Employers are subject to a wide range of legal obligations in labour matters, and failure to comply may give rise to administrative offence proceedings (processos de contraordenação) brought by the Authority for Working Conditions (Autoridade para as Condições do Trabalho, ACT), with fines that vary significantly according to the seriousness of the offence and the size of the company. This article forms part of the Administrative Offences area of Araújo & Associados.
The role of the Authority for Working Conditions
The ACT is the body responsible for monitoring compliance with labour legislation in Portugal, and is responsible for investigating and conducting labour administrative offence proceedings and for imposing the respective fines at first instance. Labour administrative offences are governed by the Labour Code, with subsidiary application of the General Administrative Offences Regime, approved by Decree-Law No. 433/82.
Classification of labour offences – minor, serious and very serious
The Labour Code classifies labour administrative offences into three levels of seriousness – minor, serious and very serious – and this classification is, as a rule, expressly stated in the legal provision that establishes and punishes each specific offence. Each level of seriousness carries a variable range of fines, pursuant to Article 554 of the Labour Code, examples of very serious offences being the breach of rules on the work of minors, on health and safety at work, on the rights of workers’ collective representation bodies, and on the right to strike – matters that the law considers deserving of reinforced protection, to the point of doubling the maximum fines applicable, pursuant to Article 556 of the Labour Code.
How the amount of the fine is calculated
The amount of the fine applicable to a labour administrative offence depends on three essential factors: the level of seriousness of the offence (minor, serious or very serious); the turnover of the offending company, as a rule reported to the calendar year preceding the one in which the offence was committed; and the offender’s degree of fault – negligence or intent, with fines for intentional conduct being considerably higher than those for negligence. Fines are set in Units of Account (Unidades de Conta, UC), whose current value is 102 euros, with the applicable minimum and maximum amounts ranging from a few hundred euros, for minor offences committed by small companies, to several tens of thousands of euros, for very serious offences committed by larger companies, and in the cases of doubling provided for in Article 556 they can reach particularly high amounts.
Most common labour offences
Among the labour offences most frequently investigated by the ACT are, by way of example: failure to enter into a written employment contract, where required by law; the use of false service provision arrangements to disguise genuine employment relationships, expressly classified as a very serious offence by Article 12 of the Labour Code; failure to comply with health and safety at work obligations, also governed by Law No. 102/2009 of 10 September; situations of workplace harassment, which the case law has classified as a very serious offence; and failure to comply with obligations relating to the timely payment of remuneration.
Ancillary sanctions
In addition to the fine, the law provides for the possibility of imposing ancillary sanctions in certain more serious labour administrative offences, notably the publicity of the conviction – making the decision imposing the sanction public, with the resulting reputational impact for the company. The application of these ancillary sanctions depends on the conditions legally provided for each specific situation.
Labour offences and other related matters
As in the other areas of administrative offences, the ACT decision imposing a fine may be challenged in court, with the assessment of the case being transferred to the court competent in labour matters, under the general rules described in the article Appeal against an administrative offence decision – time limits and challenge procedure.
About Araújo & Associados
Established in 1980, with offices in Porto and Lisbon, Araújo & Associados provides legal advice to employers in labour administrative offence proceedings brought by the ACT, in Portuguese, English, French, German and Spanish.
Frequently asked questions about labour offences
Who monitors companies' compliance with their labour obligations?
The Authority for Working Conditions (ACT) is the body responsible for monitoring, investigating and imposing fines at first instance in labour administrative offence proceedings.
How is the amount of a labour fine calculated?
It depends on the level of seriousness of the offence (minor, serious or very serious), the turnover of the offending company, and the degree of fault (negligence or intent), with fines being set in Units of Account, currently worth 102 euros each.
Is hiring a worker as a "service provider" when in practice there is an employment relationship an offence?
Yes. The use of false service provision arrangements to disguise genuine employment relationships is expressly classified as a very serious offence by Article 12 of the Labour Code.
Are fines for breaching health and safety at work rules higher than others?
Yes, as a rule. Offences relating to health and safety at work are among the matters for which the maximum fines are doubled, pursuant to Article 556 of the Labour Code.
Can a company be publicly identified for having been convicted of a labour offence?
In certain conditions, yes. The law provides for the possibility of imposing the ancillary sanction of publicity of the conviction in certain more serious labour offences.
Can I react to a fine imposed by the ACT?
Yes, by challenging the decision in court, within the applicable legal time limit, with the assessment of the case being transferred to the competent court.
Contact us
For more information on labour administrative offences, or to book a legal consultation, you can contact us through our Porto or Lisbon offices, by telephone, email or via the form on the website. We provide legal advice in Portuguese, English, French, German and Spanish.