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Employment contracts in Portugal.

Learn about employment contracts in Portugal thanks to Horizons’ up-to-date guide.

Horizons is where real, local hiring expertise meets world-class customer service. Quickly and compliantly hire employees in more than 150 countries worldwide, without the need to open a local entity.

Standard employment contract in Portugal: Open-ended contract

Indefinite-term contracts are by far the most common type of employment contract in Portugal. These contracts provide employees with more robust protections than fixed-term contracts and it is more difficult to terminate employees on these contracts.

Alternative employment contract in Portugal: Temporary contract

Fixed-term contracts are only possible in certain cases where they can be justified by a certain situation: replacing an absent employee (such as someone on parental leave), and to complete a specific temporary project.

Are there other types of employment contracts in Portugal?

There are several other types of employment contracts available in Portugal, including: 

  • Contract of employment of unspecified duration
  • Short duration contract of employment
  • Part-time contract of employment
  • Provision of services

These employment contract types are less relevant for companies looking to do business internationally in Portugal. If you are an international company looking to hire in Portugal, it is recommended to go with an open-ended contract.

Frequently asked questions

The standard employment contract in Portugal is an open-ended contract. The open-ended contract is what is used most often in EOR setups.

The alternative employment contract in Portugal is the limited or temporary contract. This contract is only to be used in specific situations such as:

  • Replacement of absent EE (e.g. maternity cover)
  • Seasonal activity
  • Exceptional increase of activity
  • Occasional task that is non-durable and precisely defined
  • Monitoring of public work

The main differences between the standard and alternative employment contracts in Portugal are:

  • The scope of the contract; the standard (open-ended) contract can be used in many more versatile situations compared to the alternative (temporary) contract.
  • Termination procedures; given the limited nature of temporary contracts, it is much easier to terminate employment from both sides.

Note that if an employee is on a temporary contract (maximum duration 2 years), and their contract is renewed 3 times, it is then automatically converted to an open-ended contract.

The open-ended contract will be suitable for most hiring projects in Portugal. You can contact us for an assessment of your specific situation.

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