Portugal’s Not So Perfect Labor Laws and Workers’ Rights

Portugal recently captured global headlines by announcing a change in its labor laws by making it illegal for bosses to contact employees outside work hours. This law was meant to tackle exploitation during the COVID pandemic and strengthen the country’s labor laws. This change sparked the notion that Portugal is a worker safe haven under socialist policies when in fact, this does not represent the whole truth.

When you compare Portuguese labor laws to those in the United States, where workers cannot afford to get sick, Portugal’s laws are there to protect workers. The maximum working week is 40 hours (even though this is often bypassed), workers get 22 working day vacations, as well as 12 public holidays. Full-time workers usually receive a bonus equal to one month’s salary in June and in December. If you are employed in Portugal you have the right to parental leave, regardless of your gender.

But Portugal’s labor laws do not always translate into positive labor conditions. For far too long, Portugal’s work culture has bred a toxic environment, expecting workers to work until late and miss out on time with their families. In fact, Portugal is the top European country where employees are experiencing the most burnout, with Greece and Latvia coming next. Employees work more hours compared to other European countries and the percentage of reporting risk factors affecting mental well-being at work is 38.6%.

One of the causes is that multinationals and huge corporations exploit workers, using loopholes in the law or fully ignoring labor laws to make employees work extra hours, declining their sick leave, and more. While the rhetoric of center-right parties such as the Liberal Initiative (IL) tends to highlight a corrupt state “enriching” itself on the back of citizens, they dismiss the corporate greed that actually leads to unjust work practices and job insecurity for those same citizens.

While more progressive changes to labor laws have been amended within recent years and the law offers a high degree of employment protection under the Portuguese constitution, not everyone is protected equally. Workers face labor market segmentation as employers choose to apply alternative forms of employment such as temporary agency work and independent contractors. These types of employment leave workers in insecure positions, without access to a reliable ongoing income, and impact those most vulnerable in society – particularly immigrants.

In April of 2022, the National Agriculture Confederation (CNA) accused the government of not addressing the issue of the exploitation of migrant agricultural workers in Alentejo. There have been countless reports of migrants without work contracts being exploited for agricultural labor, such as in Odemira. In January of 2022, The Guardian reported that a Nepalese migrant named Sagar picked berries for 16 hours a day in over 37C/100F heat for less than the legal minimum wage in Odemira. They were one of 10,000 migrant workers at risk of exploitation and abuse in Portugal’s $270m soft fruit industry.

It is common that migrant workers in these scenarios are waiting for their salaries, are not allowed to deduct their salary for Social Security (meaning no retirement pensions), and are working in precarious conditions without breaks or sustenance. In 2017, the consultancy Verisk Maplecroft even warned that Portugal was one of the 20 European countries that had increased its risk of modern slavery.

The minimum wage as of January 2022 stands at €705 in Portugal. Time and time again, center-right parties have voted against raising the minimum wage believing that it will make companies fire people. However, in an empirical study on OECD countries, researchers Lim and Kim (2018) found that increases in minimum wages have limited impacts on unemployment rates.

While the fear that small and medium-sized companies cannot afford to pay workers a minimum wage is understandable, this argument is too often made by large corporations. The largest employer in the country, with over 50,000 workers in Portugal, the multinational SONAE’s turnover grew by 4.7% in the first 9 months of 2021, surpassing 5 billion euros. Operational profitability improved by 5.6% to 415 million euros. The CEO of SONAE Claudia Azevedo, received over 1.6 million euros in 2021, while the year before, she received around 1.2 million euros, due to bonuses. Despite this 400,000 euro increase for the CEO, the salaries of most workers remain the same. In fact, the Portuguese government gave SONAE 450,000 euros to help the corporation pay their workers the minimum salary.

While the Socialist Party (PS) plans to increase the minimum salary from €705 to €900 by 2026, other left-wing parties in parliament believe this is too slow of a measure. The Portuguese Communist Party (PCP) believes the country needs a short-term measure, having proposed altering the minimum wage in 2021 to €800 by 2022. The Left Bloc (BE) pushed for a similar but less drastic measure, proposing an increase to €853 by 2024. These fundamental differences between PS and the two left-wing parties eventually led to an early general election being held in January due to a failed state budget proposed by the Socialist Party.

While it is clear the left in Portugal is beyond fragmented and unwilling to work together to fight exploitation under capitalism, the Socialist Party’s majority win will allow the party to pass their state budget. Will the newly appointed center-left government be able to strengthen workers’ rights in Portugal and protect the most vulnerable from precarious working conditions? Only time will tell.