Labor reform in Portugal changes the rights of foreigners

Understanding labor opportunities and laws in Portugal is essential for anyone planning to move to the country. This is because, in May of this year, the Brazilian labor reform came into effect, with more than 70 legislative changes.

With the implementation of the Decent Work Agenda 2023 (ATD 2023), through Law No. 13/2013, of April 3, 2023, the new legislation changed provisions of the Portuguese general labor law, procedural legislation, Social Security (which, in Brazil, corresponds to Social Security), among other provisions.

But the legislative changes do not stop there. However, the initial text of the labor reform was subject to (i) rectification (Declaration of Rectification No. 1). And soon more legislative innovations should emerge regarding the Portuguese “ATD in Public Administration.”

It is worth highlighting that ATD 2023 brought new developments in several aspects, such as: (i) new measures or techniques to combat precariousness, (ii) work on digital platforms, (iii) new developments in terms of licenses, (iv) the creation of an “informal caregiver” employment status, (v) a new regime for fixed-term employment contracts and temporary employment contracts, (vi) equality and non-discrimination, (vii) innovative rules for collective bargaining, (viii) strengthening of inspection activities, among others.

Within the scope of the ATD 2023 regulations, regarding the level of foreign labor and in light of the (most recent) Foreigners' Law, some new developments have emerged. However, it is worth noting that the changes could have gone further, that is, further.

For example, the issue of international recruitment, foreigners' rights, and remote work in Portugal stand out. With the introduction of the so-called "digital nomad visa" (Article 61, B of Law 23/2007, of July 4), the demand for this type of work increased and was amended by Law No. 18/2022, of August 25.

Therefore, to apply for this type of work visa, the foreign citizen simply needs to have (i) a service provision contract or (ii) an employment contract, demonstrating the relationship, regardless of its nature.

The law states:

A residence visa is granted to subordinate workers and independent professionals to carry out professional activities remotely to individuals or legal entities with their domicile or headquarters outside the national territory, and the employment relationship or provision of services must be demonstrated, as the case may be.

This visa was created for teleworking, "home office," remote work, or distance work. In these terms, it's important to remember that a nomad (at least for work or "employment" purposes) is someone who carries out their professional activity without a fixed location.

According to information published in the Portuguese press, this instrument has been positively requested by Brazilian citizens who are involved in this way of working (or even living).

However, some doubts must be raised. Portuguese law has, at least apparently, omitted the work promise regimes (which are common negotiation instruments for obtaining other visas to date). It also overlooked an opportunity to better articulate the teleworking regime, provided for in the Portuguese Labor Code, which appears to be inflexible, with the foreign worker regime, which has been progressively made more flexible and easier.

Regarding the addition to the Code of Contributory Regimes (art. 33-A), within the scope of ATD 2023, the new law determines that:

“Whenever the employer communicates the admission of a foreign or stateless worker outside the cases provided for in paragraph 6 of article 5 of the Labour Code, or the termination of the corresponding contract, the inspection services of the Authority for Working Conditions shall be notified”.

Portuguese law follows its own criteria regarding (i) how employment contracts with foreigners (outside the scope of the European Union) are drafted and (ii) the actual presentation of information duties.

Thus, since the “old law”, these types of contracts have always been subject to a written form, obligatorily, and comply with the specifications of the documents that authorize the foreign worker to (i) reside, or (ii) work in Portugal (for example, residence permit, or foreign student permit authorized to carry out a professional activity in Portugal).

The strengthening of the Labor Administration's oversight powers takes on new dimensions in the face of international recruitment, particularly against the hiring of workers who are illegally in Portugal.

This objective is clear in light of the new law, which requires mandatory notification of inspection services in the event of admission (signing of an employment contract), as well as in the event of termination of the employment relationship, regardless of the reason or cause.

In a general note, ATD 2023 sought to “aggravate” the administrative regime (punitive administrative regime) in the event of non-compliance with labor and social security standards.

Therefore, the admission of foreign workers increasingly requires employing companies to reinforce their care and due diligence (“DD”) in light of the new law.

Within the scope of the ATD2023 regulation, in terms of social protection, the position of foreign workers was clarified and strengthened.

The most recent legislative change – which came to regulate the social protection of workers within the scope of ATD 2023 (article 28, § 2 of Decree-Law no. 53/2023, of July 5) – now provides for the use or non-use (cumulation or accounting/non-cumulation or non-compatibility) of social benefits granted by foreign Social Security systems (for example, the Brazilian Social Security).

This is a note that foreign citizens must consider when exercising parental leave and for the purposes of granting the corresponding benefit. The law provides for the rules of international treaties that may be in force with the Portuguese State. This is the case in Brazil, with the Social Security Agreement between Portugal and Brazil.

Furthermore, the law now expressly states (article 8 of the same Diploma) that:

“For the purposes of compliance with the guarantee period, periods of registration of remuneration or legally equivalent situation in any mandatory social protection regimes, national or foreign, which ensure cash protection benefits in the event of maternity, paternity and adoption are considered, provided they do not overlap”.

The granting of social benefits in Portugal depends on an important requirement known as the “guarantee period”, that is, a period of time for registering remuneration and paying social contributions to Social Security services or, for example, Social Security.

The new law allows it to be counted as a guarantee period. Foreign citizens can benefit from this Portuguese social protection regime by considering compliance with a (considered) guarantee period under a foreign social protection regime, even if they meet the requirements identified above.

It's worth noting that, according to the Portuguese government, the legal population of Brazilian citizens in Portugal surpassed 300,000 in the first half of this year. In December 2022, the number reached 233,100.

As a final note, we remind you that these aspects impact not only the professional lives of workers, but also their personal situation (individual or family), as (foreign) citizens in Portugal.

Furthermore, with the use of new technologies and new ways of providing services, it is expected that more labor changes are yet to come.

Text originally published on September 6, 2023 on the Estadão website.