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Labour reform 2026 in Portugal: what changes for dismissal

Labour reform 2026 in Portugal (Trabalho XXI): what it wanted to change for dismissal and why it was rejected on 19 June 2026. Before vs after.

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The labour reform 2026 (the Trabalho XXI package) wanted to change the most sensitive part of dismissal: what happens after a court says a dismissal was unlawful. It was rejected by the Assembly of the Republic on 19 June 2026, in the first plenary vote. Nothing changed: the current Labour Code still applies, and going back to the job stays the rule.

This guide shows, point by point, what the package wanted to change for dismissal, and what stays in force today now that it has fallen.

First, where this stands

Trabalho XXI was rejected. It fell in the first plenary vote, the vote in general, on 19 June 2026.

A simple timeline:

July 2025 the Government presents the draft in the social dialogue.
March 2026 the Government steps back from simplifying just cause dismissal, but keeps the reinstatement part.
14 May 2026 the Council of Ministers approves the bill, without union agreement.
19 May 2026 the bill is submitted to the Assembly of the Republic.
19 June 2026 the vote in general. Rejected. In favour: PSD, IL, CDS. Against: PS, Chega, Livre, PCP, BE, PAN, JPP.

[Rejected proposal:] everything that follows is what was in the bill. It never became law. Because it was rejected in the general vote, it did not move to the detailed stage. The Government has said it wants to try again, which would be a new process.

The big change it wanted: reinstatement would stop being guaranteed

Today, when a dismissal is ruled unlawful, the rule is clear: the worker returns to the job. It is called reinstatement (Art. 389 of the Labour Code).

There are only two exceptions where the company can oppose taking the worker back (Art. 392):

Micro company (fewer than 10 workers), or
A worker in an administration or management role.

The bill wanted to remove that limit. Any company would be able to oppose, for any worker, and reinstatement would stop being guaranteed. With the rejection of 19 June 2026, this did not happen: the two exceptions above are still the only ones.

[Current reading:] this was the point most contested by the unions. In practice, it would turn the right to return to the job into compensation, letting a company buy out a worker it dismissed badly. For now, the right to return stands.

The money: how much the compensation rises

The trade off for opposing reinstatement is higher compensation. The bill wanted to change that value.

	Current law (Art. 392)	Trabalho XXI bill
Who can oppose	Only micro company or senior role	Any company, any worker
Compensation per year	30 to 60 days	45 to 60 days
Minimum	6 months of pay	6 months of pay
Who sets the value	The court	The court

"Pay" means base salary plus seniority payments. The court sets the number of days within the range, based on seniority and salary level.

Estimate your dismissal compensation

The calculator applies the current Labour Code rules and splits your contract time across the different regimes. Enter your base salary, the start date and the end date.

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What stays in force today

These points are the current law. They were not going to change even under the bill, and with the rejection they stay exactly as they are.

The disciplinary procedure. To dismiss for just cause, the company still has to open a process, send the statement of charges and let you reply. The Government stepped back from simplifying this.
The compensation at the worker request. If you are unlawfully dismissed and do not want to return, you can request the compensation instead of reinstatement: 15 to 45 days per year (Art. 391). That value stays.
The pay until judgment. Between the unlawful dismissal and the court decision, you keep the right to the pay you stopped receiving (Art. 390).
The deadline to challenge. You still have 60 days to take the dismissal to court.

What about someone who already took the compensation and wants to challenge?

[Rejected proposal:] the bill would also have changed the rules for someone who accepts the compensation and then decides to go to court, removing the duty to return the amount up front. With the rejection of 19 June 2026, this did not happen. The current rule stays.

So the practical rule is simple: before signing any settlement receipt, confirm what you are giving up. Accepting the full compensation can be treated as accepting the dismissal and close the door to claiming more later.

What to do if you are dismissed now

The law that counts is the one in force on the day of your dismissal. In June 2026, that is the current Labour Code.

Keep the date of the dismissal letter. It sets the rules that apply.
Do not sign the settlement straight away. Confirm the figures and what you are giving up.
Check that the procedure was followed. No statement of charges? No reply phase? It may be unlawful.
You have 60 days to challenge in court from the termination.

Can they dismiss you like this?

Answer a few questions and find out whether your dismissal follows the law or whether there are grounds to challenge it.

See the guide →

Useful links

Termination of employment in Portugal the five ways a contract can end.
Severance calculator estimate the value under the current rules.
Collective redundancy in Portugal when the company lets several people go.
Constructive dismissal in Portugal when you are forced to leave.
Received a disciplinary notice: what to do the first step of a disciplinary process.

Frequently asked questions

What changes for dismissal with the 2026 labour reform?+

The central point was reinstatement. Today, in an unlawful dismissal, only a micro company or a management role can oppose taking the worker back (Art. 392). The bill wanted to extend that option to every company and every worker, and to raise the compensation in that case from 30 to 60 days to 45 to 60 days per year. It was rejected on 19 June 2026, so nothing changed. The current rule stays.

Is the labour reform already in force?+

No. The bill was rejected by the Assembly of the Republic on 19 June 2026, in the first plenary vote. It never became law and, after the rejection, it did not move forward. The current Labour Code applies. The Government took the topic back to the Social Concertation on 15 July 2026, with no set timeline: any new attempt would be a new process.

What is opposition to reinstatement?+

When a court rules a dismissal unlawful, the rule is that the worker returns to the job (reinstatement). Opposition to reinstatement is the employer asking the court for the worker not to return, paying compensation instead (Art. 392). Today it is only possible in micro companies or for senior roles. The bill wanted to extend it to any company, but it was rejected.

How much is the compensation for unlawful dismissal?+

When the employer opposes reinstatement, the bill raises the value from 30 to 60 days to 45 to 60 days of base pay and seniority payments for each year of service, set by the court (Art. 392). The compensation the worker can request instead of returning stays at 15 to 45 days per year (Art. 391).

If I am dismissed without reason, can I still go back to the job?+

Yes. Reinstatement is the rule and only falls away if the company is a micro company or the role is a management one. The bill wanted to let any company ask the court not to take you back, paying higher compensation. But it was rejected on 19 June 2026, so reinstatement stays guaranteed as it is today.

Does the reform make just cause dismissals easier?+

No. In March 2026 the Government stepped back from simplifying just cause dismissal. The disciplinary procedure, the statement of charges and the worker safeguards remain. The bill focused on the next stage, once the dismissal has already been ruled unlawful, with opposition to reinstatement. With the rejection on 19 June 2026, even that did not pass.

If I am dismissed now, does the new or the old law apply?+

The law in force on the date of the dismissal applies. The bill was rejected, so the current Labour Code applies: reinstatement as the rule and opposition limited to micro companies and senior roles (Art. 392). Always keep the date of the dismissal letter, because it sets the rules that apply.

Official sources

4 references

This guide is for informational purposes only and does not constitute legal advice. For your specific situation, consult a lawyer or official authority. Found an error? Let us know at ola@despacho.pt.