In Portugal, the notice period requirements during employment termination are determined by the party initiating the termination and the employee's seniority level. These requirements are outlined in the Código do Trabalho (Labor Code), Act No. 7/2009.

Notice Periods for Employers (Objective Dismissal)

Portuguese employers are required to provide written notice to employees before terminating their contracts, except in cases of disciplinary dismissal or during the probationary period. The length of the notice period is dependent on the employee's seniority, as defined in Article 120 of the Labor Code:

• For employees with less than or equal to one year of service, a 15 days' notice is required.
• For those with greater than or equal to one year and less than five years of service, a 30 days' notice is required.
• For employees with greater than or equal to five years and less than ten years of service, a 60 days' notice is required.
• For those with greater than or equal to ten years of service, a 75 days' notice is required.

It's important to note that employers have the option to pay the employee their salary for the notice period instead of requiring them to work during that time.

Notice Periods for Employees (Resignation)

Employees intending to resign must also provide written notice to their employers. The length of the required notice period is dependent on their length of service as stipulated in Article 121 of the Labor Code:

• For employees with less than six months of service, a 15 days' notice is required.
• For those with more than six months of service, a 30 days' notice is required.

In Portugal, employees are entitled to severance pay, also known as compensação, when their employment is terminated under certain circumstances. These entitlements are governed by the Labor Code, Act No. 7/2009.

Circumstances for Entitlement

Severance pay is granted in the following situations:

• Collective Dismissal: This occurs when employees are let go due to the restructuring or closure of the company, as per Article 366 of the Portuguese Labor Code.
• Extinction of the Job Position: This happens when an employee's job becomes redundant due to technological, market, or structural changes within the company, according to Article 367 of the Portuguese Labor Code.
• Unilateral Termination by the Employer: This refers to justified termination initiated by the employer when there is due cause, as outlined in Article 389 of the Portuguese Labor Code.

Severance Pay Calculation

The severance pay is calculated based on the employee's base salary, seniority pay, and length of service:

• Base Salary: This is the employee's regular monthly salary.
• Seniority Pay: This is a premium calculated based on the number of years of service.

The current calculation for severance pay in Portugal, according to Article 388 of the Labor Code, is 12 days of base salary (plus seniority pay) for each full year of service.

Limitations on Severance Pay

There are certain limitations on severance pay:

• Maximum Payout: The total severance pay cannot exceed 12 monthly salaries or 240 times the national minimum wage, whichever is higher, as per Article 388 of the Labor Code.

The termination process for employees in Portugal is governed by the Labor Code, Act No. 7/2009, and depends on the reason for the termination and whether it's initiated by the employer or employee.

Types of Termination

• Resignation: The employee voluntarily terminates their employment contract by providing written notice.
• Mutual Agreement: Both the employer and employee agree to terminate the employment contract on mutually defined terms.
• Employer-Initiated Termination: The termination may fall under several categories:
  • Disciplinary Dismissal: Dismissal with just cause due to serious misconduct on the employee's part (Article 351 of the Labor Code). Requires a formal disciplinary process.
  • Objective Dismissal: Dismissal due to the unsuitability of the employee or reasons related to the company, such as job redundancy or restructuring (Articles 366-369 of the Labor Code).

Employer-Initiated Termination Process

1. Notification: The employer must provide a written notice of termination to the employee, stating the reason(s) for termination and the effective termination date (Article 389 of the Labor Code).
2. Employee Representation: The employer should inform the employee's representative (if there's one) or the works council about the intended termination.
3. Prior Hearing: In cases of disciplinary and objective dismissal, the employer must grant the employee a hearing to present their defense before finalizing the dismissal (Articles 353 and 389 of the Labor Code).
4. Final Decision: The employer communicates the final termination decision in writing (Article 357 of the Labor Code).

Important Considerations

• Employers must follow formal procedures and adhere to legal requirements for termination to avoid legal challenges.
• Employees have the right to challenge an unfair dismissal through labor courts (Article 398 of the Labor Code).