Termination of employment in Portugal: the 5 paths and what changes with each (2026)

The question that changes everything: who is initiating it?

Before any calculation, before any letter, there is one single question that defines the rest: who is ending the contract, you, the employer, or neither?

The answer determines the legal path. The path determines three things:

• How much you receive (severance, compensation, or only the final settlement).
• Whether you qualify for unemployment benefit (yes, conditional, or no).
• Which deadlines and procedures apply (8 days, 15 days, 30 days, 60 days).

Flowchart of the 5 paths

                  ┌─────────────────────────────┐
                  │   Who terminates the        │
                  │   contract?                 │
                  └──────────────┬──────────────┘
                                 │
        ┌────────────────────────┼─────────────────────────┐
        │                        │                         │
   ┌────▼─────┐         ┌────────▼─────────┐       ┌──────▼──────┐
   │   YOU    │         │  THE EMPLOYER    │       │   NEITHER   │
   └────┬─────┘         └────────┬─────────┘       └──────┬──────┘
        │                        │                         │
   ┌────┼────┐              ┌────┼────┐                    │
   │         │              │         │                    │
┌──▼──┐ ┌────▼─────┐   ┌────▼──┐ ┌────▼──────┐    ┌────────▼────────┐
│Res. │ │Just      │   │Just   │ │Objective  │    │ Expiration       │
│Art. │ │cause     │   │cause  │ │just cause │    │ (Art. 343)       │
│400  │ │(Art. 394)│   │subj.  │ │(351, 359, │    │ - end of fixed   │
│     │ │          │   │(351)  │ │ 367, 373) │    │   term contract  │
│     │ │          │   │       │ │           │    │ - death          │
│     │ │          │   │       │ │           │    │ - retirement     │
└─────┘ └──────────┘   └───────┘ └───────────┘    └─────────────────┘

         OR (with both sides agreeing):
         ┌─────────────────────────────────┐
         │  Mutual agreement (Art. 349-350)│
         └─────────────────────────────────┘

Below, each path in detail.

Path 1: Resignation by the worker (Art. 400)

This is when you decide to leave, not because of any fault of the employer. Personal reason, new job, moving city, any reason or no reason works.

Minimum notice:

Form: always in writing, registered post with acknowledgement of receipt or hand delivery against a dated receipt.

What you receive:

• Salary for the days worked in the month.
• Unused holidays plus the corresponding holiday bonus (Art. 245).
• Proportional Christmas bonus up to leaving date (Art. 263).
• Proportional holiday bonus for the following year (Art. 264).

What you do NOT receive:

• Severance (none).
• Unemployment benefit (general rule; only if there is a cause treated as involuntary).

Path 2: Termination with just cause by the worker (Art. 394)

This is when you leave, but because the employer did something serious. The law treats this leaving as equivalent to dismissal: you receive severance and qualify for unemployment benefit.

Typical grounds (Art. 394 n.º 2):

• Culpable failure to pay salary (60 days creates a presumption of fault, n.º 5).
• Culpable breach of legal or contractual guarantees.
• Application of an abusive sanction.
• Culpable failure to provide health and safety conditions.
• Culpable harm to your assets.
• Offences against physical or moral integrity, honour or dignity (harassment, persecution).

Deadline: you have 30 days from learning the facts to invoke just cause (Art. 395).

Form: written letter with a description of the facts, legal grounds and the leaving date.

What you receive:

• Severance of 15 to 45 days of base salary per year of tenure (Art. 396).
• Absolute minimum: 3 months of salary.
• Full final settlement (salary, holidays, proportionals).
• Unemployment benefit, treated as involuntary, provided Social Security accepts the just cause.

Note: the Brazilian term "rescisão indireta" is the equivalent of our worker just cause termination. If you found this guide looking for that term, the matching Portuguese figure is this: Art. 394.

Path 3: Dismissal by the employer

This is when the employer ends the contract. The Portuguese Labour Code distinguishes between subjective cause (something you did) and objective cause (company reasons). The procedure is different in each.

3.1 Dismissal for subjective just cause (Art. 351)

Culpable conduct by the worker that makes keeping the contract impossible. It requires:

• A formal disciplinary procedure (Arts. 352 to 357).
• A written disciplinary notice with concrete facts.
• The right of the worker to respond within 10 working days and to bring witnesses.
• Final written decision with reasoning.

What you receive: only the final settlement. No severance. There is unemployment benefit if Social Security accepts (general rule, but not always).

If the dismissal is unlawful (void procedure, no real grounds, discriminatory motive, etc., Art. 381), you have 60 days to challenge it in labour court and you may receive 15 to 45 days per year of severance plus back pay (Art. 391).

3.2 Dismissal for objective cause

Three variants, all with right to severance and unemployment benefit:

• Collective redundancy (Art. 359): several workers at once due to restructuring.
• Post extinction (Art. 367): your role no longer exists for economic, technological or organisational reasons.
• Non-adaptation (Art. 373): after technological changes and training, you cannot adapt.

Severance: 14 days of base salary plus tenure premiums per year of tenure (contracts after 01/05/2023). Before that date, 12 days per year (Art. 366). There are two legal ceilings: salary cannot exceed 20× minimum wage, and total compensation cannot exceed 12 months of salary.

Path 4: Mutual agreement (Art. 349-350)

You and the employer sign an agreement to end the contract. It is the most flexible path but also the one with the most traps.

Critical points:

• Written form is mandatory, with date and a copy for each party.
• Right of revocation within 7 days of signing (Art. 350).
• The value is negotiable: the law sets no minimum. In practice, you start at 14 days per year (aligned with objective dismissal) and negotiate upwards.
• Unemployment benefit is only granted if the agreement falls within a company reduction or restructuring, under Art. 10 of DL 220/2006. Otherwise you lose both severance and benefit.

What to demand before signing:

1. RP-5044 already filled with the legal motive to declare to Social Security.
2. Detailed final settlement listed separately, not bundled into a general release clause.
3. Never sign the release as "full and general", only "regarding the values received".

Path 5: Expiration (Art. 343)

The contract ends on its own, without either party deciding. Three typical cases:

• End of fixed-term contract that the employer chooses not to renew: you receive 24 days per year of compensation (Art. 344).
• Death of the worker or the individual employer.
• Retirement of the worker due to age or invalidity.
• Subsequent, absolute and definitive impossibility of providing the work or of the employer receiving it.

No notice period. No procedure. The contract simply ends on the planned date.

What you receive:

• Full final settlement.
• 24 days per year of compensation if it is the end of a fixed-term contract decided by the employer.
• Unemployment benefit yes, if expiration is involuntary (end of fixed-term contract, employer retirement).

Quick comparison table

Special cases

Probation period (Art. 114)

During the probation period, either party can end the contract without giving a reason. Notice:

• Up to 60 days: no notice.
• From 60 to 120 days: 7 days notice.
• From 120 days onwards: 15 days notice.

No severance. No disciplinary procedure. Unemployment benefit is possible if the cause is on the company's side and you meet the contributions requirement.

Fixed-term contract (Arts. 343-345)

If the employer chooses not to renew, you must receive:

• 15 days notice before expiration (contracts ≥ 6 months) or 8 days (< 6 months).
• Compensation of 24 days of base salary plus tenure premiums per year (Art. 344).
• Unemployment benefit, if you meet the contributions requirement (360 contributory days in the last 24 months).

If you decide not to renew, you lose the compensation and as a rule the benefit. If you want to leave, it is better not to communicate the refusal to renew and let the employer act first. Employer initiative is what gives you the rights.

Dismissal during sick leave

The rule is: they cannot. The contract is suspended during sick leave (Art. 295) and tenure keeps counting. There are strict exceptions: subjective just cause (something independent of the illness), collective redundancy, post extinction and non-adaptation. All of them with procedure and a heavier burden of proof on the employer.

What to always demand at termination (Art. 341)

Whatever the path, always demand these documents on the termination date. The duty is on the employer.

1. Form RP-5044: declaration for Social Security with the legal motive filled in. Without this, you cannot register for unemployment benefit.
2. Work certificate: dates of admission and termination, duties performed. No value judgements.
3. Declaration for IEFP: when applicable, confirming the termination motive.
4. Detailed quitclaim receipt: salary, proportionals, holidays, severance (if any). Each line separated.

If the company does not deliver, send a registered letter with acknowledgement of receipt demanding it, and in parallel file a complaint with ACT.

Next steps by situation

Just received a disciplinary notice. Read the disciplinary notice guide, prepare your response within the 10 working days and calculate the possible severance to file as a subsidiary claim.

Employer has not paid for 60 days. Go directly to the just cause termination template for unpaid wages. You have 30 days to invoke just cause.

Employer offered a mutual agreement. Read the mutual agreement guide before signing. Confirm the legal motive appears on RP-5044.

Leaving voluntarily. Use the resignation template with the correct notice period. Ask for RP-5044 anyway, it can be useful in the future.

My fixed-term contract ended and the employer did not renew. Calculate the 24-days-per-year compensation and register at IEFP.

I am in probation. Confirm the applicable notice period. If the employer ends the contract without cause, you may qualify for unemployment benefit if you meet the contributions requirement.