The fifth revision of the Portuguese Labour Code (LC) entered into force on the October 1st and amended several aspects related with the companies’ internal flexibilization, in particular through the approval of new calculation rules of the compensation due for the termination of employment contract.

Thus, the compensation payable to the employee for the termination of fixed-term employment  contract, entered into after September 30th , 2013, corresponds to 18 days of base salary and seniority payments for each complete year of seniority.

Also in the case of collective redundancies, whose regime is generally applicable to the termination of indefinite employment contracts, the amount of compensation was modified, being reduced from 20 to 12 days of base salary and seniority payments.

However, in the contracts entered into before November 1st , 2011 and from the mentioned date and September 30 th , 2013, the rules for calculating the compensation reveal specificities according to the contract period to which they concern, under the transitional regime applicable. As a general rule, the amounts paid as compensation are also subject to several restrictions as to its value.

The revision of the LC also established the obligation of revising, within a period not exceeding 5 years, the elimination of the holidays of Corpus Christi, October 5th , November 1st and December 1st .