Individual redundancy in Portugal 2026: rights and severance

The company can eliminate your job for its own reasons: falling sales, restructuring, new technology. In Portugal this is called extinção do posto de trabalho (individual redundancy), and it is only lawful if the company meets 4 requirements, follows a strict procedure and pays severance.

This guide shows what the company must prove, the steps and deadlines, how much you receive, and what to do if the dismissal was done badly.

What individual redundancy is (Art. 367)

Individual redundancy is the termination of the contract by the company because that specific position is no longer needed (Art. 367). The reasons are the same as in collective redundancy (Art. 359):

• Market reasons: activity dropped, demand fell, the company sells less.
• Structural reasons: economic and financial imbalance, change of activity, reorganisation.
• Technological reasons: automation or new systems that make the role unnecessary.

The difference from collective redundancy is the number of people. Collective covers at least 2 workers (micro or small company) or 5 (medium or large) within 3 months. Below that, each dismissal follows the individual redundancy rules.

The 4 requirements, or the dismissal is unlawful (Art. 368)

The company can only eliminate the position if four conditions are met at the same time (Art. 368(1)):

1. The reason cannot be anyone's fault. Neither culpable conduct of the employer nor yours.
2. Keeping the employment relationship must be practically impossible. The law defines this: the company has no other position compatible with your professional category (Art. 368(4)). If a compatible vacancy exists, it must be offered to you before dismissal.
3. There can be no fixed-term contracts for the same tasks. If someone on a fixed-term contract is doing your work, the position is not being eliminated.
4. It cannot qualify as collective redundancy. If the numbers reach the thresholds of Art. 359, a different procedure applies.

When several identical positions exist: the selection criteria

If the section has several positions with the same content (three administrative clerks, for example) and only one will be eliminated, the company cannot choose freely. It must follow this legal order of criteria (Art. 368(2)):

1. Worst performance evaluation, with parameters known to the worker in advance;
2. Lower academic and professional qualifications;
3. Higher cost for the company of keeping the contract;
4. Less experience in the role;
5. Less seniority in the company.

Skipping this order, or using discriminatory criteria, makes the dismissal unlawful (Art. 384).

One protection few people know: if you were transferred to a different position in the 3 months before the procedure started and the new position is eliminated, you have the right to return to your previous position, if it still exists, with the same base pay (Art. 368(3)).

The procedure step by step (Art. 369 to 371)

The process has fixed stages and deadlines. If the company skips a step, you gain grounds to attack the dismissal.

1. Written communication (Art. 369). The company writes to the works council (or union committee, if there is none) and to you. It must state: the need to eliminate the position and the reasons, the section concerned, the need to dismiss you, your professional category, and the selection criteria used.

2. Response period: 15 days (Art. 370(1)). You, the workers' representative structure and, if you are a union representative, the union can send a reasoned opinion: contesting the reasons, the requirements, the criteria, or proposing alternatives to the dismissal.

3. ACT verification (Art. 370(2)). Within 5 working days of the communication, you can ask ACT (the labour inspectorate) to verify whether the requirements are met, informing the company. ACT sends its report within 7 days.

4. Decision (Art. 371). The company can only decide after 5 days have passed from the end of the opinion period (or from the ACT report). The decision must be in writing and contain: the reason, confirmation of the requirements, proof of how the selection criteria were applied (if there was opposition), the amount, form, moment and place of payment of severance and credits, and the termination date.

5. Notice period (Art. 371(3)). The decision must reach you with minimum notice before the termination date.

If the company fails to give full notice, the contract only ends when the missing period has run, and the company pays the salary for those days (Art. 363(4), applied by Art. 372).

During the notice period: paid time off and early exit

Two rights almost nobody uses (Art. 364 and 365, applied by Art. 372):

• A paid credit of 2 working days per week. Use it to look for a job, attend interviews, sort out paperwork. Tell the company 3 days in advance and split the hours across the week as it suits you.
• You can leave before the end of the notice period without losing severance. Just declare it with a minimum of 3 working days' notice (Art. 365). Found a new job halfway through the notice? You leave and still receive the severance.

How much you receive: the severance (Art. 366)

Severance in an individual redundancy is exactly the same as in a collective redundancy (Art. 366, applied by Art. 372).

Severance = (base pay + seniority payments, divided by 30) times days per year times years of service

• 14 days per year for contract time from 01/05/2023 (Law 13/2023).
• 12 days per year for time between October 2013 and April 2023.
• Contracts started before 01/10/2013 have more favourable transitional rules.
• Fractions of a year count proportionally.

Only base salary and seniority payments count. Meal allowance, overtime, bonuses and commissions are excluded. There are caps: the salary that counts is limited to 20 times the minimum wage (18,400 euros in 2026) and the total cannot exceed 12 times your monthly base pay.

Watch out for the acceptance presumption: if you receive the full severance, the law presumes you accepted the dismissal (Art. 366(4)). To challenge it in court, you must return the amount or place it at the company's disposal (Art. 366(5)). Before deciding, read challenging a dismissal after receiving compensation.

If the company does not pay, the wage guarantee fund (FGCT) guarantees half of the severance (Art. 366(3)).

Unemployment benefit: you qualify

Individual redundancy is a termination by the company's initiative. For Social Security it is involuntary unemployment (Decree-Law 220/2006), so it gives the right to unemployment benefit. You need:

• Qualifying period: 360 days of contributions in the last 24 months.
• Company declaration: form RP-5044, proving the reason for termination. Demand it when you leave, together with your work certificate.

When the dismissal is unlawful (Art. 384)

An individual redundancy is unlawful if the company:

• Fails any of the 4 requirements of Art. 368(1);
• Does not respect the order of selection criteria of Art. 368(2);
• Does not make the communications required by Art. 369;
• Does not place the severance and all termination credits at your disposal by the end of the notice period.

There are also special protections:

• Pregnant workers, recent mothers, breastfeeding workers and workers on parental leave: the dismissal requires a prior opinion from CITE, the equality commission (Art. 63). Without it, the dismissal is unlawful.
• Outsourcing ban: the company cannot outsource the functions of your position for the following 12 months (Art. 338-A). Doing so is strong evidence of unlawful dismissal.
• [Common interpretation:] hiring someone else for the same functions right after contradicts the stated reason and is used in court as proof that the position was never really eliminated.

The deadlines to react:

• 5 working days to request the suspension of the dismissal through an injunction (Art. 386).
• 60 days from the communication (or the termination date, if later) to challenge it in court (Art. 387).

If the court declares the dismissal unlawful, you are entitled to reinstatement or, if you prefer, compensation of 15 to 45 days per year (Art. 391), plus salaries from the dismissal until the ruling. See the warning signs in can my employer fire me like this?

For employers: eliminating a position without creating an unlawful dismissal

This section is for you, the business owner. Individual redundancy is the legal route to reduce structure, but courts strike down dismissals over avoidable procedural mistakes. The 6 steps:

1. Document the reason. Falling revenue, reorganisation, new software: gather dated numbers and documents. The reason must exist before the decision, not after.
2. Check the 4 requirements of Art. 368. Above all: no position compatible with the worker's category, and no fixed-term contracts for the same tasks.
3. Apply the selection criteria in the legal order (Art. 368(2)) when identical positions exist, and keep proof. Performance evaluations only count with parameters the worker knew in advance.
4. Meet the communications and deadlines: complete written communication, 15 days for the opinion, plus 5 days before the decision. The written decision must contain everything in Art. 371(2).
5. Pay everything by the end of the notice period. Severance and credits made available late render the dismissal unlawful (Art. 384). It is the most expensive and most common mistake.
6. After termination, do not hire or outsource for the same position. Outsourcing those functions is banned for 12 months (Art. 338-A), and recruiting for the same tasks dismantles the stated reason in court.

An unlawful dismissal costs back pay, reinstatement or increased compensation, plus fines. If the problem is the worker's behaviour, the correct route is the disciplinary procedure.

5 common mistakes

1. Spending the severance before deciding whether to challenge. Receiving it in full presumes acceptance (Art. 366(4)). To go to court, you must return it.

2. Missing the deadlines. 5 working days for the suspension, 60 days for the challenge. After that, the dismissal becomes final.

3. Confusing it with dismissal for cause. In a redundancy there is no fault of yours. Do not sign anything admitting misconduct or poor performance.

4. Not using the paid time off or the early exit. You have 2 paid days per week to look for work, and you can leave early with 3 working days' notice without losing severance.

5. Leaving without the RP-5044 and the work certificate. Without the declaration, your unemployment benefit is delayed. Request the documents in writing on your last day.

Useful links

• Severance calculator: the exact amount, with the Law 13/2023 split.
• Unemployment benefit check: see if you qualify and how much.
• Collective redundancy in Portugal: the twin figure, for 2 or more workers.
• Termination of employment in Portugal: where redundancy fits in the overall map.
• Fired in Portugal: the first 48 hours: documents, evidence and deadlines right after the news.
• Challenging a dismissal after receiving compensation: the acceptance presumption explained.