Portuguese Employment Law for Expats: Why Dismissal Is Hard & What You’re Owed (2026)

Portugal is the hardest country in this series to dismiss someone from — and the cheapest to hire them into. That combination defines everything about working and employing here. Salaries are low by Western European standards; job security, once the probation period passes, is genuinely strong; and an employer who dismisses without following the formal procedure faces reinstatement, not merely a payment. Around this sits a body of law shaped by collective agreements, a working-time regime with a 40-hour ceiling, and a 2023 reform package that strengthened protections for remote and platform workers. This guide covers the 2026 position: contract types and probation, the fourteen-payment structure, working time and leave, the three lawful dismissal routes, redundancy compensation, remote-work rights, and how disputes run.

What contracts exist, and how does probation work?

Indefinite contracts (contrato sem termo) are the default. Fixed-term contracts survive only for objectively justified reasons (replacing an absent worker, exceptional activity increases, seasonal work, launching a new activity) — and the 2023 Agenda do Trabalho Digno tightened them further: shorter maximum durations, restrictions on renewals, and a prohibition on using fixed terms for permanent needs. Misuse converts the contract to indefinite.

Probation (período experimental) is the critical window: 90 days for most employees; 180 days for roles of high technical complexity, responsibility, or special trust; 240 days for senior managers and directors. During it, either side may terminate freely — though after 60 days the employer owes notice, and the 2023 reform requires justification where the employee had previously held the same role with the same employer. After probation, the protections in this chapter attach in full.

The practical consequence for expats: the probation period is when Portuguese employment risk lives. Understand its length in your contract (a senior hire’s 240 days is eight months of at-will employment) and understand that the day it ends, your position changes fundamentally — which is also why employers watch it closely.

What is the fourteen-payment structure — and the meal allowance?

Portuguese salaries are paid in 14 instalments: twelve monthly salaries plus a holiday subsidy (subídio de férias) and a Christmas subsidy (subídio de Natal), each equal to a month’s base pay. Some employers prorate them across twelve months (duodecimos); most pay them in June/July and December. An annual gross of €42,000 in 14 payments means €3,000 a month — not €3,500.

The meal allowance (subsídio de alimentação) is near-universal and partly tax-exempt: a daily amount (exempt up to a statutory limit, higher when paid on a meal card than in cash) that adds meaningfully to net pay and is one of the reasons Portuguese take-home is better than the gross figure suggests. Ask whether it is included and whether it is paid on a card — the difference is real money, as our Portugal tax guide explains.

Collective agreements (contratos coletivos de trabalho) layer above the Labour Code by sector, setting minimum pay scales by category, additional leave days, and allowances. As in Spain, they bind whether or not your employer negotiated them — and as in Spain, they are the first document an informed employee reads.

How can an employer lawfully dismiss someone?

Three routes, all procedural. Disciplinary dismissal with just cause (justa causa): for serious culpable conduct, requiring a formal written processo disciplinar — a nota de culpa setting out the accusations, a period for the employee to respond in writing, witness evidence, consultation with worker representatives where applicable, and a reasoned final decision. Procedural defects render the dismissal unlawful regardless of the underlying conduct — the same lesson our Ireland and Spain chapters teach, applied with even greater formality.

Extinction of the position (extinção do posto de trabalho): a genuine redundancy of the role, requiring objective and non-discriminatory criteria for selecting which position goes, proof that no alternative role exists, and formal notification. Collective dismissal (despedimento coletivo) applies above thresholds and requires consultation with worker representatives and the labour authority.

Unsuitability (inadaptação): documented inability to perform after training and adjustment — narrow and rarely used. And that is the complete list. There is no lawful ‘dismissal without cause’ in Portugal at any price. An employer who terminates outside these routes commits an unlawful dismissal, and the employee may elect reinstatement (with back pay from dismissal to judgment) or compensation of 15 to 45 days per year of service, at the court’s discretion — a genuinely dangerous exposure.

What are the working-time and leave entitlements?

Working time: 8 hours a day and 40 a week maximum, with overtime capped (150–200 hours a year depending on employer size) and paid at premium rates. Adaptability regimes allow averaging by agreement or collective convention. Portugal experimented with a four-day week pilot and continues to debate working-time reduction — watch the space, but do not plan around it.

Leave: 22 working days of paid holiday (with the holiday subsidy paid on top), 13 public holidays, and marriage, bereavement and family-care leave. Parental leave is generous and increasingly equal: an initial parental leave of 120 or 150 days shared between parents (paid at 100% or 80% of reference earnings respectively), with bonus days when shared, plus a mandatory paternity leave of 28 days, and extended leave options — among the better regimes in this series.

Sick leave is paid by social security (from the fourth day, at rates scaling with duration), not the employer — a structural difference from the UK and Ireland. And the 2023 reform strengthened remote work: employees with children under eight have a right to telework where the role permits, employers must pay the additional costs incurred by remote workers, and contacting employees during rest periods is restricted — Portugal’s version of the right to disconnect, and one of Europe’s earliest.

What did the Agenda do Trabalho Digno change?

The 2023 reform package (‘Decent Work Agenda’) was the most significant employment-law change in a decade: it restricted fixed-term contracts (shorter durations, fewer renewals, prohibition of probation periods where the worker previously held the role), strengthened remote-work rights (the telework right for parents of young children, employer payment of remote-work costs, disconnection protections), and increased penalties for undeclared work and misclassification.

It also created a presumption of employment for platform workers — drivers, couriers and similar — placing Portugal ahead of the EU Platform Work Directive, and it raised compensation for unlawful dismissal in defined cases. For employers importing gig-economy or contractor-heavy models, this was a direct hit.

The practical read for an expat professional: your remote-work costs may be reimbursable, your fixed-term contract may in fact be indefinite, and your employer’s obligations are heavier than they were when most English-language guides to working in Portugal were written.

How do disputes run — and what should expats document?

Claims go to the Tribunal do Trabalho (labour courts), with a mandatory conciliation attempt. Dismissal challenges must be filed within 60 days of the dismissal — short, though less brutal than Spain’s 20 working days. Portuguese courts are slow, which cuts both ways: employees wait, but employers face accruing back-pay exposure while they do.

The ACT (Autoridade para as Condições do Trabalho) is the labour inspectorate, enforcing working time, contract types, health and safety, and undeclared work — and it is active, with the 2023 reform sharpening its tools against false self-employment (falsos recibos verdes), a Portuguese speciality given the historic prevalence of freelance invoicing.

Documentation, as in every chapter: the contract and the applicable collective agreement, payslips (which itemise the fourteen payments and the meal allowance), the nota de culpa if a disciplinary process opens (respond to it, in writing, within the deadline — silence is fatal), and a dated log. In a system where procedure decides outcomes, the employee who engages with the procedure correctly is the employee who wins.

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