Qual o prazo de pagamento após rescisão de contrato em Portugal?

Unfortunately, sooner or later all companies have to, or even have to, terminate contracts with some of their employees.

However, as the Labour Code states, when a labour contract termination is on the table, both companies and workers have rights they must accede to and duties they are obliged to fulfil.

Among others, we find the period for payment after termination and the payment of severance pay, obligations that the company must respect under pain of financial penalties and which, as we shall see, are elements that make up the core of this short guide.

However, before we can get into the nitty-gritty, let's take a look at what types of contract cancellation are permitted under Portuguese law.

Types of Contract Termination

According to the Labour Code, an employment contract can be terminated due to:

ExpiryThis occurs when the contract ends, i.e. when the employee retires or when the company cannot extend the contract or the employee cannot fulfil it;
Revocationcancellation of the contract by the employee who, in turn, must reimburse the employer if he or she has received compensation during the 7-day period he or she has to revoke the contract from the day it was signed;
Dismissal for reasons attributable to the employeeTermination of contract by the company when the employee shows culpable behaviour under the terms of the law;
Collective dismissalAs the name suggests, this involves terminating the employment of between 2 or more than 250 workers (depending on the size of the company) at the same time;
Termination of employmenttermination of contract when the company terminates the job;
Dismissal for unsuitabilitytermination of contract by the company on the grounds that the worker has proved to be unfit for the performance of the contractually established duties;
Employee resolutionThe employee decides, on his or her own initiative, to terminate his or her employment contract due, among other things, to non-payment;

Rights and duties after dismissal

In terms of duties, the company is obliged from the outset to inform the dismissed worker of the reasons for terminating the contract

In addition to this obligation, the company has the duty to pay untaken holidays and the corresponding holiday allowanceIn some cases, you can even pay your employee compensation or indemnity.

If the company dismisses an employee with just cause, it has 60 days after learning of the offence to notify the employee and open the respective disciplinary procedure.

In the case of a collective dismissal, the employer is obliged by law to give at least two weeks' written notice:

15 days if the employee has less than 1 year's seniority;
30 days if the employee has between 1 and 5 years' seniority;
60 days if the employee has between 5 and 10 years' seniority;
75 days if the employee has 10 years' seniority or more.

It should be emphasised that, in these cases, the employee has a period in which to consult the documentation and respond, after which the employer has the opportunity to carry out new procedures and finally proceed with the dismissal.

After the employee's response, the company has the right to carry out new procedures.

Finally, the company may or may not proceed with the dismissal, depending on the decision.

In the field of rights, the employee is obliged to fulfil the notice periods (in the event of termination of the contract on his/her own initiative) under penalty of having to compensate the employer for an amount equal to the basic salary and seniority corresponding to the missing period.

Compensation will also be due if the employee misses 10 consecutive days of work without warning or justification, which could be considered abandonment of work and entitle them not only to dismissal with just cause, but also to payment of financial compensation to the company for the damage caused.

Deadline for payment after termination of employment contract

When the employer terminates the employment contract, the employee is entitled to compensation which, in practice, involves the following variables:

Type of contract;
Date the contract was signed;
Length of service in the company;
Remuneration (salary and seniority);
Reason for termination of contract.

Once the amounts of compensation for termination of contract have been calculated, the company has certain deadlines to meet in order to settle the accounts: