Redundancy pay to be slashed to 12 days per year of service

By TPN/Lusa, in Business · 10-01-2013 09:40:00 · 1 Comments

Portugal’s government has submitted a bill to parliament that foresees the reduction of statutory compensation for sacked workers to 12 days’ salary per year of service, from one month at present. The new rules are expected to take effect during 2013.

The bill, which was approved by the cabinet on 27 December, foresees a further change to the already much-amended Labour Code that the government said is to meet the terms of Portugal’s euro-zone bailout accord.
The legislation aims “to conclude the process of revision of labour legislation foreseen in the Memorandum of Understanding” agreed with international officials, it said in a statement, adding that the new amount corresponds to the European Union average.
“According to studies carried out, the average value is in the interval between eight and 12 days, with this bill adopting the higher [of the two],” the government said.

The document lays down procedures for its application to labour contracts signed before 1 November of 2011. For each year of service up to 31 October 2012, an employee being made redundant will continue to have a right to one month’s pay in compensation, while service between that date and the moment the new law takes effect requiring 20 days’ compensation per year.
In the case of contracts signed from 1 November 2011, statutory redundancy is to be 20 days per year of service up until the law takes effect.
For all contracts, all subsequent service is to be worth 12 days’ compensation in case of redundancy.
The government had already made clear its intention of slashing statutory redundancy pay in 2013. The right-of-centre coalition enjoys a parliamentary majority.
Meanwhile, the government has promised to work with employers and trade unions to set up a fund to pay for redundancies, to help companies that are struggling to make their businesses viable.


Its rife where the employer pays contract value only then when the employee is redundant the extra pay is very low,it has to change where all the wage is in the contract is the true amount, at the moment it advantages the employer who pays less deductions on the
factitious contract value,this mainly happens in bars/restaurant/private villas reception staff.

by Troy from UK on 11-01-2013 09:33:00
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