Finance: Labour law news in Portugal

The government is meeting with trade unions and employers' confederations on Wednesday for Social Dialogue (Concertação Social) negotiations in Lisbon. Talks focus on potential upward revisions to the national minimum wage following the submission of the 2027 state budget proposal. Discussions will also address proposed changes to the Labour Compensation Fund (Fundo de Compensação do Trabalho), which backs employee severance pay mechanisms.

Nearly 76% of working-age immigrants born outside Europe who live in Portugal are employed, surpassing the 73.4% rate among native-born residents according to data reported by Público. The employment rate for non-European immigrant women reached 71.3%, matching native Portuguese women and placing Portugal ahead of most European Union member states. However, researchers noted that high employment levels do not guarantee that workers have secured jobs suited to their skills and qualifications.

Social Democrat Rosa Sousa has been elected president of the General Union of Workers (União Geral de Trabalhadores or UGT), succeeding Lucinda Dâmaso, who had led the organization since 2013. Sousa secured 413 votes at the confederation's 15th congress in Figueira da Foz, where delegates also re-elected Mário Mourão as secretary-general. The congress noted that UGT currently represents about 430,000 affiliated workers across 50 unions, down by 5,000 members since 2022.

General Workers' Union (União Geral de Trabalhadores or UGT) Secretary-General Mário Mourão challenged Prime Minister Luís Montenegro to renegotiate national wage targets and raise the national minimum wage (salário mínimo nacional) to €1,000. Speaking at the union's congress, Mourão cautioned that any upcoming changes to labour law must reinforce collective bargaining rules. The government maintained that any wage revisions beyond existing targets require agreement among social partners in tripartite negotiations.

Update: Government Rejects Minimum Wage Increase Beyond €970

Minister of Labour Maria do Rosário Palma Ramalho rejected raising the minimum wage above €970 for the time being. Speaking at the UGT congress, she insisted that any modification to the proposed State Budget figure can only occur through a renegotiated tripartite agreement with social partners.

The government met with the Trade Union Federation of Public Administration (Federação dos Sindicatos da Administração Pública or FESAP) to open negotiations on civil service pay for 2027. FESAP secretary-general José Abraão asked the government to exceed the multi-year agreement, which currently schedules salary increases between 2.3% and 6.5%. The government did not commit to higher pay rises, postponing decisions until after discussions on the State Budget (Orçamento do Estado).

The General Workers' Union (União Geral de Trabalhadores or UGT) has officially approved its policy goals for 2026-2027, which include a demand for the national minimum wage to surpass 1,000 euros by January 2027. This target aims to exceed the 970-euro threshold previously established in the current tripartite agreement between the government, employers, and unions.

Data from the Directorate-General for Employment and Labour Relations (Direção-Geral do Emprego e das Relações de Trabalho or DGERT) shows that collective redundancies rose 13.4% by August, reaching 407 processes. Despite the increase in company-led dismissals, the total number of workers affected fell by 9.2% compared to the same period last year. The Lisbon and Tagus Valley region currently reports the highest number of these redundancy cases.

The General Union of Workers (União Geral de Trabalhadores or UGT) is calling for a minimum wage of 1,000 euros by 2027, while the General Confederation of Portuguese Workers (Confederação Geral dos Trabalhadores Portugueses or CGTP) demands a significant 'wage shock'. Employers remain opposed to reopening the existing tripartite agreement, which currently sets the 2027 target at 970 euros. The Minister of Labour stated that while the government is open to dialogue, no immediate changes to the agreement are planned.

The Federation of Public Administration and Public Purpose Entities Trade Unions (Fesap) and the Portuguese Communist Party (PCP) have announced new proposals for the 2027 State Budget. Fesap is demanding a base salary of 1,050 euros for civil servants, while the PCP proposes a national minimum wage of 1,100 euros and an interim pension increase of 50 euros.

The Portuguese retail group Jerónimo Martins, owner of the Biedronka supermarket chain in Poland, has been fined 121 million euros by the Polish competition regulator, UOKiK. The regulator alleges the company engaged in anti-competitive practices by colluding with transport firms to suppress driver wages. The company denies the allegations and plans to contest the decision in court.

The General Confederation of Portuguese Workers (Confederação Geral dos Trabalhadores Portugueses or CGTP) has announced a month of mobilization and a major national demonstration for October 17. The union is pushing for a national minimum wage increase to 1,100 euros by 2027 and a general 15% salary hike, arguing that current government targets are insufficient for the cost of living.

Companies reported 375 collective redundancies through July, a 13% increase compared to the same period last year. Data from the Directorate-General for Employment and Labour Relations (Direção-Geral do Emprego e das Relações de Trabalho or DGERT) indicates this is the highest level of workforce reductions since the pandemic year of 2020.

Volkswagen Group CEO Oliver Blume has announced that the company is considering deeper restructuring measures, which could include closing four factories and cutting up to 100,000 jobs worldwide. Blume cited significant industry pressures, including the transition to electric mobility and geopolitical risks. While there is currently no indication that the Autoeuropa plant in Palmela will be affected, the announcement has triggered protests.

Super Bock Bebidas has reached an agreement with labor unions to implement a phased reduction of the work week to 35 hours. The deal also includes a 2.3% salary increase for all employees, with a guaranteed minimum raise of 75 euros.

Portuguese companies have until December 31 to claim funds from the Labour Compensation Fund (Fundo de Compensação do Trabalho or FCT). As of June, 476.6 million euros remained unmobilized, representing 73% of the total funds available for training and severance support.

Data from the National Statistics Institute (Instituto Nacional de Estatística or INE) shows that in 2024, only six municipalities in Portugal saw median net income per taxpayer exceed 1,000 euros per month. While the national median rose by 7.6 percent, significant economic disparities persist, with the highest incomes concentrated in the Lisbon Metropolitan Area.

The General Confederation of Portuguese Workers (Confederação Geral dos Trabalhadores Portugueses or CGTP) is demanding an immediate increase of the national minimum wage to 1,050 euros. The union rejected postponing the discussion until 2027, citing the current economic reality faced by workers and the government's recent openness to reviewing wage policies.

The Confederation of Portuguese Business (Confederação Empresarial de Portugal or CIP) has ruled out a 2027 minimum wage increase exceeding the 50 euros already agreed upon. The business group cites current productivity trends as the primary reason for resisting further raises despite calls from the government for higher wages.

The number of unemployed people registered at employment centres fell by 9.9% year-on-year in June, reaching 264,517. This marks the fifth consecutive month of decline, according to data from the Institute for Employment and Vocational Training (Instituto do Emprego e Formação Profissional or IEFP). Additionally, the number of couples with both members unemployed dropped by 11.4% compared to the same period last year.

The International Monetary Fund (Fundo Monetário Internacional or FMI) has recommended that Portugal increase labour market flexibility to boost productivity and encourage companies to offer more permanent contracts. The FMI suggests that making dismissals easier would incentivize businesses to move away from short-term hiring. This recommendation follows the recent parliamentary rejection of the government's own labour reform proposals.

The leader of the Chega party, André Ventura, claims that the Minister of Labour, Maria do Rosário Palma Ramalho, had initially agreed to lower the retirement age for shift workers. Ventura alleges that Prime Minister Luís Montenegro subsequently undermined the minister, leading to the rejection of the government's labour proposal. Business leaders have since called for the current reform package to be scrapped entirely in favor of a new, collaborative approach.

Recent data shows Portugal has the fourth-lowest productivity in the European Union, with the indicator declining in 2025. While Portuguese workers average 37.4 hours per week compared to the EU average of 35.9, the value created per hour remains significantly lower. Experts note that improving this requires greater investment in technology, capital, and business scale.

Prime Minister Luís Montenegro has reaffirmed his commitment to passing the government's proposed labour reform package, despite ongoing disagreements with the Chega party. Parliament is scheduled to discuss the legislation this Thursday as part of a broader political agenda.

Telecommunications company Meo has been granted the status of a company in restructuring by the government, a move that facilitates the termination of employment contracts. The company plans to reach agreements for the departure of 1,200 workers by the end of the year, allowing for mutual agreements that include unemployment benefits beyond standard legal quotas.

Prime Minister Luís Montenegro told the Social Democratic Youth (Juventude Social Democrata or JSD) congress in Viseu that there is no funding to increase minimum pensions or lower the retirement age. Montenegro criticized such proposals as irresponsible, arguing they would threaten the sustainability of the Social Security system. During the same event, João Pedro Luís was elected as the new president of the JSD.

Update: Chega leader slams government strategy on labour reform

André Ventura has criticized Prime Minister Luís Montenegro for publicly rejecting Chega's demands for labour law reform while remaining open to negotiations. Ventura described this approach as a 'ludicrous strategy' and warned that if the government refuses to address key issues like the retirement age, there will be little room for productive discussion.

Banking unions, including Mais, SBN, and SBC, have expressed outrage at the banking sector's insistence on a 2% salary increase for this year. The unions, affiliated with the General Workers' Union (União Geral de Trabalhadores or UGT), labeled the offer as insensitive given the record profits reported by the country's five largest banks. They have warned of potential industrial action if the proposal is not improved.

Former Prime Minister Pedro Passos Coelho has dismissed a proposal from the Chega party to lower the retirement age, calling the plan both absurd and unrealistic. During a session at the Nova School of Business and Economics, he also addressed broader concerns regarding the sustainability of social security and the current government's performance.

Data from the National Statistics Institute (Instituto Nacional de Estatística or INE) shows that nearly 270,000 taxpayers in Portugal held two or more jobs in 2025, the highest figure on record. Additionally, statistics indicate that Portugal has the fifth-highest average weekly working hours in the European Union, with 19.5% of the workforce regularly working on weekends.

Prime Minister Luís Montenegro has reaffirmed his commitment to labour reform, stating that the country must move forward with the process. While the Socialist Party (Partido Socialista or PS) has urged the government to withdraw the bill, the Chega party has expressed willingness to negotiate, provided the government agrees to lower the retirement age.

The European Investment Bank (EIB) Group increased its lending to Portugal by 43% in 2025, reaching three billion euros. EIB President Nadia Calviño and Finance Minister (Ministro das Finanças) Joaquim Miranda Sarmento announced that 1.5 billion euros is specifically earmarked for social and affordable housing. Other major investments include nearly one billion euros for the high-speed rail project between Porto and Lisbon. Those seeking affordable housing should note that these funds aim to increase supply across the country quickly.

The government raised the minimum wage to €920 for 2026, up €50 from €870, and announced support measures for businesses and workers including simplified layoff rules and expanded income support. The change affects paychecks from next year and is part of a broader income agreement the government cites to boost household income. Low‑paid workers will see higher take‑home pay, while employers should plan for higher payroll costs and check whether sector agreements or contracts change. Workers and small employers should watch official calendars for the implementation date and payroll guidance.

A new circular from the Tax and Customs Authority clarifies that temporary-contract workers who are on the payroll at the end of the reference period count when companies calculate eligibility for the State Budget 2025 productivity bonus — even though those temporary workers themselves cannot receive the bonus. Employers should review end-of-period headcounts and payroll reporting to determine entitlement and consult accountants or tax advisers on the circular's details.

The Labour minister (ministra do Trabalho) said the government wants to move from a model focused only on tax incentives toward one that ties incentives to real productivity gains, RTP reports. The statement frames upcoming tax policy discussions rather than announcing concrete changes; employers and workers should watch for detailed proposals that could affect corporate tax treatments or employment incentives.

Expresso and Observador report a CGTP study finding that nearly 60% of employed women had base salaries of €1,000 or less in November 2025, a share higher than for men. The coverage frames the result as evidence of persistent gender pay gaps and low pay concentration among women, which has implications for social policy and wages debates. Policymakers and employers should note the figure as they consider pay policy or targeted support; residents tracking household finances may find this relevant for local labour-market expectations.

Update: Media report: CGTP finds nearly 60% of women earned ≤ €1,000

Both Expresso and Observador published the CGTP study results showing that in November 2025 nearly six in ten employed women had base pay at or below €1,000, a proportion higher than for men. The stories frame the finding as relevant to ongoing discussions on pay policy and targeted support.