Understand the main points of the labor reform that provokes a general strike in Portugal

General strike against labor reform paralyzes public services in Portugal
A general strike in Portugal interrupted transport services, closed schools and affected hospitals this Wednesday (3), in protest against a broad labor reform proposed by the center-right government of Prime Minister Luís Montenegro.
The strike, called by the country's main union federation, the CGTP, is the second general strike in six months and occurs as the government tries to approve the "Work XXI" package, a reform that foresees more than 50 changes to the Portuguese Labor Code.
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According to the government, the changes seek to modernize labor legislation, increase productivity and improve the competitiveness of the Portuguese economy.
The unions claim that the proposal reduces workers' rights, increases the precariousness of employment and facilitates layoffs.
Check out what is at stake and the main changes foreseen in Portugal's labor law.
Longer temporary contracts
One of the main changes proposed is the extension of the maximum duration of temporary employment contracts.
Fixed-term contract: has an end date defined from the beginning. Currently, it can last a maximum of two years. Under the reform, the limit would increase to three years.
Indefinite-term contracts: these are employment contracts with an indefinite term, such as replacing an employee on leave or in projects with an indefinite duration. Today, this contract can last up to four years. The proposal extends the period to five years.
For unions, the measure increases the insecurity of workers, especially young people, by extending periods of employment without a permanent contract.
Flexibilization of outsourcing
The reform also eliminates current restrictions on the use of outsourcing after collective layoffs or the elimination of jobs.
Today, Portuguese companies that carry out layoffs of this type are prevented from hiring outsourced services for the same functions for a specified period. The proposal revokes this limitation.
According to the government, the change increases companies' flexibility. The trade union centrals claim that the measure facilitates the replacement of their own workers with cheaper outsourced labor.
Return of the individual time bank
Another point that generated a strong reaction from the unions is the reintroduction of the individual time bank, which was abolished in 2019.
Under the proposal, the worker will be able to work up to two overtime hours per day, increasing the weekly working hours to up to 50 hours. The annual limit will be 150 additional hours, with compensation through subsequent time off.
The reform also changes the rules of the collective time bank, a mechanism that allows companies to compensate overtime with future time off.
Currently, the adoption of this regime for a group of workers depends on approval in a referendum held among the affected employees.
With the new proposal, this consultation would no longer be necessary: if at least 75% of workers agree with the agreement, the company will be able to apply the time bank to the entire group, including those who voted against or did not participate in the decision.
Unions argue that the change reduces workers' individual decision-making power over their own working hours.
Rules for dismissals
The proposal also changes the rules for cases in which the Portuguese courts consider a dismissal to be illegal. Today, in Portugal, when a court concludes that a worker was dismissed irregularly, the general rule is that he has the right to return to his job.
Only micro-companies can replace this reinstatement with the payment of compensation.
With the reform, companies of any size will be able to choose to compensate the worker instead of readmitting him, even after a court decision in favor of the employee.
According to the government, the change gives companies more flexibility and reduces conflicts in work relationships.

As compensation, it increases the minimum value of compensation paid in these cases.
The package also simplifies disciplinary and dismissal procedures for small and medium-sized companies, reducing bureaucratic requirements and formal steps in employee dismissal processes. Critics of the reform claim that the changes weaken protection against unjustified dismissals, while the government argues that they make the job market more agile and competitive.
Remote work and new forms of work
The Portuguese government's project also makes the rules on remote work (or teleworking) more flexible, allowing greater adoption of hybrid models and reducing some administrative requirements.
Among the main proposals are:
The reform also makes the rules of teleworking more flexible, which is now officially called "remote work".
In cases of a hybrid regime, the contract must specify the proportion between remote and in-person working days.
The worker may also temporarily change the location from which he carries out his activities only by informing the employer. The change will come into effect automatically if the company does not present a written objection, replacing the current rule, which requires agreement between the two parties.
In addition, the proposal eliminates the requirement for specific medical examinations before adopting remote work. According to the government, the objective is to adapt the legislation to new forms of work that emerged after the digitalization of the economy and the expansion of home office.
The proposal also provides for reinforcement of the so-called "right to disconnection", a principle that seeks to protect workers from professional contacts outside working hours.
Artificial intelligence in the workplace
One of the novelties of the Portuguese labor reform is the inclusion of specific rules for the use of artificial intelligence (AI) in the workplace.
The government states that the measure seeks to adapt legislation to the challenges of the so-called Economy 4.0 and expand the adoption of new technologies by companies.
According to the Executive, Portugal still has a level of use of artificial intelligence lower than the European Union average, which would justify the modernization of labor rules.
The main change envisaged is the requirement for mandatory human supervision in decisions made with the help of algorithms or AI systems.
According to the proposal, companies will not be able to rely exclusively on automated tools to define issues related to personnel management.
The requirement applies especially to processes considered sensitive, such as recruitment and selection of candidates, performance evaluations and dismissals. In these cases, there must always be a human responsible person monitoring and validating the decisions.
The reform also introduces algorithmic regulation mechanisms, with the aim of increasing transparency regarding the use of automated systems in work management and preventing important decisions from being taken without supervision or clear criteria.
According to the Portuguese government, the changes seek to reconcile the adoption of new technologies with the protection of workers' rights in an increasingly digitalized labor market.
Parental leave and benefits
Among the measures are the payment of 100% of shared parental leave in the first six months, the expansion of mandatory parental leave from 14 to 30 days and the creation of specific leaves in cases of termination of pregnancy.
Broader parental leave: the reform provides that parents who share leave to care for the baby will receive 100% of their salary during the first six months of leave.

Furthermore, the mandatory leave for parents after the birth of their child will increase from 14 to 30 days.
Leave in case of termination of pregnancy: the proposal creates a specific period of absence from work for women who suffer termination of pregnancy, guaranteeing labor protection during that time.
Installed payment of benefits: in Portugal, workers normally receive a holiday bonus and a Christmas bonus, equivalent to extra payments throughout the year. Under the reform, the employee will be able to choose to receive these amounts in monthly installments, along with their salary, instead of receiving larger amounts on specific dates.
Two extra days linked to vacation: workers will be able to request up to two additional days of rest per year, associated with the vacation period. These days can be used to extend or bring forward vacations.
What remains for the reform to come into effect
Metro entrance closed in Lisbon, Portugal
REUTERS/Pedro Nunes
After nine months of negotiations without consensus with unions and employers, the government approved the reform package in May and sent it to the Assembly of the Republic. The project still needs to be analyzed and voted on by deputies to come into force.
Montenegro hopes to obtain approval from Parliament in the coming weeks, counting on the support of the right-wing Chega party.
The general strike in Portugal is the second national mobilization against labor reform in less than six months. The first took place in December 2025 and marked the first general strike in Portugal since the protests against austerity measures recorded in 2013.
However, Prime Minister Luís Montenegro defends the reform and states that the changes are necessary to increase the productivity and competitiveness of the Portuguese economy.
According to him, the country has one of the strictest labor laws among members of the Organization for Economic Co-operation and Development (OECD), which limits the ability of companies to adapt to market changes.
The general strike, which began this Wednesday (3), had impacts on several sectors in Portugal.
There were flight cancellations and delays, interruptions in rail transport and urban public transport, school closures and reduced service in hospitals and public offices.
Airlines operating routes between Brazil and Portugal, such as TAP, Azul and Latam, also registered changes in their operations due to the strike. (see more about the impacts)
*With information from RFI and international agencies

Source: G1

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