Fixed-term contracts in Portugal 2026: rules and changes

The rules for fixed-term contracts in Portugal in 2026 are unchanged: a maximum of 2 years for a fixed-term contract, 4 years for an open-ended fixed-term contract, and 3 renewals. The Trabalho XXI labour reform wanted to stretch all of this, but it was rejected by the Assembly of the Republic on 19 June 2026. Nothing changed.

This guide shows you what applies today first. Then, point by point, what the bill wanted to change. So you know what you can demand and what fell with the rejection.

The rules that apply today

A fixed-term contract only exists for temporary needs of the company, and only for the time strictly necessary (Art. 140(1)). The law gives examples: replacing an absent worker, seasonal activity, an exceptional increase in activity, a defined project or construction job (Art. 140(2)).

This table sums up the limits in force:

Two details many people miss:

• History in the same job counts. If you already had fixed-term contracts, temporary agency work or even freelance invoices (recibos verdes) for the same position at the same company or group, that time counts towards the 2-year limit (Art. 148(6)).
• The company cannot recycle the position. When a fixed-term contract ends, the company must wait a period equal to one third of the contract's duration before putting another fixed-term worker in the same position (Art. 143(1)).

What the bill wanted to change on duration

[Bill:] everything in this section and the next two was in the Trabalho XXI bill, rejected in the first general vote on 19 June 2026. It is not law and never came into force.

The practical reading: longer fixed-term contracts. More flexibility for the company. For you, more time until the question "do you go permanent or do you leave?". With the rejection, none of this moved forward.

The rise of the minimum from 6 months to 1 year would have cut down on short contracts. Today it is still possible to sign contracts shorter than 6 months in the cases of Art. 140(2) (replacement, seasonal work, occasional tasks).

Renewals: the brake that was going to disappear

Today there are two brakes on renewals (Art. 149(4)): a maximum of 3 renewals, and the renewals added together cannot exceed the initial duration of the contract.

[Common interpretation:] this was one of the changes with the biggest real-world impact, because short initial contracts would lose their own ceiling. With the rejection, the two brakes of Art. 149(4) stay in force.

More grounds to hire you on a fixed term (that did not pass)

The bill widened the list of situations where a company could use a fixed-term contract:

• First job. Anyone who has never worked under an employment contract could be hired on a fixed term. Today this is not a valid ground. Since 2019, only hiring people in very long-term unemployment justifies a fixed term without a temporary need (Art. 140(4)(b)).
• New companies, of any size. Today, a company launch only justifies a fixed-term contract if the company has fewer than 250 workers (Art. 140(4)(a)). The bill removes the size limit, keeping the 2-year launch window.
• A formally declared calamity.
• Pensioners, whether retired by age or by invalidity.

[Common interpretation:] the return of the "first job" ground was the most debated point. Unions said it trapped young people in precarious work; the Government said it eased entry into the job market. The rejected version restricted the ground to people who had never had an employment contract. With the rejection, this ground still does not exist in the law.

What does not change

These points apply today, and not even the rejected bill wanted to change them:

• Compensation at the end of the contract: 24 days of base pay and seniority payments per year of service, when the company lets the contract expire (Art. 344(2) and Art. 345(4)).
• Non-renewal notice: the employer must still give 15 days written notice for a termo certo contract (Art. 344(1)).
• Written, concrete reason: the contract must state the facts that justify the term (Art. 141(3)). Without it, you are permanent from day one.
• Conversion into a permanent contract when the limits are breached (Art. 147).
• Unemployment benefit: the expiry of a fixed-term contract still counts as involuntary unemployment.

Is your contract about to end? The guide on the non-renewal of a fixed-term contract explains deadlines, compensation and documents, step by step.

Where the reform ended up

A simple timeline:

• July 2025: the Government presents the draft to the social partners.
• March 2026: revised version. The 3-year and 5-year maximums stay, the "calamity" ground comes in, and the "first job" ground is tightened.
• 14 May 2026: the Council of Ministers approves the bill, without union agreement.
• 19 May 2026: the bill enters the Assembly of the Republic.
• 3 June 2026: second general strike against the package.
• 18 June 2026: debate in Parliament.
• 19 June 2026: rejected in the first general vote. In favour: PSD, IL and CDS-PP. Against: PS, Chega, Livre, PCP, BE, PAN and JPP. The bill fell.
• 15 July 2026: the Social Concertation meets for the first time after the rejection. The Government keeps the intention to revise labour law, with no timeline and no new text.

With the rejection in the first general vote, the process died there: no article-by-article debate, no final vote, no promulgation. The dismissal side of the same package is covered in the guide on the 2026 labour reform and dismissal.

What you should do now

• Check the reason in your contract. It must be in writing, with concrete facts (Art. 141(3)). A vague or missing reason means a permanent contract from the start.
• Do the maths on duration. Add the initial contract, renewals and previous contracts in the same position. Past 2 years? You are already permanent under today's law (Art. 147(2)).
• Count the renewals. At the fourth renewal, or when the renewals added together exceed the initial period, you become permanent (Art. 147(2)).
• If the contract is ending, demand the 15 days written notice, the 24 days per year compensation and form RP 5044 for unemployment benefit.
• On probation under a fixed-term contract? Different rules apply. See the guide on the probation period in Portugal.

If the company does not comply, keep the contract and payslips and file a complaint with the ACT. The process is in the guide on how to file an ACT complaint.

This guide is for information purposes and does not replace individual legal advice.