New legal changes were introduced to the financial support program to promote employment
Labour and Employment Law Alert
It was published today in the official gazette Ordinance no. 95/2019, of March 29, introducing amendments to the “Contrato-Emprego” Program (a public program to promote the employment in Portugal, with financial support to employers). These amendments aim to speed the decision from public authorities regarding the applications to the Program and introduce legal changes in the target beneficiaries of the Program.
The following amendments are to be highlighted:
It is now possible to present an application to the “Contrato-Emprego” Program as employer:
Individual persons, even if considered individual entrepreneurs;
Entities that have initiated an extrajudicial company recovery program (“Regime Extrajudicial de Recuperação de Empresas”).
It is now considered to the “Contrato-Emprego” Program the recruitment of unemployed persons that:
- Do not have any registry on Social Security as being working as dependent worker or as self-employed person on the 12 consecutive months prior to the disclosure of the job offer;
- Have rendered services in the Army for the following minimum periods:
8 years under a special contract regime (“regime de contrato especial”); or
3 years under a contract regime (“regime de contrato”); or
12 months of voluntary work.
- Have been working to the employer right before they were sent to unemployment, only if such work was rendered under an employment contract in the special regime for youngsters on school holidays.
Decision on the application
The deadline for the public authorities decide on the applications to the “Contrato-Emprego” Program is shortened to 20 working days . This deadline starts after the application is submitted.
The schedule of payments of the financial support granted in case of execution of an open-ended employment contract is anticipated as follows:
50% of the amount until 20 days after the employer accepts the decision to grant the financial support, provided that this occurs after all the employment contracts are in force;
25% of the amount on the 13th month of the employment contract’s execution;
25% of the amount on the 25th month of the employment contract’s execution.
It is now established the employers obligation to return the proportion of the financial support received if the employment contract expires due to a supervening, definitive and absolute impossibility for the employee to render his work or in case of employee’s retirement (for old age or due to incapacity).
The “Conversion Bonus” (bonus granted by public authorities to employers in case of conversion of term employment contracts into open-ended employment contracts) may be granted proportionally takin into account the work rendered on the 12 month period, in case of employment contract termination due to:
Employment contract’s expiration due to a supervening, definitive and absolute impossibility for the employee to render his work or in case of employee’s retirement (for old age or due to incapacity);
If the number of employee’s engaged to the employer is reduced, the employer may correct it on the following month.
Entry into force and transitory rules
These new rules are applicable to new applications to the “Contrato-Emprego” Program, presented after March 30, 2019.
The rules indicated on chapters 2 and 5 above are applicable to the projects already being executed.