The Working Conditions Authority (ACT) is today sending notices to 80,000 companies that have 350,000 precarious workers out of the law with guidelines for converting those fixed-term contracts into open-ended contracts by September 10, the minister revealed to Dinheiro Vivo van Werk, Ana Mendes Godinho. After that period, employers who continue to work irregularly “will be subject to inspection actions and possible sanctions,” he warned. Fines can amount to € 61,200.
According to the minister’s accounts, the 80,000 companies targeted represent “8.8% of the total of those who are active in social security, that is, who have employees,” according to the minister of labor. Asked about the sectors most likely to default, Ana Mendes Godinho said that “the notifications were for companies in all areas”, adding that “later it will be possible to obtain concrete information on the number of companies by activity”. The 350,000 workers with irregular contracts “correspond to 19% of contract workers in Portugal”, the minister explains.
“The emblematic measure, registered in the Agenda for Decent Work, which allows the linking of data between ACT and Social Security, made it possible to identify situations where the maximum duration of fixed-term contracts had already been exceeded,” the official clarified. In this sense, and in the context of “the fight against insecurity, ACT will promote a mass regularization of employment contracts in a rapid and effective manner”, he stressed.
“Employers should go to the Direct Social Security website and correct the bond type. This is the first major inspection action, it’s the Decent Work Agenda on the ground.” – Ana Mendes Godinho, Minister of Labour
In the communication that the ACT will send to the companies, there will be “a list of all employees whose contracts have already exceeded legal limits and must be converted to permanent contracts,” he explained. “To do this, employers must go to the Direct Social Security website and correct the type of bond,” he explained, emphasizing that “this is the first major inspection action in Portugal”. “It is the decent work agenda on the ground to promote decent work and fight insecurity,” stressed Ana Mendes Godinho. The official warned that “after Sept. 10, the ACT will review whether the companies have regularized all situations and even whether there were employees who are no longer included in the notices to Social Security,” which could indicate an unfair dismissal.
Duration and extensions
The 350,000 precarious contracts identified by ACT relate to fixed-term, uncertain and temporary contracts, to which rules must be observed. Since 2019, fixed-term contracts have a maximum term of four years, compared to six years before. Fixed-term loans can only last for two years, whereas previously they could last up to three years. In addition, they are limited to three renewals, with each renewal not exceeding the initial term of the contract.
Fixed-term temporary agency work underwent some changes with the approval of the Decent Work Agenda, which came into force on 1 May. For example, this type of contract, which is normally between the employee and an employment agency who then transfers it to another entity, now has a maximum of four renewals, where six were previously allowed. There is also a nuance here, introduced in the law to prevent precarity: those employment agencies are not allowed to conclude consecutive contracts with the same employee for different companies for more than four years. In the new Labor Code, article 182.º states that “a temporary employment contract exceeding the above-mentioned limit is converted into an employment contract for an indefinite period of time until broadcasting”. That is, the employee becomes part of the personnel of the employment agency, even if he is transferred to other entities.
There is another limitation that must be respected, which blocks the succession arrangement of fixed-term contracts in order to avoid deadlines. Thus, companies cannot hire the same employee whose contract has expired for the same positions before a third of the period of the original contract has expired.
Failure to comply with these rules can lead to control actions by the ACT and, in the extreme, to light, heavy or very heavy fines. “For example, fixed-term contracts concluded outside the assumptions provided for by law entitle to a very serious administrative offense,” says Dinheiro Vivo attorney Filipa Gonçalves, of Dower Law Firm’s Labor Department. In this case, the fine can be up to 61,200 euros.
Despite the action of the ACT, the lawyer points out that “the direct consequence of exceeding the deadlines of fixed-term contracts is the automatic conversion to open-ended contracts”.
Salomé Pinto is a journalist for Dinheiro Vivo
Source: DN
