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Labour reform negotiations stall as UGT rejects proposal

Thursday, 23 April 2026AI summary
🏛️ Government💼 Work#labour-law#government-policy
Labour reform negotiations stall as UGT rejects proposal
Photo: Diário de Notícias

The General Union of Workers (União Geral de Trabalhadores or UGT) has unanimously rejected the government's latest labour reform proposal, leading to accusations of a 'sham negotiation' from the Socialist Party (Partido Socialista or PS). Prime Minister Luís Montenegro stated that six key issues, including outsourcing and the 'bank of hours' (banco de horas), remain unresolved and require further concessions. A meeting of the Social Concertation (Concertação Social) is scheduled for May 7th to attempt to finalize the agreement.

Update: Government maintains May 7th deadline for labour reform

The Minister of Labour has confirmed that the government will not present new proposals despite the UGT's rejection, insisting that the current negotiation process must conclude by the May 7th deadline.

Context & Explainers

Luís Montenegro
  • Prime Minister, Portugal: 2024 - Present
  • Party: Social Democratic Party (PSD)

Luís Filipe Montenegro Cardoso de Morais Esteves (born February 16, 1973, in Porto) is a Portuguese lawyer and center‑right politician who has served as Prime Minister of Portugal since April 2, 2024. A long‑time member of the Social Democratic Party (PSD), he is the leading figure of the post‑Troika generation of Portuguese conservatives. ​ Montenegro was elected to the Assembly of the Republic in 2002 for the Aveiro district and remained an MP for 16 years, becoming PSD parliamentary leader from 2011 to 2017 during the bailout and austerity period under Prime Minister Pedro Passos Coelho. He was a prominent defender of strict austerity measures, arguing in 2014 that “the life of the people is no better, but the life of the country is a lot better,” a phrase that has followed his public image since. ​ After an unsuccessful leadership bid against Rui Rio in 2020, Montenegro won the PSD leadership in 2022. He then forged the centre‑right Democratic Alliance (PSD–CDS‑PP and allies), which won a plurality of seats in the 2024 legislative election. Refusing to partner with the far‑right Chega, which he has called “often xenophobic, racist, populist and excessively demagogic,” he formed a minority government as head of the XXIV Constitutional Government on April 2, 2024. ​ His first government fell in March 2025 after a no‑confidence vote linked to a conflict‑of‑interest affair, but fresh elections saw the Democratic Alliance increase its seat share, allowing Montenegro to return as prime minister leading the XXV Constitutional Government. His importance to Portugal lies in attempting to re‑center the traditional centre‑right after the crisis years, defending liberal‑conservative economics and EU alignment while drawing a sharp line against formal cooperation with the radical right, thus shaping how Portuguese democracy manages its new multi‑party era.

UGT (União Geral de Trabalhadores)

The General Union of Workers (UGT – União Geral de Trabalhadores) is one of Portugal’s two main national trade union confederations. Founded in Lisbon on 28 October 1978, it was created as a social‑democratic alternative to the more communist‑aligned CGTP after the 1974 Revolution, grouping unions close to the Socialist Party and moderate centre‑right currents.

UGT represents around 400,000 workers and is affiliated to the European Trade Union Confederation and International Trade Union Confederation, giving Portuguese labour a voice at EU and global level. Its principles stress union independence from the state, employers, churches and parties, internal democracy and active worker participation.

Historically, UGT’s hallmark has been “propositive” social dialogue: it is usually more willing than CGTP to sign tripartite agreements on wages, labour law and social policy with governments and employers, shaping minimum wage increases, working‑time rules and social protection reforms. This makes UGT a key centrist actor in Portugal’s industrial relations, often mediating between left and right while defending collective bargaining and incremental improvements to labour rights.

Social Concertation (Concertação Social) is Portugal's tripartite dialogue between the government, trade unions and employer associations to negotiate labour, social and economic policies. Its agreements often shape government proposals but are not binding, so if talks fail the government can still submit the labour-law revision to Parliament and will need to secure votes there, potentially relying on support from opposition parties such as Chega.

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