Portugal Employment Guide: Contracts, Leave and Ending Employment

Summary:

• Employers must give new hires the key terms in writing within 7 days of the start date and the rest within one month. Fixed-term, part-time, telework and non-EEA contracts must be in writing.
• Probation runs from 15 to 240 days depending on the contract and the role.
• Fixed-term contracts need a specific temporary reason, can last up to 2 years and renew up to 3 times.
• Employees get at least 22 working days of annual leave and 13 mandatory public holidays.
• Dismissal needs a legal ground and a formal procedure. There are four employer routes, and an unlawful dismissal can lead to reinstatement.

Portuguese employment law is set mainly by the Labour Code (Código do Trabalho, Law 7/2009), last reformed in depth by Law 13/2023, and by the collective agreements that apply in many sectors. A government proposal to rewrite parts of the Code, known as “Trabalho XXI”, was rejected by Parliament on 19 June 2026, so the rules below remain in force. This guide follows the employee lifecycle and covers employment law only. Employer costs, Social Security and income tax are covered on our Portugal employer of record and payroll pages.

Hiring in Portugal follows five steps: decide who will be the legal employer, confirm the right to work, give the employee the key terms in writing within 7 days of starting, report the hire and put the insurance and health arrangements in place, and prepare the workplace documents the law requires. Candidates from outside the EEA also need a visa and residence permit that allow them to work.

1. Decide who will be the legal employer. A company can employ through its own Portuguese entity or hire through an employer of record in Portugal, which becomes the legal employer while the client directs the day-to-day work.
2. Confirm the right to work. EU, EEA and Swiss citizens can work in Portugal without a work visa. Other candidates need a visa or residence permit that allows them to work (see the visa section below), and their contract must be in writing.
3. Issue the contract or written information. The key terms must reach the employee in writing within 7 days of the start date, and the remaining information within one month.
4. Report the hire and set up cover. The hire must be reported to Social Security before the employee starts, workplace accident insurance must be in place, and the employer must arrange occupational health services. Social Security, income tax and the 14-payment salary structure are explained on our Portugal payroll page.
5. Prepare the workplace documents. Employers must keep working time records and display a work schedule map, and must post information on equality and parental rights. Companies with 7 or more workers need a code of conduct against harassment, those with 50 or more need internal whistleblowing channels under Law 93/2021, and those with 75 or more must meet the disability quota under Law 4/2019 (1% of staff in medium companies, 2% in large ones).

The Labour Code protects candidates as well as employees. Employers cannot discriminate on the listed grounds, cannot ask about private life, health or pregnancy unless the role strictly requires it and the reason is given in writing, and can never require a pregnancy test. EU pay transparency rules will add duties on salary information, but Portugal has not yet passed its implementing law.

Article 24 of the Code gives candidates a right to equal opportunities and treatment in access to employment. The protected grounds include ancestry, age, sex, sexual orientation, gender identity, marital status, family situation, economic situation, education, social origin, genetic heritage, reduced working capacity, disability, chronic illness, nationality, ethnic origin or race, language, religion, political or ideological beliefs and trade union membership. The rule also applies to decisions made by algorithms or other artificial intelligence systems.

Under Article 17, an employer cannot require a candidate to provide information about their private life unless it is strictly necessary and relevant to assess their suitability for the job, with the reasons given in writing. Information about health or pregnancy can only be requested where the nature of the role justifies it, again with written reasons, and it goes to a doctor, who tells the employer only whether the person is fit for the work.

Article 19 applies similar limits to medical tests. Outside the exams required by occupational health and safety law, tests can only be requested to protect the worker or others, or where the activity justifies them, and pregnancy tests can never be required. Treat criminal record requests with the same caution and ask only where the law or the nature of the role justifies it.

Directive (EU) 2023/970 gives candidates the right to know the starting pay or pay range for a role and bars employers from asking about pay history. Member States had to transpose it by 7 June 2026. Portugal published a draft bill for partial transposition on 5 August 2026, with public consultation until 25 August, and at the time of writing (November 2026) the draft has not become law. Our article on European pay transparency sets out what the Directive requires.

Most Portuguese employment contracts do not have to be in writing, but the employer must give the employee written information on the key terms within 7 days of starting and on the rest within one month. Fixed-term, part-time and telework arrangements and contracts with non-EEA workers must be in writing. Probation runs from 15 to 240 days, and fixed-term contracts need a specific temporary reason.

Articles 106 and 107 require the employer to provide the following in writing within 7 days of the start of the contract, on paper or electronically:

• The employer’s identity and registered office, including any group relationship
• The place of work, or a statement that the work takes place in several locations
• The employee’s category or a summary of the role
• The date of the contract and the date it takes effect
• The end date or expected duration of a fixed-term contract
• The amount, frequency and method of payment, broken down by component
• Normal daily and weekly hours, and the rules on overtime and shifts
• The length and conditions of any probation period

Within one month, the employer must add annual leave, notice periods and formalities, the accident insurance policy and insurer, any applicable collective agreement, the right to continuous training, social protection arrangements and the criteria of any algorithm or AI system that affects hiring or working conditions. A written contract that contains this information meets the duty, and the employer must keep proof that it was delivered.

Check whether a collective agreement or extension order applies to the sector, since these can set job categories, pay scales and working time rules beyond the Code.

During probation, either side can end the contract without notice, cause or compensation, unless a written agreement says otherwise. The employer must give 7 days’ notice if the probation has lasted more than 60 days and 30 days if it has lasted more than 120 days, or pay for the missing days. An abusive termination is unlawful. Terminations affecting pregnant workers, recent mothers, workers on parental leave and carers must be reported to the equality commission (CITE) within 5 working days, and those affecting first-time job seekers or the long-term unemployed to the labour inspectorate within 15 days.

A fixed-term contract is only allowed for a temporary need that the employer defines objectively, and only for as long as that need lasts. The Code’s examples include replacing an absent employee, seasonal work, an exceptional increase in activity, and a defined, non-lasting task or project. A company with fewer than 250 workers can also use one in the first two years after launching a new activity or opening, and any employer can use one to hire someone in very long-term unemployment. The employer must be able to prove the reason.

• Form: the contract must be in writing and state the facts behind the reason, linking them to the duration. If the reason or the writing is missing or insufficient, the contract is treated as open-ended.
• Duration: a contract with a set end date can last up to 2 years and renew up to 3 times, with total renewals no longer than the initial period. A contract with an uncertain end date can last up to 4 years.
• Reporting: the contract and its reason must be reported to the works council and the worker’s union within 5 working days, and to the labour inspectorate.
• Preference: for 30 days after the contract ends, the worker has preference if the employer recruits externally for the same role.

A clause that limits someone’s freedom to work after the contract ends is void unless it meets Article 136. A non-compete must be agreed in writing, cover an activity that could harm the employer, last no more than 2 years (3 for roles of special trust or with access to sensitive competitive information), and include compensation for the worker during that period.

Normal working time is limited to 8 hours a day and 40 hours a week, and hours can be averaged by agreement or through a time bank. Overtime is capped at 150 or 175 hours a year depending on company size. Telework needs a written agreement, the employer covers the additional expenses, and employers must not contact employees during rest periods except in cases of force majeure.

The Code offers three main ways to average hours. Individual adaptability lets the employer and employee agree up to 2 extra hours a day and 50 hours a week, and a written proposal is treated as accepted if the employee does not object within 14 days. A collective agreement can allow up to 4 extra hours a day and 60 hours a week, averaging no more than 50 over two months. A group time bank, approved by at least 65% of the workers concerned in a referendum, allows up to 2 extra hours a day, 50 hours a week and 150 hours a year.

Overtime is limited to 175 hours a year in micro and small companies and 150 hours in medium and large ones, and to 2 hours on a normal working day. A collective agreement can raise the annual limit to 200 hours.

• A break of 1 to 2 hours, so that the employee does not work more than 5 consecutive hours (6 if the working day is longer than 10 hours)
• 11 consecutive hours of rest between working days, with exceptions such as management roles exempt from set hours
• At least one day of rest a week, usually Sunday

Unless a collective agreement says otherwise, night work is work between 10pm and 7am. A night worker on activities with special risks or significant strain cannot work more than 8 hours in any 24-hour period of night work.

Article 202 requires the employer to keep a record of start and end times and breaks for every employee, including those exempt from set hours, in a place where it can be checked immediately. Records must be kept for 5 years.

Telework depends on a written agreement that covers the place of work, hours, schedule, pay, who owns the equipment, and how often in-person contact takes place. If nothing is agreed, in-person contact must take place at least every two months. Fixed-term arrangements last up to 6 months and renew automatically, and open-ended ones can be ended with 60 days’ written notice.

• Refusing a request: if the role is compatible with telework, the employer can only refuse an employee’s proposal in writing and with reasons. An employee can refuse an employer’s proposal without giving reasons.
• Automatic right: an employee with a child up to 3 years old (or any age with a disability, chronic illness or cancer who lives with them) has a right to telework if the role allows it and the employer has the resources. The right can extend to age 8 in some cases, except in micro companies. Victims of domestic violence and some carers also have this right.
• Expenses: the employer provides the necessary equipment or agrees that the employee buys it, and must fully compensate proven additional expenses.
• Privacy: a visit to an employee’s home needs 24 hours’ notice and the employee’s agreement. Monitoring through image, sound, writing or history capture is prohibited.

Article 199-A applies to all employees, not only those on telework. The employer must not contact an employee during their rest period except in cases of force majeure, and treating someone less favourably because they use this right counts as discrimination.

An employee with a child under 12 (or any age with a disability or chronic illness, if the child lives with them) can ask to work flexible hours or part-time, with a written request made 30 days in advance. The employer has 20 days to respond and can only refuse for compelling business reasons or because the employee cannot be replaced. A refusal goes to the equality commission (CITE), and if its opinion is unfavourable, the employer needs a court decision. Recognised carers also have a right to flexible hours.

Employees in Portugal are entitled to at least 22 working days of paid annual leave and 13 mandatory public holidays. Parental leave is set by statute and shared between parents, and it includes mandatory periods for both the mother and the father. The Code also protects absences to care for a child or family member, bereavement and marriage.

The entitlement is at least 22 working days a year, earned on 1 January and generally based on work in the previous year. In the year of hiring, an employee earns 2 working days per month of the contract, up to 20 days, which can be taken after 6 full months.

Leave cannot be exchanged for money, although an employee can give up days above the first 20 and keep the pay for them. Dates are set by agreement. If there is no agreement, the employer sets them after consulting worker representatives, and small, medium and large companies can only do so between 1 May and 31 October unless a collective agreement or the representatives’ opinion allows otherwise. Leave can be split by agreement if at least 10 working days are taken in a row. The leave map must be ready by 15 April, and leave can be carried over to 30 April of the following year by agreement.

Portugal has 13 mandatory public holidays. Good Friday can be observed on another local date in the Easter period, and Carnival Tuesday (9 February in 2027) and the municipal holiday are optional unless a collective agreement or the contract includes them. An employee who does normal work on a public holiday in a business that does not have to close is entitled to compensatory rest of half the hours worked or a 50% pay supplement, as the employer chooses.

Complementary parental leave and leave to care for a child need 30 days’ written notice, and any foreseeable absence must be notified at least 5 days in advance. Sick leave is a justified absence, and an employee covered by Social Security sickness protection does not receive pay from the employer for it. Dismissing a pregnant worker, a recent mother or a worker on parental leave needs a prior opinion from the equality commission (CITE).

Disciplinary action in Portugal follows the Labour Code. The employer can only choose from a set list of sanctions, must hear the employee first, and must apply a sanction proportionate to the offence. Proceedings must start within 60 days of the employer learning of the offence. Poor performance alone is not a separate ground for dismissal, so it needs to be handled as a disciplinary matter or through the rules on unsuitability.

Article 328 lists the sanctions available: a reprimand, a registered reprimand, a fine, loss of holiday days, suspension without pay or seniority, and dismissal without compensation. A collective agreement can add others, but not ones that harm workers’ rights. The Code sets limits:

• Fines cannot exceed one-third of daily pay for offences committed on the same day, or 30 days’ pay in a calendar year, and the money goes to Social Security rather than to the employer.
• Loss of holiday days cannot take the employee below 20 working days of leave.
• Suspension cannot exceed 30 days per offence or 90 days in a calendar year.

• The employer must start proceedings within 60 days of the employer, or the manager with disciplinary authority, learning of the offence.
• The right to discipline lapses one year after the offence, unless it is also a crime with a longer limit.
• Proceedings lapse if the employee is not notified of the final decision within a year of them starting.
• No sanction can be applied without first hearing the employee.
• Only one sanction can be applied per offence, and it must be applied within 3 months of the decision.

Once proceedings have started, the employer can suspend the employee on full pay if their presence would be inconvenient. An employer that learns of alleged harassment must open disciplinary proceedings.

Portuguese law has no separate route for dismissing someone because they are underperforming. Abnormal reductions in productivity can amount to just cause, but only where the employee is at fault and the conduct makes the relationship impossible to continue. Where the employee is not at fault, the route is dismissal for unsuitability, which has strict requirements. Written performance criteria also matter, since they feed into selection in a job extinction and into the unsuitability route for technical and management roles.

Portugal does not allow dismissal at will. An employer can only dismiss through one of four routes: just cause, collective dismissal, job extinction or unsuitability. Each has its own procedure, and failing to follow it can make the dismissal unlawful. Employment can also end by mutual agreement, by the expiry of a fixed term or by the employee’s resignation, which needs 30 or 60 days’ notice.

Just cause means culpable conduct so serious that it makes the employment relationship immediately and practically impossible to continue. Examples in Article 351 include unjustified absences on 5 consecutive days or 10 separate days in a calendar year, repeated conflict and violence. The procedure has these steps:

1. The employer sends a written note of guilt (nota de culpa) that describes the facts in detail and states its intention to dismiss, with a copy to the works council and, for a union representative, to the union.
2. The employee has 10 working days to review the file and reply in writing, and can ask for evidence to be gathered.
3. The employer carries out the evidence requested, and does not have to hear more than 3 witnesses per fact or 10 in total. It then sends the file to the works council, which has 5 working days to give an opinion.
4. The employer has 30 days to issue a reasoned written decision. After that, the right to dismiss lapses. The decision can only rely on facts contained in the note of guilt or the reply.

Micro companies follow a simplified procedure, unless the employee is a works council member or a union representative.

Both routes apply to market, structural or technological reasons. A collective dismissal covers at least 2 workers in a micro or small company, or 5 in a medium or large company, within any 3-month period. Job extinction covers individual posts where collective dismissal does not apply. A micro company has fewer than 10 workers, a small one 10 to 49 and a medium one 50 to 249.

• Collective dismissal: the employer writes to the workers’ representatives, or to each worker if there are none, setting out the reasons, the workforce, the selection criteria, the numbers and the timing, with a copy to the labour ministry. It must then start information and negotiation within 5 days, and can issue decisions once an agreement is reached or 15 days after the first communication.
• Job extinction: the post must be genuinely eliminated, the reasons cannot be the employer’s or employee’s fault, there can be no other compatible post, and no fixed-term contracts for the same tasks. If several people do the same job, the Code sets the order of selection, starting with the worst performance rating on criteria known in advance, followed by lower qualifications, higher cost, less experience and less seniority. Workers and their representatives have 15 days to respond.

A dismissed worker receives compensation of 14 days’ base pay and seniority payments per full year of service, with older periods of service under transitional rules and caps set out in Article 366. An employer cannot outsource the work of those dismissed through a collective dismissal or job extinction for the following 12 months.

Unsuitability (inadaptação) covers a continued fall in productivity or quality, repeated equipment breakdowns, or risks to health and safety, caused by how the employee does the job. Where the post has changed through new processes or technology in the previous 6 months, the employer must have provided suitable training and at least 30 days of adaptation, and must have no other compatible post. Where the post has not changed, the employer must also show a substantial change in the employee’s work and give written instructions to correct it. In technical and management roles, failure to meet objectives agreed in writing can also qualify.

For collective dismissal and job extinction, the employer must give the following minimum notice period. If it gives less notice, the contract only ends when the missing period has run, and the employee is paid for it.

An employee who resigns must give written notice of 30 days with up to 2 years’ service or 60 days with more. A collective agreement or the contract can extend this to up to 6 months for management or senior roles.

A fixed-term contract with a set end date expires if the employer gives 15 days’ written notice or the employee gives 8 days, and otherwise renews. On expiry by the employer, the worker is entitled to compensation of 24 days’ base pay and seniority payments per full year of service.

A mutual termination agreement must be in writing, signed by both parties and state its date, its effective date and the employee’s right to cancel. The employee can cancel in writing up to the seventh day after signing by returning any compensation received, unless the signatures were notarised in person.

A dismissal is unlawful if its reason is rejected by the court, if the procedure was not followed, if it was based on political, ideological, ethnic or religious grounds, or if the opinion of the equality commission (CITE) was not requested for a protected worker. Only a court can decide. The employee has 60 days to challenge a dismissal using the official form.

If the dismissal is unlawful, the employer must compensate all damage, pay the wages lost until the decision becomes final, and reinstate the employee. The employee can instead choose an indemnity of 15 to 45 days’ base pay and seniority payments per year of service, with a minimum of 3 months. A micro company, or the employer of a manager or director, can ask the court to exclude reinstatement, and then the indemnity is 30 to 60 days per year with a minimum of 6 months.

EU, EEA and Swiss citizens can work in Portugal without a work visa. Other nationals generally need a visa from a Portuguese consulate and then a residence permit from AIMA, the agency for integration, migration and asylum. The main options for a local hire are the residence visa for subordinate work, the visa for highly qualified activity and the EU Blue Card.

The Foreigners Law (Law 23/2007) was amended by Law 61/2025 and again by Law 62/2026 of 10 September 2026, so check the current requirements before starting an application. Our article on Schengen work permits for non-EU hires explains how permits compare across Europe.

Citizens of the Community of Portuguese Language Countries (CPLP), such as Brazil, have a dedicated visa route. Holders of a residence permit for work must have an employment contract and be registered with Social Security, and can change employer by notifying AIMA, without needing a new residence card.

The employment contract with a non-EEA worker must be in writing, in two copies, and must refer to the visa or residence permit, the employer’s activity, the role and pay, the place and hours of work, and the dates of signature and start. The employer’s copy must have the immigration documents attached. Tax regimes for people moving to Portugal are covered in our article on the NHR reform and IFICI.

Sources

• Portuguese Labour Code, Law 7/2009, consolidated text (PGD Lisboa)
• Foreigners Law, Law 23/2007, consolidated text (PGD Lisboa)
• Ministry of Foreign Affairs: national visa documentation
• Ministry of Foreign Affairs: change to the job-seeker visa regime
• Law 62/2026 amending the Foreigners Law (Diário da República)
• Law 93/2021 on the protection of whistleblowers (Diário da República)
• Law 4/2019 on employment quotas for people with disabilities (Diário da República)
• Government guide: Social Security duties of employers in Portugal
• Directive (EU) 2023/970 on pay transparency