Temp Contracts or Flexibility? Portugal Squares Off Over Work Reform

Foreign residents who followed the heated debate over Portugal’s housing law will notice familiar fault-lines in the new labour shake-up. The Cabinet’s freshly unveiled package, branded Trabalho XXI, promises modern contracts and extra room for negotiation—yet opposition parties warn it may leave workers more exposed, not less. Here is how the argument is unfolding, what numbers say about precariedade, and why the outcome matters even if your own job is secure.

The Government’s vision: flexibility as an economic lever

Lisbon’s centre-right administration has stitched together more than 100 amendments to the Código do Trabalho under the marketing banner “Trabalho XXI”. Ministers claim the re-write will create a “digital-era” labour market by allowing simplified tele-work rules, easier access to lay-off mechanisms, and the option for employees to “buy” extra annual leave in exchange for a pay cut. The package also imports two EU directives—one on adequate minimum wages, another on platform gig-work—while inserting a domestic clause that guarantees mandatory minimum services during strikes in so-called essential sectors such as rail, health, and food logistics. Rosário Palma Ramalho, the Labour Minister, insists these tweaks “do not touch the constitutional right to strike or to rest” and will instead help firms meet productivity targets that Portugal has chronically missed.

Left-wing parties see a different story

That upbeat framing has landed with a thud on the opposition benches. Livre, PCP and PAN—each holding just a handful of seats but strong on social-rights rhetoric—say the plan is a manual for precarização. Patrícia Gonçalves of Livre fears the draft “normalises” rolling short-term contracts; Paula Santos from the Communist bench calls it a “war on workers”; PAN spokesperson Inês Sousa Real highlights the proposed holiday-purchase scheme as proof that the Government wants people to pay for their own downtime. The trade-union confederations are hardly calmer: the UGT labels parts of the bill “fragilizing,” while the more militant CGTP talks of a “return to the past.” Their central claim is that obliging strike committees to keep trains running and hospitals staffed could blunt the only leverage vulnerable employees possess.

Precariedade by the numbers

Statistical agencies back up at least one fear: Portugal is already a high-precariat economy. Eurostat’s 2024 snapshot shows 17.8 % of salaried workers on fixed-term or temp deals—third-worst in the EU behind Spain and the Netherlands. Among under-25s the share exceeds 60 %. Over the last decade that ratio has ticked up rather than down despite previous reforms meant to tackle exactly the same problem. The country added about 110 000 new jobs in 2023, yet almost 4 in 5 were non-permanent. Unsurprisingly, sectors most frequented by newcomers—tourism, catering, IT outsourcing—mirror these statistics, making Portugal attractive for quick hires but risky for anyone seeking long-term stability and a mortgage.

What Spain and France did differently

Neighbouring Spain rewrote its labour code in 2022 with an explicit aim to choke off temporary contracts. By abolishing the “contracto por obra o servicio,” Madrid nudged firms toward permanent hiring and introduced stiff penalties for abuse. Early data show record highs in indefinite contracts. France took another route: rather than ban flexibility, it expanded social-protection floors while updating the list of shortage professions to fast-track foreign talent. Portuguese labour economists often cite Madrid’s RED crisis-response mechanism—a furlough model that salvages jobs without mass layoffs—as a template Lisbon could copy instead of weakening collective-bargaining power.

Why the draft matters to foreign professionals

Even expats on golden-handshake packages should pay attention. Any shift toward greater casualisation can ripple into wider society: squeezing household demand, stalling pay growth and fuelling political volatility. For entrepreneurs the stakes are also direct; new limits on outsourcing, clearer rules on platform workers, and tweaks to the bank of hours could change staffing costs overnight. Digital nomads eyeing Portugal for its tax regime may welcome looser tele-work clauses, yet still rely on a pool of local talent whose conditions influence turnover. Finally, mandatory strike minimums could determine whether your commuter train or school pick-up service runs during industrial action—a recurring headache in cities like Porto and Lisbon.

The road ahead

The draft now moves to intense concertação social, a tri-partite forum of government, employers and unions, before Parliament debates line-by-line amendments in the autumn. Observers expect a summer of lobbying: business lobbies will push to keep the strike clause; unions will rally for a stronger presumption of employment status in the gig economy. Foreign residents have no vote, but community organisations often submit written opinions during the public-consultation window—usually 30 days once the final text is published. If you hold staff in Portugal or plan to sign a local contract, the safest bet is to monitor the Diário da República and brace for new paperwork by early 2026.