Summary
It was recently approved (and awaits for promulgation) the Parliament Decree that intends to amend the transfer of undertaking´s legal regime set forth under the Portuguese Labour Code in force.
Provided that at this stage of the procedure, the final version of the legal diploma at stake is still unknown, we shall disclose its final wording in due time and update this content.
In detail
Scope
The projected 13rd amendment to the Portuguese Labour Code in force is intended to regulate, with regard to the employees affected by a transfer operation, assignment or reversal of a company or establishment or part of a company or establishment that constitutes an economic unit, the right to oppose, by written form, to the transfer of their employment contract, should this cause them serious harm.
The obligations granted by transferor and acquirer under the information and consultation phase were also subject to amendments and became broader, the possibility of intervention of the ACT - Authority for Working Conditions being one of them, scenario which up to the present moment, was not regulated.
Ultimately, we draw attention to the jointly liability set forth, applied to the transferor, for a longer period – two years - in case of employees´claims related to employment credits, failure to comply with labour obligations or arising from contract´s termination, as well as for the respective social charges, occurred up to the operation´s date.
Extension of rights applied to employees potentially affected by a transfer operation
Employees affected by the projected transfer operation may oppose to their individual transfer of the employment contracts in force, provided that they express it to the employer in writing and provided that serious prejudice directly arising from the potential transfer of their labour employment contracts as a result of the planned operation is invoked.
This right of opposition should impact:
- The maintenance of the opponent employee at the service of the transferor, as his employer ( very unlikely to happen, notably on operations that imply extinction of the transferor, no legal solution being presented in this scenario until the current date); or
- The termination of contract by initiative of the employee, with immediate effect, with entitlement to the compensation set forth by law.
Issues such as evidence examining by the employer or confirmation of such alleged grounds by the employee may be raised, being expected that the final wording of the diploma does clarify and details these and other related aspects.
Transfer operation execution
The fact that an opposition right is exercised by an employee will not have the effect of preventing the projected transfer operation to proceed with its execution, as it will impact only on the individual and personal sphere of the opponent employee – non-transfer of his employment contract by effect of the operation.
Joint Liability
As a result of the projected legislative amendments, the transferor shall be deemed as jointly liable for employee´s claims emerging from employment contract ‘execution, for its violation or arising from its termination, and for the corresponding social charges occurred up to the date of transfer, for the period two years after the transaction´s date of the transaction – period which is twice as long as the previous one set forth, of only one year.
Information and consultation obligations
The projected recent amendments will impose the need to comply with more extensive information and consultation duties, such as granting specific information duties before the Authority for Working Conditions (ACT), notably disclosure of the transaction contract´s entered into between transferor and acquirer, and description of the elements integrating the economic unit at stake, in addition to other legal duties previously set forth, that will continue to be in force.
Negotiation
The Authority for Working Conditions (ACT) at the Parties request, may also participate in the negotiation process, notably on the measures being applied to employees, as a result of the transfer, the same occurring with the trade union associations, which are now allowed to also participate in the process.
Representative Commission
It is also envisaged that in the absence of employees ‘representative structures, employees covered by the transfer may designate a representative committee to also participate in the procedure.
Temporal impact of the projected amendments
The projected amendments are likely to have a time-consumption significant impact with regard to the timeline allocated to the compliance of the new labour obligations projected to be ensured both by the transferor and acquirer, when compared to the anticipation of only 10 days (to be fulfilled before the transaction takes effect), notice period which is still in force.
Administrative offences´ new regime
It shall be deemed as a very serious administrative offence:
- i) The conduct of the employer, if qualified as business ‘simulation; and
- ii) The conduct of the transferor or of the acquirer that doesn’t recognize the employer’s position transfer as a direct result of the transfer.
In this regard, the ACT´s notification must state whether or not the employer's position in the employees' employment contracts has or not been transferred.
It will also constitute a serious administrative offence:
- The transfer taking place before the period of 7 (seven) working days following the deadline for the representative commission´s appointment is elapsed, or after the agreement or termination of the deadline for consultation of the employees’ representatives;
- Breach of information duty before the ACT;
- Breach of the information and consultation duties granted to the employees covered by the transfer;
- iv) Failure to observe the effects resulting from the employees´ opposition.
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