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10 types of Employment Contracts in Portugal to know

Are you about to start a new job? Find out what types of employment contracts are in Portugal, when they expire, when the trial period ends, among other issues. Take note of your rights and duties.

Depending on the activity, the type of company, the needs of the business and the worker, the type of contract may vary. Issues such as duration, expiry and trial period tend to change in different types of employment contracts in Portugal.

For those who are currently entering the job market, whether because they have finished their studies or have just immigrated to Portugal, it is essential to be up to date with the legislation.

Discover the main types of employment contracts in Portugal, the main differences between them and the stipulated conditions that affect your professional life. 

What is an employment contract?

According to the
article 11 of the Labor Code, the employment contract is “one by which a natural person undertakes, for remuneration, to provide their activity to another person or persons, within the scope of the organization and under their authority”.

In other words, it is a official document signed by the employer and employee, which contains the working conditions necessary for the performance of professional activity. That is, the time, place, holidays, salary, allowances and other rights or benefits.

Employment contracts in Portugal are regulated, firstly, by the Labor Code of the Portuguese Republic. And they may also be the responsibility of complementary laws, collective work agreements and institutions such as the ACT (Working Conditions Authority).

What are the elements you should pay attention to?

The main differences between the different types of employment contracts in Portugal relate, above all, to the
duration, expiry and trial period.

The duration and renewal of an employment contract varies depending on its type. Some may not have a scheduled end or be renewed at the end of the term, for the same period. Just as there are contracts that do not allow renewal, when so defined. 

Normally, there are still some mandatory elements that must not be missing from employment contracts in Portugal:

  • Identification, address and signatures of the grantors;

  • Activity to be performed and remuneration;

  • Location and hours of work;

  • Work start date;

  • Stipulated or predicted end date, respectively, and the reason for the end, for fixed or uncertain term contracts;

  • Contract date.

The 10 most common types of employment contracts in Portugal

Find out now which types of employment contracts are most celebrated in Portugal between workers and employers and find out what their specificities are:

1. Fixed-term employment contract

This is a contract that has a
start and end date. According to article 140 of the Labor Code, this type of contract can only be concluded for certain temporary needs of the company, such as:

  • Replacement of workers who are absent or unable to work;

  • Seasonal activities or those with temporary needs;

  • Short-term works;

  • First contract with young people looking for their first job;

  • Exceptional increase in the company’s activity;

  • Hiring someone in a long-term unemployment situation.

The fixed-term contract has the
maximum duration of 2 years. It can be renewed a maximum of 3 times, as long as the total duration of the renewals does not exceed the maximum stipulated period and the company's temporary need remains. 

Already the trial period lasts 30 days. The advance notice for contracts of less than 6 months is 15 days; for more than 6 months, it is 30 days. Termination may also occur at the end of the term, by mutual agreement, or unilaterally with prior notice.

2. Uncertain fixed-term employment contract

Unlike a fixed-term contract, this type of contract does not have a defined duration. That is, the employment contract for an uncertain term
does not have an end date. Beforehand, a forecast date for completion is indicated.

Its objective is to meet the temporary needs of a company, the duration of which for completion is not certain. It can be used when employees are needed for a project with no deadline, or to replace someone who has no date to return to work.

However, the uncertain-term employment contract has a maximum duration of 4 years, according to the article 148 of the Labor Code. As for the trial period, the stipulated duration is similar to the fixed-term contract: 30 days. 

The employment contract for an uncertain term expires when the end of the expected period is reached. The employer must give notice between 15 and 60 days in advance, depending on the estimated duration of the contract. 

3. Open-ended employment contract 

It is a contract with
indefinite duration, which means that it does not have a previously fixed end date or can last indefinitely. Thus, it is assumed that the worker becomes permanent and becomes part of the company's staff. 

As a rule, an open-ended contract may appear after a fixed-term contract, when its duration or number of renewals is exceeded. 

O trial period is 90 days for the majority of workers, and 240 days for positions that involve high technical complexity and trust.

The end of the contract requires just cause or prior notice, which must be communicated 15 to 75 days in advance, depending on the worker's length of service. 

4. Part-time employment contract 

Also known as part-time work, it follows a
workload less than 40 hours per week. The agreement must be formalized in writing, otherwise it may be construed as a full-time contract. 

Working time cannot exceed 75% of 40 hours per week and can be worked on just a few days of the week, per month or per year. 

Although it is not a general rule, part-time workers may be entitled to basic remuneration and other benefits provided for by law, such as food allowance, holiday and Christmas allowance.

The part-time employment contract has indefinite or fixed-term duration, depending on the agreement; 30 day trial period for contracts of less than 6 months and 60 days for superior contracts; It is termination according to the same rules as fixed-term or open-ended contracts.

5. Very short-term employment contract

This is the shortest type of contract in Portuguese legislation, with a
maximum duration of 35 days. It is used to respond to an exceptional increase in activity, which may occur during high season in the agricultural or tourism sector. 

According to the article 142.º of the Labor Code, It is not mandatory to formalize the contract in writing. However, the company is always obliged to communicate this employment relationship to Social Security. 

The employee can enter into other contracts of this type throughout the year, as long as they do not exceed 70 days of work in the calendar year in this modality.

6. Temporary employment contract

It is a
fixed-term contract carried out between a worker and a temporary employment company who provides this service to another customer. In other words, although it is the temporary employment company who hires the worker, he performs functions for another company.

Thus, the temporary employment company assumes the role of employer and is responsible for paying the salary, work accident insurance and all rights provided for in the contract.

Large companies often use this method so as not to have to manage the entire recruitment and selection process, and can classify these expenses as outsourcing, and not as personnel expenses.

Fixed-term temporary employment contract can be renewed up to four times. Once this limit is exceeded, it becomes an open-ended employment contract.

7. Service provision employment contract

This modality is
used by self-employed workers who provide services to different clients and issue so-called green receipts. This contract is not always formalized in writing.

This is one of the most complex employment contracts in Portugal, as there is no type of employment relationship and workers have the duty to ensure a set of tax obligations (although they are entitled to the 1st year of tax exemption). 

8. Teleworking employment contract

Allows the
provision of remote work, outside the company's facilities, through information and communication technologies. This contract must be signed in writing, through an addendum to the initial contract or a separate document.

The teleworking employment contract has determined or indeterminate duration, according to the article 167 of the Labor Code. 

Also, according to the article 168 of the Labor Code, workers can be compensated for additional expenses, such as electricity, internet and water. 

9. Employment contract with a foreign worker

It consists of the contract concluded
between an employer in Portugal and a foreign worker. In this case, it refers to workers from countries that do not belong to the European Union or the Schengen Area and that do not have specific agreements with Portugal.

The employer must conclude this contract in writing and communicate the employment relationship to Social Security. The worker is obliged to present a work visa or residence permit

With regard to duration, trial period, termination and other rights and duties, the employment contract with a foreign worker follows the rules of the type of contract in which it falls. 

10. Internship contract

It aims to give
professional training in a supervised work context. An internship contract must formalize the terms of rights and duties of the employer and the intern. It covers the following types of internships:

  • Curricular stage: They are organized and regulated by educational institutions, serving for academic evaluation; And they are formalized through an Internship Protocol. They are normally unpaid. 

  • Extracurricular internship: They are promoted on the initiative of organizations without resorting to funding. It is mandatory to award a monthly internship allowance, with a value greater than or equal to the Social Support Index (IAS) and meal allowance.

  • Professional internship: Financed by community funds, they are under the responsibility of the Institute for Employment and Professional Training (IEFP). They are aimed at young people aged up to 30 or those who are unemployed. Remuneration is made according to the level of education.

The duration of internships varies depending on the type of internship. However, as a general rule, the internship contract
cannot last longer than 12 months

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