Temporary agency work in Portugal: your rights

Do you work at one company while another one pays you? That is temporary agency work, and it has its own rules in Articles 172 to 192 of the Portuguese Labour Code. The law protects you on three fronts: equal pay with your colleagues, time limits, and conversion into a permanent contract when the rules are broken.

How the temporary work triangle operates

Article 172 defines the three pieces of the system:

• Temporary work contract: the fixed term contract between you and the agency. The agency pays you and is your employer.
• User agreement: the service contract between the user company and the agency. This is where the company you work at justifies why it needs you.
• Open ended contract for temporary assignment: the lesser known variant. You are permanent staff of the agency and get assigned to different users, with specific rights between assignments.

Everything rests on the licence. An agency can only operate with its own licence. If it assigns you without one, Article 173 is blunt: the contracts are void and the law treats your work as provided to the user under a permanent employment contract (paragraphs 1 and 3). As an alternative, you can opt for compensation under Article 396, within 30 days of starting work (paragraph 6). Signing a user agreement with an unlicensed agency is a very serious administrative offence for both companies (paragraph 7).

You are not left alone to collect either: with an unlicensed agency, the agency and the user are jointly liable for your employment claims from the last 3 years plus social security charges (Article 174(1)). Even with a licence, managers, directors and group companies of either the agency or the user are subsidiarily liable for your claims (Article 174(2)).

Mind the border with other setups: if you work for a digital platform through a fleet or intermediary, a different regime applies. See the platform work guide. And if you were put on recibos verdes with a fixed schedule and a boss, that is neither agency work nor self employment: see the 8 signs of false self employment.

When a company may use agency workers

Agency work only covers temporary needs. A user agreement can only be signed in the situations allowed for fixed term contracts (points a) to g) of Article 140(2): replacing an absent worker, seasonal activity, exceptional increase in activity, among others) plus four cases of its own (Article 175(1)):

• An open vacancy while recruitment to fill it is under way;
• Intermittent need for labour caused by activity swings during days or parts of days, up to half the normal weekly working time practised at the user;
• Direct family support of a social nature, during days or parts of days;
• A temporary project, such as setting up or restructuring a company, or industrial assembly or repair.

Three brakes worth knowing:

1. The burden of proof is on the user. The company where you work must prove the facts that justify using agency work (Article 176(1)). Without a valid reason, the user agreement is void and you become the user's permanent employee (paragraphs 2 and 3).
2. Particularly dangerous jobs are off limits for agency workers, unless that is your professional qualification (Article 175(4)). Breach is a very serious offence.
3. They cannot use you to paper over dismissals. A user agreement cannot cover needs previously met by a worker dismissed in the previous 12 months through collective redundancy or job extinction (Article 175(5)).

The contracts must be in writing, and the gaps work in your favour

Both the user agreement (Article 177) and your own temporary work contract (Article 181) must be written, in two copies, with mandatory content: identification of the parties, the number and date of the agency's licence, the justifying reason with concrete facts, the activity, place, working time, pay and dates. One copy of your contract stays with you (Article 181(4)). Ask for it.

What happens when the form fails:

The pattern is clear: almost every serious failure converts your situation into a permanent contract with the user, the company where you actually work. In each of those cases you may instead opt for the compensation of Article 396 within 30 days of starting work. To see what being permanent means, read the permanent contract guide.

The user agreement must also carry the work accident insurance policy as an annex, covering you. Without it, the user is jointly liable for compensation after a work accident (Article 177(3)). See the work accident guide.

How long it can last, and when you become permanent

The duration caps are the same on both sides of the triangle:

• General rule: 2 years, renewals included (Articles 178(2) and 182(4)).
• Vacancy with recruitment under way: 6 months.
• Exceptional increase in activity: 12 months (Article 175(2)).

Your fixed term agency contract can be renewed up to 4 times while the reason holds (Article 182(2)). The exception is replacing an absent worker: no renewal limit while the absence lasts (Article 182(3)).

Three conversion rules are worth gold:

1. The 10 day rule. If you stay in service at the user 10 days after the user agreement ends, with no new contract, you become the user's employee on a permanent contract (Article 178(4)).
2. The 4 year rule. Successive temporary work contracts across different users, with the same agency or group, cannot exceed 4 years. Past that, your contract converts into an open ended contract for temporary assignment (Article 182(8) and (9)): you become permanent staff of the agency.
3. The no succession rule. Once the user agreement hits its cap, the user cannot place another temp, fixed term hire or service provider in the same job before a period equal to one third of the previous contract's duration has passed (Article 179(1)). Breach: the contract counts as permanent between you and the user, and all your seniority counts (Article 179(3)).

When the contract simply reaches its term and lapses, the general rules on expiry of fixed term contracts apply, including the compensation (Article 182(7)). See the amounts in the fixed term non renewal guide and check everything you are owed in the final pay guide.

Your rights are worth the same as your colleagues' rights

During the assignment, Article 185 splits the roles:

• The user runs your day to day: you follow its rules on how, where and for how long you work, contract suspension, health and safety and access to social facilities (paragraph 2). The user draws up your schedule and books the holidays you take in its service (paragraph 3).
• The agency keeps disciplinary power (paragraph 4). If the user applies disciplinary sanctions to you, it commits a serious administrative offence (paragraph 12).

On money, the ruler is equality:

• Minimum pay: the most favourable of the collective agreement rate applying to the agency, the one applying to the user for your role, and what the user pays for equal work or work of equal value (paragraph 5). Never below the minimum wage. See the minimum wage guide.
• Holidays, holiday and Christmas allowances and the other regular periodic benefits the user's workers receive for equal work (paragraph 6).
• The user's collective agreement applies to you in the same role (paragraph 10).
• Assigned abroad for less than 8 months: a monthly expense allowance of up to 25 percent of base pay (paragraph 8).

The user must also tell you about open positions at the company for work identical to yours, so you can apply (paragraph 11). That is the door into permanent employment. Use it.

On health and safety you get the same level of protection as the user's own workers (Article 186(1)): the user informs the agency of the job's risks before the assignment, the agency passes everything to you in writing, health exams are the agency's responsibility and job specific training is the user's responsibility. The background duties are in the health and safety guide.

Training: if your contracts with the agency exceed 3 months in a calendar year, the agency must give you professional training of at least 8 hours (Article 187(1) and (2)). And it bears repeating, because it is the most common scam: the agency cannot charge you anything, not for guidance, not for training, not for "placement" (Article 187(4)).

If the agency does not pay: the bond and the other routes

Agencies must post a guarantee bond to operate. That bond covers pay, compensation and severance in arrears for more than 15 days, and social security contributions in arrears for more than 30 days (Article 190(1)).

The procedure runs on short deadlines (Article 191):

1. Claim your credits within 30 days of the end of the contract and notify the public employment service (in practice, IEFP).
2. Ask the employer for a debt statement, which it must issue within 5 days. If it refuses, ACT issues it within 10 days.
3. File the payment request against the bond within 30 days of the credit falling due, together with the statement.
4. If the bond cannot cover everyone, the law gives priority to pay for the final 30 days of work, up to three times the minimum wage per worker (Article 191(6)).

In parallel, the usual routes against unpaid wages still apply: a formal written demand, a complaint to ACT and, after 60 days of arrears, termination with just cause. The full map is in the late wages guide.

The law also squeezes repeat offenders: agencies can be banned from operating for up to 2 years for failing to insure workers against accidents, delaying pay by more than 30 days or not paying into the FGCT (Article 192(2)), and unlicensed operators face closure of the establishment (Article 192(3)).

Are you an employer using agency workers? Four practical points. First: check the agency's licence before signing. Without it, the worker converts into permanent staff of your company and liability for their claims is joint (Articles 173 and 174). Second: the reason in the user agreement needs concrete facts, and the burden of proof is yours (Article 176). Third: demand the annex with the work accident insurance policy, or you become jointly liable for accident compensation (Article 177(3)). Fourth: do not exercise disciplinary power over the assigned worker, which is a serious administrative offence (Article 185(12)). The wider framework is in the hiring guide and the employer obligations checklist.

This guide is general information and does not replace legal advice for your specific case. Questions? ola@despacho.pt