

In the interest of collective defense and the pursuit of their rights and interests, workers may form:

? Trade unions;

? Workers’ committees and subcommittees;

? Representatives of workers for occupational safety and health;

? Other structures provided for in specific legislation, namely European works councils.

13 Dispute Resolution

1.Procedures & Enforcement

Labor disputes in Portugal fall under the exclusive jurisdiction of the labor courts. Proceedings usually begin with a formal complaint by the employee or employer. While mediation may sometimes occur, the process typically involves mandatory preliminary steps, including conciliation attempts, hearings, and counterclaims. If unresolved, the case proceeds to full judicial review with evidence collection, witness testimony, and a final judgment.

2.Waiver & Enforcement

Under current Portuguese law, employees cannot generally waive statutory or contractual labor rights outside judicial proceedings. Recent amendments to the Labor Code stipulate that labor claim waivers are valid only if resulting from a judicial settlement formally ratified by a labor court. Waivers executed outside this judicial framework are deemed null and void. 

14 Others

1.Latest Development & Trends

A comprehensive legislative reform is currently underway. This reform addresses a range of issues, including economically dependent self-employed workers, digital platforms, remote work, parental rights and leave entitlements, fixed-term contracts, working time records, transfer of undertakings and collective bargaining.

2.Cultural and Religious Considerations

In terms of labor relations and workplace practices, Portugal is largely influenced by cultural and social factors rather than religious obligations. Portugal is a secular state and its labor legislation does not impose restrictions or duties based on religion.

* To avoid ambiguity, this article should not be regarded as legal advice.

Authors

Joana de Sá is a Partner and Head of the Employment Department at PRA-Raposo, Sá Miranda & Associados, Sociedade de Advogados, SP RL. She is an active member of several national and international organizations, including ILERA, Portuguese Labour Law Association, the Portuguese-German Chamber of Commerce and Industry, and the ICC Working Group on Business and Human Rights.

Translator

Zhou Hao, Master of Laws, Associate at Anli Partners. Areas of expertise: Labor Law, Dispute Resolution, ESG Compliance.