Judgment of the Supreme Administrative Court No. 4/2013. D.R. (Official Gazette) No. 93, Series I of 2013-05-15

Considering the contradiction of judgments of the North Central Administrative Court concerning the same question, that is, whether the status of manager of a commercial company without remuneration excludes the fulfilment of the situation of total and involuntary absence of employment as a legal pre-condition of the granting of unemployment benefit, this judgment unifies the case law on this matter.

Based on the characterisation of the event of unemployment as a "situation of total and involuntary absence of employment", the question of interpretation raised in these judgments is knowing what should be understood as such, that is, whether it is the absence of pay and/or actual pursuit of an activity or the total and involuntary absence of employment.

In this judgment for the harmonisation of case-law, the Supreme Administrative Court, considering that, in accordance with the applicable legislation, the granting of unemployment benefits aims to compensate the beneficiaries of the same for the absence of pay arising from unemployment and that the legal framework of the compensation in the event of unemployment presupposes an employment contract the termination of which deprives the employee of the corresponding pay, decided that the idea underlying the applicable pieces of legislation is that of an employment contract, under which the activity of the employee is provided for a remuneration.

This same idea seems to be signalled by the exclusion of a manager who is simultaneously a shareholder of a commercial company from the general social security scheme applying to employees simply due to his position. Incidentally, even after the recast of the provisions concerning the inclusion in the social security of members of corporate bodies, who became included in the general framework applying to employees, with certain specificities, those members who, in accordance with the articles of association, have the status of manager but who do not actually carry out that activity nor receive the corresponding remuneration, are excluded from that scheme.

With regard to the requirement of the unavailability to work, the Supreme Administrative Court considered that the availability to work interpreted as being an integral part of the relevant unemployment situation is essentially associated to obligations undertaken by the employee, that is, it translates into the employee being subject to control by employment centres, accepting a suitable job, socially necessary work, vocational training as well as being actively looking for a job through his own means, for which reason the fulfilment of that requirement depends upon the assessment of his attitude vis-à-vis obligations proposed to him rather than upon an ex ante judgment of the temporal possibilities of the employee.

In light of the above, the Supreme Administrative Court harmonised the case law as follows: "

The status of managing partner of a commercial company, without any right to remuneration, of an employee whose employment contract has terminated, does not preclude the characterisation of his situation as unemployment, in accordance and for the purposes of Articles 6(1) of Decree-Law No. 119/99 of 14 April and article 2(1) of Decree-Law No. 220/2006 of 3 November, respectively".

Judgment of the Constitutional Court No. 230/2013. D.R. (Official Gazette) No. 89, Series I of 2013-05-09

In this judgment, the Constitutional Court addressed the question of the possible unconstitutionality of the rule whereby decisions of the Court of Arbitration for Sports in the context of compulsory arbitration, cannot be appealed against to State courts, discussing whether the guarantee of access to courts can be guaranteed by arbitration, so that judicial review by a State court is in any case excluded, regardless of the nature of the rights and interests in question.

Analysing the question, the Constitutional Court considered that the legal imposition of arbitration for the settlement of disputes that fall within the scope of exercise of powers of authority, which simultaneously prevent immediate access to State courts, is, in itself, liable to affect the guarantees of the subjects of the Administration in a dispute.

Moreover, the Court considered that the fundamental right of access to courts cannot be satisfied by simply providing for the possibility to have recourse to the Constitutional Court to challenge the arbitration award on the grounds and under the terms of the Voluntary Arbitration Act, since the parties must also be entitled to discuss the merits of the award, for which increased possibility to have recourse to State courts is required.

In the particular case of compulsory arbitration, which, as such, is not founded on the private autonomy of the parties, the Court considered that the arbitration process should be accompanied by the best guarantees, all the more so as it concerns a relation between an individual and an entity with public power.

The Constitutional Court further considered that the level of protection of the lawfully protected rights and interests is low in this type of arbitration jurisdiction as, for pragmatic reasons associated to the fast and efficient operation of the Court of Arbitration for Sports, the guarantees relating to the arbitrators’ statute were reduced, the parties’ power to freely appoint the arbitrators limited to a pre-defined list, in the composition of which the parties concerned did not even have a direct intervention, and jurisdictional functions were attributed to a simple administrative entity. This arises from the attribution to the president of the Court of Arbitration for Sports, acting in his capacity as representative of the court, and without the parties conferring any jurisdictional power, of the power to decree precautionary measures relating to the subject matter of the dispute, thus being able to deliver a decision on the provisional settlement of the dispute without either the consent or agreement of the parties.

Accordingly, the Constitutional Court held the provision set out in the second part of number 1 of Article 8, together with the rules of Articles 4 and 5, of the Annex to Decree No. 128/XII, unconstitutional, inasmuch as they result in it not allowing the appeal to State courts against decisions of the Court of Arbitration for Sports delivered in the scope of its compulsory arbitration jurisdiction, as it considered that there was a breach of the right of access to court, together with the principle of proportionality and the principle of effective judicial protection.