In Portugal, terminating an employee’s contract has many occurrences. It could be a collective dismissal due to a company that is downsizing, an employee’s retirement, an employee’s unsuitability for the current role, etc. 

Employers are responsible to give their employees a notification in writing not less than ten days before the effective date of termination. During the ten days, the employee or other personnel may express their opposition to the decision in writing. Employers will then have time to evaluate and reach a decision.

The notice period for employees in Portugal is in the range of 7 to 30 days.

The calculation for the employee’s severance pay is based on their seniority period. Regular employees in service for 3 years will receive 18 days of their salary. For every year in excess of the 3 years, they will get an additional pay of 12 days. 

Employees who have less than 3 years of work in the company, will be given a fraction of the 18 day-salary. 

The base salary and seniority are taken into account to calculate the pay which may not be over 20 times the guaranteed minimum salary. The overall amount of the severance pay may also not exceed 12 times the employee’s salary and seniority.

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