Labour reform: decision time, while experts sound alarm

Legal experts warn that some of the government’s proposals in the Labour Reform bill that the prime minister is so focused on getting through parliament are “draconian”.

Those that aren’t, still pose risks to workers’ rights and job security.

In fact, far from Luis Montenegro’s contention that a lot that has been said in the press against the reform is ‘incorrect’, today’s article, ahead of debate in parliament this afternoon, suggests there is every reason for the upset that has come this far (namely, two general strikes, multiple protests, and antipathy from almost all opposition parties).

As Executive Digest explains, “one of the most controversial measures would allow companies to hire workers on fixed-term contracts simply because they have never previously held a permanent contract.

“Milena Rouxinol, a labour law specialist at the Catholic University of Porto, said the proposal could trap workers in a cycle of precarious employment.

“It is draconian to allow someone to be hired on a temporary contract simply because they have never had a permanent one,” she said, arguing that the measure turns temporary contracts into a normal form of employment rather than an exception for temporary business needs.

Others see potential benefits. Lawyer Pedro Quitéria Faria said the measure could help young people, long-term unemployed workers and those with unstable employment histories gain access to the labour market, although he warned it should not be used to perpetuate insecurity.

Another flashpoint concerns workers who win unfair dismissal cases in court.

Under current law, employees can choose whether to return to their job or accept compensation. The government wants to expand employers’ ability to oppose reinstatement if they can argue a worker’s return would be harmful to the organisation.

João Leal Amado, a professor at the University of Coimbra’s Faculty of Law, describes the proposal as one of the most significant changes in the package.

“We have never had a rule that effectively deprives a worker, after an illegal dismissal, of the right to be reinstated if that is what they want,” he said.

He argues the change weakens constitutional protections linked to job security and protection against unjust dismissal.

The reform would also remove restrictions introduced under the Decent Work Agenda, that prevent companies from outsourcing jobs for 12 months after collective redundancies.

Critics say this could reopen the door to companies replacing dismissed workers with subcontractors. Supporters counter that it restores management flexibility that existed before the previous reforms.

The package also revives individual ‘working time banks’, allowing employees and employers to agree temporary increases in working hours of up to 50 hours per week, and a maximum of 150 additional hours annually.

Opponents argue workers may feel pressured into accepting such arrangements because of unequal bargaining power in the workplace. Supporters say the system can help businesses manage temporary peaks in demand if properly regulated.

As parliament begins debating the reforms this afternoon, the government has yet to secure full political backing.

Support from CHEGA could prove decisive, but party leader André Ventura recently said disagreements remain over pensions, shift work and holiday entitlement.

Despite differing views on the proposals, many experts share one criticism: the reform focuses heavily on traditional labour issues while paying limited attention to emerging challenges such as artificial intelligence, digital platforms and new forms of work that are reshaping the modern economy.

Yesterday, it appeared almost in desperation, the prime minister confirmed that his government is “willing to negotiate” the law, if it passes to the ‘speciality phase’ (meaning specific, point by point, discussions in parliamentary committees). But for that to happen, the reform in general terms has to be approved in parliament this afternoon – and for many MPs, approval would go against everything they, and their party, stands for.

Source: Executive Digest