Labor courts in Portugal are specialized in handling labor disputes. They are structured into three levels: the first instance, known as Tribunais de Trabalho, the second instance, referred to as Tribunais da Relação, and the Supreme Court of Justice, or Supremo Tribunal de Justiça. These courts have jurisdiction over individual employment contract disputes, collective labor disputes, labor accidents, occupational diseases, and social security disputes. The process in these courts involves initiation, conciliation, trial, and judgment.

Labor Courts: Typical Cases

Typical cases handled by labor courts include unfair dismissal, wage and hour disputes, discrimination and harassment claims, and workplace safety violations. The legal sources for these cases are the Labor Code, Civil Procedure Code, and the Law on the Organization of the Judicial Courts.

Arbitration Panels

Arbitration panels, on the other hand, can be either ad hoc or institutional. Ad hoc arbitration involves panels constituted on a case-by-case basis, with arbitrators chosen by the parties. Institutional arbitration involves panels administered by specialized arbitration centers. Arbitration is only permitted in areas where the parties have the freedom to settle, typically commercial and contractual matters within labor law. Disputes involving public policy or indisposable rights are generally not arbitrable.

Arbitration Panels: Process

The process in arbitration panels involves having a valid arbitration agreement, appointment of arbitrators, a hearing, and an award. The panel issues an award, which is generally binding and enforceable.

Arbitration Panels: Typical Cases

Typical cases handled by arbitration panels include disciplinary measures, compensation disputes, and interpretation of collective bargaining agreements.

Compliance audits and inspections are systematic evaluations and focused examinations respectively, aimed at determining whether an organization adheres to relevant laws, regulations, standards, or internal policies. These are crucial for risk mitigation, improving operations, and enhancing stakeholder trust.

In Portugal, these audits and inspections are conducted by various government authorities, independent auditors, and even the organizations themselves in the form of self-audits. Some of the government authorities include Autoridade de Segurança Alimentar e Económica (ASAE) for food safety and economic activities, Autoridade para as Condições do Trabalho (ACT) for labor conditions and occupational safety, and Inspeção-Geral da Agricultura, do Mar, do Ambiente e do Ordenamento do Território (IGAMAOT) for environment, agriculture, fisheries, and land management.

The frequency of these audits and inspections varies depending on the specific industry, the size of the company, risk factors, and the mandates of the regulatory bodies. Some inspections happen regularly, while others may be triggered by complaints or specific incidents.

Non-compliance can lead to severe consequences including fines and penalties, suspension or revocation of licenses/permits, criminal charges, and reputational damage.

In Portugal, companies with 50 or more employees are legally required to establish secure internal channels for reporting violations according to Law No. 93/2021 of 20 December 2021. These channels must allow for written or oral reporting, ensure the confidentiality of the whistleblower and any individuals mentioned in the report, and protect against unauthorized access.

External Reporting Channels

Whistleblowers may report violations to designated external authorities, which vary depending on the nature of the violation. Some key external channels include The National Anti-Corruption Mechanism (MENAC), Sectoral Regulatory Bodies, Criminal Police Bodies, Public Law Institutions, and Local Government Bodies and Public Associations.

Whistleblower Protections in Portugal

Portugal's Law No. 93/2021 of 20 December 2021 outlines robust protections for whistleblowers who act in good faith and have reasonable grounds for their report. These protections include protection against retaliation, confidentiality and anonymity, reversals of retaliation, and support and resources.

Practical Considerations for Whistleblowers

Whistleblowers should consider collecting as much supporting documentation as possible, be aware of time sensitivity as some external reporting mechanisms have deadlines, weigh the nature of the violation, any risks, and the desired outcome when deciding between internal and external channels, and consider consulting organizations that provide support and guidance to whistleblowers.

Portugal maintains a strong commitment to international labor standards. As a signatory to the core conventions set forth by the International Labour Organization (ILO), Portugal has pledged to uphold fair labor standards on a global scale. These conventions include the Forced Labour Convention, Freedom of Association and Protection of the Right to Organise Convention, Right to Organise and Collective Bargaining Convention, Equal Remuneration Convention, Abolition of Forced Labour Convention, Discrimination (Employment and Occupation) Convention, Minimum Age Convention, and the Worst Forms of Child Labour Convention.

Key Conventions and Treaties

• Forced Labour Convention, 1930 (No. 29) and its 2014 Protocol – Prohibits all forms of forced or compulsory labor.
• Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87) – Protects the right to form and join trade unions.
• Right to Organise and Collective Bargaining Convention, 1949 (No. 98) – Protects the right of workers and employers to negotiate terms and conditions of work.
• Equal Remuneration Convention, 1951 (No. 100) – Ensures equal pay for men and women for work of equal value.
• Abolition of Forced Labour Convention, 1957 (No. 105)- Eliminates the use of forced labor for any purpose.
• Discrimination (Employment and Occupation) Convention, 1958 (No. 111) – Prohibits discrimination on the grounds of race, color, sex, religion, political opinion, national extraction, or social origin.
• Minimum Age Convention, 1973 (No. 138) – Aims to abolish child labor.
• Worst Forms of Child Labour Convention, 1999 (No. 182) – Calls for immediate action to tackle the worst forms of child labor.

Impact on Domestic Law

Portugal's labor laws are significantly influenced by European Union (EU) directives and the principles enshrined in the ILO conventions. The Portuguese Constitution guarantees fundamental labor rights such as freedom of association, the right to strike, and protection against unfair dismissal. The Labour Code serves as the primary legal framework that meticulously covers individual employment contracts, collective rights, working time, minimum wage, and occupational safety and health.

Examples of Compliance and Areas for Improvement

Portugal adheres to the EU Working Time Directive, providing for a maximum working week of 48 hours, rest periods, and regulations on overtime compensation. The country also sets a national minimum wage and prohibits discrimination in employment on various grounds, aligning with international standards.

However, challenges remain in addressing informal work arrangements, where workers may lack full protection under labor laws. Despite progress, a gender pay gap persists, highlighting the need for continued efforts to ensure equal remuneration. Concerns also exist regarding a rise in temporary and less secure forms of employment.