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In times of crisis and economic slowdown, the tendency of the Portuguese business sector, which is essentially made up of small and medium-sized enterprises (SMEs), may be to reduce labour costs, namely through collective redundancies. However, as an alternative, the Portuguese Labour Code provides for a mechanism to reduce labour costs that avoids laying off employees, commonly known as lay-off. In an opinion article for HR Magazine, Maria Luís Guedes de Carvalho, Senior Associate at the CCA Law Firm’s Labour department, explains the formal procedure for applying this scheme.
“The lay-off must have a predefined duration, which cannot exceed six months (extendable), when it results from market, structural or technological reasons, and this period is extended to one year, when its application results from catastrophes or other occurrences that seriously affect the company's normal course of business,” says the Senior Associate.
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- RH Magazine