Portuguese law clearly distinguishes collective dismissal from individual dismissal (for cause attributable to the employee) — these are not two ways of describing the same thing, but two separate legal regimes with different criteria, procedures, and consequences.
Individual dismissal for cause attributable to the employee (“justa causa”)
Governed by Article 351 and following of the Portuguese Labour Code. It applies when there is culpable conduct by the employee that, given its seriousness and consequences, makes it immediately and practically impossible to maintain the employment relationship.
The law gives examples of conduct that may constitute just cause: unlawful disobedience of orders from hierarchical superiors, violation of co-workers’ rights and guarantees, repeatedly provoking conflicts, repeated disregard for the duties of the position, serious harm to the employer’s property interests, false statements to justify absences, unjustified absences reaching 5 consecutive or 10 interspersed days in a calendar year, culpable failure to observe health and safety rules, and violence or insults against a co-worker.
Procedure: individual, directed at a single employee (or several, but for individually attributable reasons, not a shared market/structural cause). Where just cause is actually proven, the dismissal is lawful and there is generally no right to compensation for the termination itself.
Collective dismissal
Governed by Articles 359 to 366 of the Labour Code. It is the termination of employment contracts initiated by the employer for market, structural, or technological reasons (not employee conduct) — namely the closure of one or more sections or an equivalent structure, or a reduction in headcount.
The law only classifies it as “collective” when it covers, simultaneously or successively within a three-month period:
- At least 2 employees, in companies with fewer than 50 employees; or
- At least 5 employees, in companies with 50 or more employees.
Procedure: more formal than the individual route — it involves information-sharing and negotiation with the works council (or, absent one, with trade union representatives), and notification to the competent labour authority (DGERT).
Compensation: an employee covered by a collective dismissal is entitled to compensation equal to 14 days of base pay and seniority payments per full year of service (source: DGERT, the official Portuguese labour relations authority).
Why the distinction matters in practice
Conflating the two regimes has real consequences for both employers and employees: a dismissal treated as “individual” when it actually meets the legal criteria for collective dismissal (by reaching the statutory number of affected employees), but without following the collective procedure, exposes the company to the risk of the dismissal being deemed unlawful. For the employee, knowing which regime applies to their situation is the first step to understanding which rights and deadlines apply.
| Individual dismissal (just cause) | Collective dismissal | |
|---|---|---|
| Grounds | Culpable employee conduct | Market, structural, or technological reasons |
| Number of employees | One (or several, for individual reasons) | Statutory minimum (2 or 5, depending on company size) within a 3-month period |
| Procedure | Individual disciplinary process | Collective information/negotiation + notification to DGERT |
| Compensation | Generally none, if just cause is proven | 14 days of base pay and seniority payments per year of service |
Frequently asked questions
Can a company dismiss several employees individually to avoid the collective regime? The legal classification depends on the law’s objective criteria (grounds and number of employees affected within a 3-month period), not on how the employer labels the process — if the collective dismissal criteria are met, the collective regime applies regardless of what the process is called.
Is dismissal due to job elimination the same as collective dismissal? These are distinct categories within employer-initiated dismissal, each with its own regime — we do not cover job elimination in detail here; each category has specific criteria to confirm with a lawyer.
What compensation does someone dismissed collectively receive? 14 days of base pay and seniority payments per full year of service, according to DGERT — this figure does not automatically apply to an individual dismissal where just cause has been proven.
Official sources
- Labour Code, Article 359 (definition of collective dismissal) — Diário da República, consolidated legislation
- Labour Code, Article 366 (compensation for collective dismissal) — Diário da República, consolidated legislation
- Labour Code, Article 351 (definition of just cause for dismissal) — Diário da República, consolidated legislation
- Collective Dismissals — DGERT (Directorate-General for Employment and Labour Relations)
Contact us
To discuss your specific situation — as an employer or as an employee — you can schedule a consultation with PH Advogados.
