Collective redundancy in Portugal 2026: how severance is calculated

Collective redundancy is when the company ends several contracts at once for its own reasons, not yours. The law requires a set procedure, a notice period and severance pay.

This guide shows what counts as collective, the steps the company must follow, how much notice you are owed, and how the severance you will receive is calculated.

What collective redundancy is (Art. 359)

Not every dismissal of several people counts as "collective" in the eyes of the law. Art. 359 requires three things at the same time.

• A company reason: closing sections or cutting staff for market, structural or technological reasons. Nothing to do with your behaviour.
• A minimum number: at least 2 workers in a micro or small company, or 5 in a medium or large company.
• A 3-month window: the dismissals must happen at the same time or within the same 3-month period.

If the number is smaller, it is not collective redundancy. It becomes abolition of a job position (Art. 367), which has a similar procedure but for a single role.

The procedure: what the company must do

A collective redundancy cannot be an overnight decision. The law requires set steps. If the company skips one, the dismissal becomes challengeable.

1. Initial communication (Art. 360). The company notifies, in writing, the works council or the union (and DGERT). It must state the reasons, how many it will dismiss, the categories, the selection criteria and how it will calculate severance.

2. Information and negotiation phase (Art. 361). A period of at least 15 days opens for negotiation. Alternatives can be discussed: fewer dismissals, early retirement, schedule changes.

3. Final decision (Art. 363). Only then does the company tell each worker, in writing, the decision to dismiss, with the notice due.

If there is no works council or union, the workers can appoint a representative committee within 5 working days.

The notice period: how much time you get (Art. 363)

The company must give you advance notice. The period depends only on your seniority.

During the notice period you keep working and being paid normally. You are also entitled to time off to look for a new job.

How much you get: severance (Art. 366)

This is the part that matters most. Severance for collective redundancy follows Art. 366 and uses a simple formula.

Severance = (pay divided by 30) times days per year times years of service

The number of days per year changed with Law 13/2023:

• 14 days per year for contract time from 01/05/2023.
• 12 days per year for time between October 2013 and April 2023.
• Contracts that started before 01/10/2013 have more favourable transitional rules.

"Pay" is only the base salary plus seniority payments. It does not include meal allowance, overtime or variable bonuses.

Collective redundancy and unemployment benefit

Good news: collective redundancy is a termination by the company. For Social Security it is involuntary unemployment, which gives the right to benefit.

To receive it you need two things:

• Qualifying period: 360 days of contributions in the 24 months before becoming unemployed.
• Company declaration: form RP-5044, which the company gives you and which proves the reason for the termination to IEFP.

What if the procedure was done wrong

You cannot refuse the company's decision, but you can challenge it in court if there are mistakes. The most common ones:

• The initial communication to the council or union was missing.
• There was no 15-day negotiation phase.
• The criteria for choosing workers were discriminatory.
• The notice period was shorter than it should have been.

You have 60 days from the termination to file a challenge (Art. 388). If the court rules in your favour, the dismissal is declared unlawful: you gain the right to reinstatement or to higher compensation, of 15 to 45 days per year (Art. 391), plus the wages from the dismissal to the ruling.

Collective redundancy vs abolition of a position

These are often confused. The difference is the number of people.

[Current interpretation:] severance and the right to benefit are the same in both cases. What changes is the procedure (collective requires negotiation with the representative body) and the number of workers involved.

What is on the table for the future

[Proposal:] the labour reform under discussion (known as "Trabalho XXI") proposes raising collective redundancy severance from 14 to 15 days per year. It is not law yet. Until it is published in the official gazette, the 14 days stand. When (and if) it is approved, this guide is updated.

5 common mistakes

1. Thinking the full salary counts. Severance is only on base pay + seniority payments, not the net amount and not with allowances.

2. Accepting the first offer without checking your seniority. Every year counts. Confirm your exact hire date, because it changes the notice and the amount.

3. Forgetting the RP-5044. Without that declaration, your unemployment benefit claim is delayed. Ask the company for it when you leave.

4. Letting the 60 days pass. If the procedure was done wrong, you only have 60 days to challenge it in court. After that, the right is lost.

5. Confusing it with dismissal for cause. In a collective redundancy there is no fault on you. Do not sign anything that admits faults of yours.

Useful links

• Severance calculator the exact amount, with the Law 13/2023 split.
• Unemployment benefit check see if you qualify and how much.
• Termination of employment: the 5 routes where collective redundancy fits in the overall picture.
• Can my employer fire me? Is it legal? how to tell whether a dismissal follows the law.