Service commission in Portugal: how senior roles work

Were you offered a director role in Portugal "em comissao de servico"? Or do you want to appoint a manager without making the appointment permanent? The short answer: the service commission is the Labour Code regime for positions of trust. Either party can end the assignment with 30 or 60 days of written notice, no just cause required. But the worker is not left exposed: they either return to their previous job or leave with compensation (Articles 161 to 164 of the Labour Code).

What a service commission is and which roles qualify

Marta has been an accounting technician at a company in Aveiro for six years. The board invites her to become finance director. Neither side wants to be locked in: the company wants to be able to replace its director without drama, and Marta wants a guarantee that she gets her old job back if things go wrong. This is exactly what the service commission regime exists for.

Article 161 of the Labour Code lists the roles that can be held under this regime:

• Board positions or equivalent;
• Director or management roles reporting directly to the board or to a general director or equivalent;
• Personal secretariat of the holders of any of those positions;
• Other roles involving a special relationship of trust with those officeholders, and management roles, but only if a collective bargaining agreement (the sector level collective agreement) allows it.

Outside this list there is no valid service commission. A warehouse supervisor reporting to a middle manager, for example, does not fit the general rule. He would only qualify if the sector's collective agreement said so.

The contract must be written, with two mandatory words

Article 162(3) requires written form with this content:

• Identification, signatures and address or registered office of the parties;
• The role or duties, with an express mention of the service commission regime;
• If you are already an employee: the activity you currently perform and, if different, the one you will perform when the commission ends;
• If you were hired from outside and are expected to stay: the activity you will perform afterwards.

The consequence of getting this wrong is heavy, and it falls on the employer. Without a written contract, or without the express wording, the regime does not apply (Article 162(4)). [Common interpretation:] the worker holds the role under the normal rules, meaning the appointment becomes permanent and the employer loses the easy exit of Article 163.

Sofia accepted a management role with a handshake and a pay rise. Two years later the company tried to send her back to her old post, claiming the commission had ended. It cannot: there never was a service commission, because nothing was put in writing.

There are also fines: missing the express wording is a serious administrative offence, unless the employer expressly acknowledges in writing that the role is held on a permanent basis. Missing the written form, or omitting the return activity, is a minor offence (Article 162(6)).

Existing employee or hired for the role

The regime accepts two starting points (Article 162(1) and (2)):

An employee of the company. Like Marta: you already have a contract and a category. The service commission sits on top of your contract without replacing it. When it ends, the underlying contract continues.

A worker hired for the purpose. Like Rui, recruited from outside as commercial director. Here the contract is born with the commission and, as a rule, dies with it. The exception: the parties can agree in writing that the worker stays with the company after the commission ends, stating the activity they will then perform.

In both cases, time under a service commission counts in full towards seniority, as if it had been worked in your base category (Article 162(5)). Six years with the company are six years, whether two of them were spent in a director's chair or not.

How it ends: 30 or 60 days of notice, no just cause

This is where the service commission differs from everything else in the Labour Code. Either party can end the commission, without invoking any just cause, by giving written notice (Article 163(1)):

• 30 days in advance, if the commission lasted up to two years;
• 60 days, if it lasted longer than two years.

Mind what is ending here: the commission, meaning the role, not automatically the employment contract. What happens to the contract is decided in the next step (Article 164).

What if there is no notice? The commission still ends, but the defaulting party owes the other one compensation under Article 401: the base pay and seniority payments for the missing notice period (Article 163(2)).

What happens when the commission ends

Article 164(1) gives the worker three outcomes, depending on the situation:

1. Returning to your job. If you were already an employee, you have the right to resume the activity you performed before the commission, or the one matching the category you were promoted to in the meantime, or the one agreed in the contract. Marta goes back to being an accounting technician, with her seniority intact. Refusing the return is a serious administrative offence (Article 164(3)).

2. Terminating the contract with compensation. If it was the employer who ended the commission, you can choose not to go back: you have 30 days from that decision to terminate your employment contract, with compensation calculated under Article 366 (Article 164(1)(b)). The window is short and runs from the employer's decision, so do not let it slip.

3. Hired from outside, no permanence agreement. If you were hired for the commission and the employer ends it, for reasons that do not amount to dismissal for cause, you are owed the Article 366 compensation (Article 164(1)(c)). [Common interpretation:] without a permanence agreement the employment ends with the commission; the compensation exists precisely to offset that.

These notice periods and the compensation amount are minimums: a collective agreement or the contract itself can increase them (Article 164(2)).

The compensation in numbers

The Article 366 formula: 14 days of base pay and seniority payments per full year of service (for time since May 2023; earlier years count at 12 days). Seniority includes the time spent on the commission (Article 162(5)).

Marta joined in May 2023 and terminates her contract in 2026, with three full years and a base salary of 2,400 euros:

• Daily value: 2,400 euros divided by 30 = 80 euros
• Per year: 80 euros x 14 days = 1,120 euros
• Compensation: 1,120 euros x 3 years = 3,360 euros

Older contracts have segments at 12 days per year. The severance calculator handles that split automatically.

Six situations, six outcomes

A service commission is not a fixed term contract

The two get mixed up in practice, so keep them apart:

• In a fixed term contract, the whole contract has an expiry date, and it is only allowed with a justifying reason listed in the law.
• In a service commission, what is precarious is the role. The underlying contract can be a normal permanent contract, and no reason at all is needed to end the commission.
• In the probation period, both sides also have an easy exit, but only at the start of the contract and with its own deadlines.

If you receive an offer for a "director on a fixed term contract", be suspicious: if the role fits Article 161, the correct instrument is the service commission, and the exit guarantees are the ones described above, not the fixed term rules.

For companies: use the regime properly, or lose it

If you are appointing a director or a trusted manager, put everything in writing before the first day in the role, with the express wording "em regime de comissao de servico" and the return activity defined (Article 162(3)). Without that, the appointment becomes permanent and the fine is a serious one. Budget for the 30 or 60 days of notice when you want to end the commission, and for the Article 366 compensation: it is owed if an existing employee chooses to leave within 30 days of your decision, and it is always owed to an outside hire without a permanence agreement. And do not use the service commission for roles outside Article 161: without coverage in a collective agreement, the regime is void and the worker consolidates the position. When the employment ends, close the accounts properly with the final pay checklist.

For unusual setups, such as chained commissions, corporate groups or ambiguous permanence clauses, checking with a lawyer or with ACT is a good investment.

General information, not legal advice. Always confirm amounts and deadlines with the official sources.