Portuguese Labour Law in times of Covid19: some aspects

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 by Teresa Coelho Moreira, Professor of Labour Law, University of Minho

The world is facing an unprecedented pandemic crisis with global effects and that already reached almost all countries in the world. This situation has reflected in all areas but we are going to analyse some aspects related with Labour Law, and what Portugal is doing to face this situation.

Recently on 23 March, the ILO issued a paper entitled ILO Standards and COVID-19 (coronavirus) and emphasized that the Employment and Decent Work for Peace and Resilience Recommendation, 2017 (No. 205) on the Preamble and Paragraphs 7, b and 43, establishes that “crisis responses need to ensure respect for all human rights and the rule of law, including respect for fundamental principles and rights at work and for international labour standards”.

Today, we are living a truly tsunami in terms of economic crisis with this virus and no one knows when and if it is going to stop and how the world is going to be. However, one thing is sure. We are going to face a huge economic crisis with reflection in the world of work. Millions of people around the world are going to be unemployed. According with the ILO we can have “a rise in global unemployment of between 5.3 million (“low” scenario) and 24.7 million (“high” scenario) from a base level of 188 million in 2019. By comparison, the 2008-9 global financial crisis increased global unemployment by 22 million”[i]. With this scenario, falls in employment also mean large income losses for workers that translate into falls in consumption of goods and services, in turn affecting the prospects for businesses and economies.

To face this situation, Governments in different countries are trying to diminish these effects.

In Portugal, the first covid-19 cases appeared on 2nd of March and the number increased rapidly and several measures were taken by the Government in different areas, and the state of emergency was enacted by the President of the Republic.

All these measures had direct reflections in Labour Law and some Decrees-Law and resolutions were adopted. Of course we have to bear in mind that none is going to stop the huge economic crisis that we are going to face and that we are already facing, and none is going to stop dismissals and all, starting with the employees, are going to suffer.

However, there are measures that can be taken to diminish this gigantic economic crisis and we are going to analyse some of them.

One of the first measures that was taken to try to diminish the exponential growth of Covid 19 cases was the general adoption of the telework. In fact, in many countries, telework is being used as a mean to avoid the spread of the virus in many enterprises and public institutions.

According to Portuguese Labour Code, telework can be use at home of the employee or in other places, when the activity that the employee performs can be done by digital means. However, according with what is established in our Labour Code, there is the need of an agreement between the employer and the employee. Nevertheless, in case of this pandemic, there is the need of adopting different rules, temporary of course, but different. And in Portugal it was approved, first by Decree-Law No. 10-A/2020, of 13 March, in Article 29, with the exception established in number 2, that there wasn’t the need of an agreement and, after, by Decree No. 2-A/2020 of 20 March, in Article 6, the Government enforce that telework should be mandatory for all activities compatible with it. With this rule, more than an option, more than a right, it is really an obligation for both parties of an employment contract, public or private.

This option is totally understandable to face this pandemic situation but we have to remember that has some disadvantages and one of those is related with work-life balance. Many employees nowadays are facing huge changes in their daily lives, with their children being at home because all schools are close, and parents have to work and, at the same time, take care of their children. So, if we can understand this measure now, in the future we have to assure that telework doesn’t make disappear the frontiers between professional time and personal time.

However, one thing is certain. As someone already wrote, Covid 19 has demonstrate that the job you were told couldn’t be done remotely can be done remotely.

Also in the Decree-Law No. 10-A/2020, of 13 March, it was established a protection in case of prophylactic isolation. In these cases, declared by health authorities, 14 days of isolation, a special sickness leave will apply and an allowance corresponding to 100% of the reference remuneration – “RR”-  will be paid by the Portuguese social security. As a rule, RR=R/180, where, R corresponds to the sum of the remuneration of the six first months immediately preceding the second month prior to the prophylactic isolation) – special rules apply for shorter period of employment. No minimum contribution period will apply for the attribution of this allowance. This measure also applies to the self-employed. Also there is a sickness leave in situations of Covid-19 infection. The allowance to be paid by the social security will be based on the general rules applicable for sickness leaves but no minimum contribution period will apply for the attribution of this allowance and is also applicable for the self-employed.

Another measure that was taken very recently, by Decree-Law No. 10-G/2020, of 26 March, with the Rectification being made by the Declaration No. 10-G/2020, of 28 March, is about the application of the lay-off as a measure to try to avoid dismissals.

Lay off is applicable in cases of crisis in companies but, having in mind the special period that Portugal is facing, the Government decide to create a special kind of lay off in cases, a simplified one, with similarities with the normal one. Like in the normal one, the remuneration of the employee is going to be less (the employee is going to lose more or less 1/3 of the remuneration) and the others 70% of the remuneration, 2/3 is going to be supported by the social security, and the others 30% is supported by the employer.

However, in this case this measure is renewable on a monthly basis up to a maximum of three months.

Which companies can be eligible for this kind of lay off? Companies in business crisis: suspension of distribution chains or suspension of orders that lead to the shutting-down of the company’s activity or reduction of the company’s sales of, at least, 40%, during the 30 days prior to the application to the social security, with reference to two previous months of that period, or compared to the same period of the previous year or, for those who started the activity less than 12 months ago, the average of that period. In this situation it was established that there is a financial support granted by the social security to the company.

There are many possibilities in this case and several extraordinary supports but we would like to highlight the prohibition of dismissals established in Article 13. This article only establishes the prohibition in two cases of objective dismissal, but we think we have to consider all the three possibilities established in the Labour Code. The only case that isn’t applicable is the dismissal is related with a disciplinary fault made by the employee[ii]. And the prohibition is only in the period of the measures established in the Decree-Law and in the following 60 days, which means that after this period, the employer can dismiss.

The Law also arises different questions related with the protection of the employees, because it only establishes this kind of prohibition. It doesn’t suspend the period of fixed terms contract[iii], or the duration of the probation period which means that these employees can be send away. And there is another question. The Law doesn’t exclude the companies that before this Decree-Law already fired employees without respecting the legal framework. However, bearing in mind the principle in which Labour Law was founded, we think, like JOÃO LEAL AMADO[iv], that it should be applicable to these companies, Article 14 of this Decree-Law, related with the sanctions when the employers don’t respect the law, despite the procedures of them were made before this Law.

To summarize, the world of work isn’t going to be the same after this pandemic crisis.

However, we cannot forget Article 1 of the Declaration of Philadelphia that establishes that “work is not a commodity” and that there isn’t in reality work. What exists is human beings who perform work. And, even in times of uncertainty, in times of crisis, we must always assure decent work for all.

[i] In https://www.ilo.org/global/about-the-ilo/newsroom/news/WCMS_738742/lang–en/index.htm (last acceded in March 2020).

[ii] In the same sense see JOÃO LEAL AMADO, Da pandemia ao lay-off just in time: breve reflexão, in https://observatorio.almedina.net/index.php/2020/03/30/da-pandemia-ao-lay-off-just-in-time-breve-reflexao/ (last acceded in March 2020).

[iii] In Spain by Royal Decree- Law 9/2010, of 27 March, it was decided the suspension of the fixed term contracts in Article 5 – “Interrupción del cómputo de la duración máxima de los contratos temporales. La suspensión de los contratos temporales, incluidos los formativos, de relevo e interinidad, por las causas previstas en los artículos 22 y 23 del Real Decreto-ley 8/2020, de 17 de marzo, supondrá la interrupción del cómputo, tanto de la duración de estos contratos, como de los periodos de referencia equivalentes al periodo suspendido, en cada una de estas modalidades contractuales, respecto de las personas trabajadoras afectadas por estas”.

[iv] Op. cit.

Picture credits: Lay off by geralt.

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