EurWORK European Observatory of Working Life

Portugal: Self-employed workers

About

Country: 
Portugal
Author: 
Jorge Cabrita, Heloísa Perista, Raquel Rego, Reinhard Naumann
Institution: 
Dinâmia & CESIS

Disclaimer: This information is made available as a service to the public but has not been edited or approved by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

The main characteristics of the self-employment phenomenon in Portugal are the diversity of situations which may be considered as self-employment as well as the complexity of the legal provisions covering this type of employment. Although there is lack of specific research regarding this matter, self-employed workers have been taken into account in recent tripartite agreements, directly or indirectly related to their working conditions. Trade unions seem to be mainly concerned with false forms of self-employment.

1. Legal provisions and social security

Please provide the definition of self-employed workers which is applicable in your country.

In Portugal, the applicable definition of self-employment in the legal provisions regarding labour, income taxation or business is at least void if not non-existent. The income tax code, for instance, provides a definition of ‘business-related and professional income’ which covers the income ‘earned individually through any activity of service supply, including those of scientific, artistic or technical character, independently of its nature, and even if connected with commercial, manufacturing and agricultural activities’.

The code of business law does not provide any clarification about self-employed workers because under the ‘sole partnership company’ [empresa em nome individual] and ‘individual private limited company/establishment’ [estabelecimento individual de responsabilidade limitada] legal statuses it is possible to find employers with several employees but also self-employed workers without employees, who develop their professional activity by themselves.

As for the Labour Code, it covers all the situations of employment contracts not foreseen by the collective agreement instruments. Therefore, all employees legally protected by an employment contract are covered either by a collective agreement or the Labour Code.

The code states that is assumed that an employment contract exists between the parties if, cumulatively:

the work provider belongs to the organisational structure of the organisation supplying the work and carries out the work under the direction of that organisation;

the work is carried out in the organisation supplying the work or in another location under its control, respecting a previously defined schedule;

the work provider is remunerated according to the time spent carrying out the activity or finds him/herself in a situation of economic dependency towards the organisation supplying the work;

the work tools and instruments are essentially supplied by the organisation supplying the work;

the work was provided uninterruptedly over a 90-day period

If the Labour Code and collective agreements cover the situations of subordinate work, self-employed workers (with or without employees) are therefore a category of workers excluded from the protection of labour law. Business law (self-employed with employees) and/or civil law (self-employed which celebrated a services contract with an employer entity) are applied to these workers.

Briefly indicate the main differences, if any, in the social security regime of self-employed workers with no employees compared with: a) employees; b) self-employed with employees.

In Portugal, the mandatory social security regimes are the general regime of social security for employees, the public administration regime, the regime for lawyers and solicitors and the relevant foreign social protection regimes regarding coordination with the Portuguese regimes.

In 1993, decree-law no. 327/93 established that the members of the statutory bodies of collective societies (including all companies and therefore, self-employed workers with employees) should be included within the general regime of social security for employees, although with some differences. At the same time, decree-law no. 328/93 established a new social security regime for independent workers, which aims to provide the right to social security for self-employed individuals. This regime is mandatory for individuals who develop any professional activity without an employment contract or any legal equivalent contract and are, consequently, covered by the social security general regime of employees.

This legal provision sets out the concept of an independent worker, who is an individual who provides fork for other parties, without subordination. Accordingly, non-subordination occurs in at least one of the following situations:

  • When carrying out their work, the worker is able to choose the processes and means to use, as they will be totally or partially their own property;
  • The worker is not obliged to comply to a working time schedule or minimum work periods, unless this is due to the application of legal provisions governing employment;
  • The worker may sub-contract other individuals to substitute himself/herself when carrying out work;
  • The activity of this worker is not integrated in the structure of the production process, the work organisation or the company’s hierarchy;
  • The worker’s activity is a non-core element in the organisation and pursuit of the employer’s objectives.

Where a subordinate type of activity (i.e., employees), covered by the general regime of social security, coexists with a self-employment activity, the workers have the right of exemption from mandatory social security contributions arising from this independent activity.

Social security protection for employees, self-employed workers with employees and self-employed workers without employees

Table 1 - Social security protection for employees, self-employed workers with employees and self-employed workers without employees
Social security type of protection Employees Self-employed workers with employees Self-employed workers without employees (independent workers)
Family expenses Yes Yes Yes
Invalidity Yes Yes Yes
Death Yes Yes Yes
Old age Yes Yes Yes
Maternity Yes Yes Yes, but the maternity protection scheme of the independent workers does not include the allowance corresponding to the five days of paternity leave as well as the allowances for: - leave to care for sick family members; - leave to care for chronically disabled family members; - parental leave; - special absences of grandparents.
Illness Yes Yes Yes, but the allowance is not paid during the first 30 days (waiting period); the grant period corresponds to the number of days mentioned in the certificate of temporary incapacity, up to the limit of 365 days. The compensatory grants regarding the holidays and Christmas allowances (or similar) are not covered by the illness protection scheme for independent workers.
Occupational diseases Yes Yes Yes
Unemployment Yes No No

Source: http:\\www.seg-social.pt

The special regime for independent workers foresees two contribution schemes. A more restricted one, which is mandatory, and which covers maternity, invalidity, old age and death, and another one, which has enhanced coverage and is non-compulsory, which also provides protection in the occurrence of illness, occupational diseases and family related expenses. The contribution rates are of 25.4% of income in the case of the mandatory regime and 32%, including 0.5% specifically to cover the occurrence of occupational disease, if workers decide to belong to the enhanced regime.

In the general regime, the contribution rate is 34.75% (23.75% paid by the employer and 11% by the employee) while the contribution rate for self-employed workers with employees is 31.25% (21.25% paid by the company and 10% by the individual). While employees contribute according to their work-related income, self-employed workers with employees also contribute according to their wage but up to a maximum of 12 times the value of the national minimum wage.

Please indicate the existence of any particular legal forms of employment which cover contractual relationships which are commonly regarded to be mid-way between dependent employment and self-employment (if necessary, see for a longer discussion of the concept the EIRO comparative study ‘Economically dependent workers', employment law and industrial relations’).

In Portugal there are several particular legal forms of employment which cover contractual relationships that are commonly regarded to be mid-way between dependent employment and self-employment. Part of these relationships are more similar to labour contracts (dependent work), others may be considered freelance or service contracts (independent work; see below).

whether they are commonly considered as economically dependent employment;

The most common legal forms of mid-way between dependent employment and self-employment similar to labour contracts are:

  • Home work (trabalho no domicílio): labour contract without legal dependency, common in the shoe and textile industries. Workers receive the materials and transform them at home, being paid according to their output. Home workers are not allowed to subcontract others, but they may receive help from family members. According to labour legislation, their remuneration is calculated according to the collective agreements in the respective industry.
  • Special regime labour contract (‘contrato de trabalho com regime especial’), covering, for instance, domestic and rural workers or professional athletes;
  • Temporary labour contract (‘contrato de trabalho temporário’): Workers hired by Temporary Work Agencies.

There are also legal forms of self-employment that can be seen as independent or semi-independent work (autonomous work only concerned with the accomplishment of certain goals). These legal forms of semi-independent work are commonly used to disguise work relations that are effectively dependent. The reason for this is that employers avoid b social protection expenses and other perceived constraints of labour contracts. These legal forms are named service rendering contract (‘contrato de prestação de serviços’) and they can be applied, not only to individuals, but also to collective entities.

Service contracts for individuals can be of two types:

  • avença (avença means ‘all-inclusive’ or “lump sum contract”) which establishes a work relationship for a certain period, for example in the case of the work of a lawyer for an association or company; and
  • tarefa contract (tarefa means “task”) which establishes the accomplishment of a certain task by a person hired as a freelance co-operator for this specific purpose (for example giving a lecture at a university during a semester).

The content of both of these types of service contracts can vary largely, but they are usually “minimalist” regarding the range of issues they cover, with very few guarantees for the worker.

specify the main features of such forms of employment and whether they enjoy specific social security regime and, if relevant, the basic features of such special regime (please refer this illustration to the answer given to question 1.2 above).

The general social security regime covers the labour contract without legal dependency, the special regime labour contract and the temporary labour contract.

Individuals with a service contract have the same (voluntary) security regime as other independent workers. Since legislation dating from 1998, independent workers who have only one employer can choose whether they pay their contributions to social security under the regime for dependent or independent workers.

indicate any rules which generally apply to this kind of employment as for: a) working time and vacation; b) maternity and parental leave; c) sick pay and leave for sickness

The Labour Code stipulates that general labour legislation applies also to special regimes such as home work, “special regime labour contracts” and temporary agency work, as far as this is compatible with the specific characteristics of each of these types of labour contract.

Services contracts follow the independent work regime, which means that there are regulations regarding working time and vacation, no holiday or Christmas bonuses, no stipulations regarding maternity leaves, no regulation of sick pay and leave for sickness.

2. Recent trends in self-employment with no employees

Please provide data on recent trends in self-employment (since 2000):

Table 2 - Recent trends in self-employment, 2000-2007 (thousands)
  2000 2003 2006 2007*
Men Women Men Women Men Women Men Women
Self-employed (no.) 702.7 468.9 758.3 511.6 672.3 485.3 697.6 485
Self-employed with no employees (no.) 485.0 392.5 514.0 423.9 472.1 408.0 492.3 404.0

Note:*- 2nd quarter of 2007.

Source: National Statistics [INE], Labour Survey.

Taking into account the concepts presently used by the National Statistics is not easy to clearly define the group of self-employed workers in statistical terms. In fact, it is possible to find self-employed workers both in the group of employees and in the group of self-employed workers without employees. This is the case of the so-called independent workers, to whom the criteria that define if they are employees or self-employed workers without employees is the application of the subordination principle. If an independent worker possesses the autonomy to determine the means and processes to work, does not have a fixed working time and his/her remuneration depends on the profit from the sale of products or the suply services ,then he or she is considered to be a self-employed worker without employees. Otherwise, if he or she is subject to the authority and leadership of the company which contracted his/her services, then they are considered to be an employee.

According to Eurostat, in 2002, the percentage of self-employment in Portugal (25%) was significantly above the EU15 average (14%) while the Employment Outlook 2000 (OECD) stated that during the 1990s almost 7% of the Portuguese employees moved into self-employment, and 3% of the unemployed re-entered the labour market through self-employment (see info-update PT0511NU03).

Please report, according to available research and studies,

the distribution of self-employment without employees across sectors and occupations;

whether self-employment without employees has either increased or decreased significantly in recent years (since 2000) in specific:

  • Sectors and activities.
  • Occupations (International Standard Classification of Occupations – ISCO 88, at one digit).
  • and in specific groups of workers defined by:
  • Gender (men/women).
  • Age groups (younger/older; 14-24, 25-54, 55-64; 65 and over).
  • Nationality (nationals/foreign nationals).
  • Other relevant dimensions to be specified.

The available research does not provide information about the distribution of self-employed workers without employees across sectors.

However, according to the data from the Labour Survey, the number of self-employed workers without employees increased between 2000 and 2003, and decreased until 2006. More than 80% of self-employed workers without employees are concentrated in the primary and tertiary sectors (almost 87% in 2006). In fact, the manufacturing sector has been decreasing in size, from about 16% in 2000 to 13.4% in 2006.

In terms of the distribution by gender, the figures show that more than half of self-employed workers are male but that proportion has been slightly decreasing since 2000 (55.3% in 2000, 54.8% in 2003 and 53.6% in 2006).

Table 3 – Self-employed workers without employees by sector, 2000-2006 (thousands)
  2000 2003 2006
  Men Women Total Men Women Total Men Women Total
Agriculture and fishing 206.7 212.5 419.2 229.8 236.4 466.2 211.4 236.4 447.8
Manufacturing, construction, energy and water 114.8 24.9 139.7 114.5 23.3 137.8 99.4 18.3 117.7
Services 163.4 155.1 318.5 169.7 164.1 333.8 161.2 153.2 314.4
Total 485 392.5 877.5 514 423.9 937.9 472.1 408 880.1

Source: National Statistics [INE], Labour Survey.

Based on existing research and studies, please provide any available data on the diffusion and recent trends of:

  • All legal forms of employment indicated in section 1.3 above (contractual relationships mid-way between dependent employment and self-employment and economically dependent employment), specifying whether they concentrate in any sectors and/or occupations.
  • ‘Bogus self-employment’, i.e. formal self-employment which is fraudulently used to disguise contractual relationships which should be properly registered as dependent employment, in order to avoid the protections and costs (both wage and social contributions) connected with the latter, specifying whether it concentrates in any sectors and/or occupations.

According to the Labour Survey data, most self-employed workers with a service contract work in the tertiary sector. Their number has been increasing since 2000. In terms of occupation, while the number of self-employed workers with a services contract in the categories of professionals and service workers increased, and the number has been decreasing in the craft and related trades and elementary occupations.

Table 4 - Employees with service contract (self-employed workers), by sector of activity and occupation (annual values; thousands)
Employees with services supply contract, by sector of activity and occupation (annual values; thousands)
  2000 2003 2006
Sector      
Agriculture § § §
Manufacturing, construction, energy and water 17.4 10.5 12.2
Services 39.8 36.3 50.8
Occupation      
Managers § § §
Professionals 9.8 9.8 17.7
Technicians and associate professionals 9.9 8.5 11.0
Clerks § 5.4 §
Service workers and shop and market sales workers 7.1 5.0 11.3
Skilled agricultural and fishery workers § § §
Craft and related trades workers 11.2 6.7 7.6
Plant and machine operators and assemblers § § §
Elementary occupations 13.1 8.1 8.8
Total 58.6 47.9 64.0

Notes: values calibrated with reference to the independent population estimates calculated from the definitive results of the 2001 Population Census. § - Sampling error higher than 20%; not revealed.

Source: National Statistics (INE), Labour Survey.

3. Collective representation and collective bargaining

NCs are requested to indicate the main collective representation organisations of employed workers with no employees or of the workers with the special contractual relationships illustrated above in section 1.3. In particular, they should provide information on:

The type of associations (trade associations or trade unions).

In 1995 an important research project on independent work presented the results of a survey amongst independent workers in Portugal (Freire, J., 1995). According to this study, 28% of independent workers are affiliated to a professional association. For a certain type of occupational groups, membership of the relevant public professional association (‘ordem’) is a prerequisite for practicing their profession (for example lawyers, physicians, engineers, nurses, etc.).

There is a very large number of associations and unions representing different occupational groups. Neither our research nor the social partners contacted have identified specific organisations representing the groups of semi-independent workers identified above (see section 1.a).

The associational domains of each of such associations: territorial, sectoral, occupational, professional, etc.Membership and membership rates.Any forms of social dialogue or collective bargaining these associations engage in, specifying:

  • The levels at which such activities take place (national, sectoral, territorial, company).
  • The actors they engage in these activities with (public authorities, employers associations, single employers).
  • The topics typically covered by these activities.
  • The typical outcomes of such activities (joint documents and declarations, guidelines, agreements, etc.)
  • A brief description of the content of some (two or three) of the main and most recent of such documents.

4. Employment and working conditions

Wage levels, of self-employed workers without employees compared with the national average.

The existing recent research and studies do not examine the issue of wage levels of self-employed workers.

A research survey on independent workers carried out in 1993 (Freire, J., 1995) found that 19% of respondents earned over 200,000$ (circa €998), i.e., 4.2 times the national minimum wage in that year (47,400$, about €236).

The incidence of low-paid jobs (that is, according to the OECD definition, jobs which pay less than two-third of the median wage) among self-employed workers without employees compared with the national average.

The recent existing research and studies do not examine the issue of wage levels of self-employed workers.

Working hours, of self-employed workers without employees compared with the national average:

  • Average hours actually worked per week.
  • Diffusion of long working hours (more than 10 hours a day).
  • Diffusion of work at unsocial hours (night, weekend).

The Freire study (1995), found that independent workers worked on average nine hours per day. Most survey respondents (77%) declared that they worked eight or more hours per day.

Table 4 - Daily working hours of independent workers
Daily working hours of independent workers
Workplace %
Less than eight hours 23
Eight hours 26
Nine hours 13
10 hours 17
More than 10 hours 21
Total 100

Source: Freire, J. 1995.

Place of work of self-employed workers without employees compared with the national average:

Home/office distribution.

There is no recent data, research or studies examining this matter.

However, the Freire study (1995) found that more than half of the surveyed independent workers carried out their activity at their establishment/store or at home, followed by those working at their clients premises, at their own workshop or being itinerant. Less numerous are those working at their private office (see table 5).

Table 5 - Place of work of independent workers
Place of work of independent workers
Workplace %
Store 29
Home 24
Client premises 18
Itinerant 12
Workshop 12
Office 5
Total 100

Source: Freire, J. 1995.

Exposure to risks and accidents at work of self-employed workers without employees compared with the national average:

Work accident rates.

There is no recent data, research or studies examining this matter.

Health outcomes, work-related health problems and occupational illnesses of self-employed workers without employees compared with national average:

Occupational illness rates.Work intensity and stress at work

There is no recent data, research or studies examining this matter.

Lifelong learning of self-employed workers without employees compared with the national average:

Participation rates in continuous education and training.

The available research, studies and data do not examine this matter.

Work-life balance of self-employed workers without employees compared with the national average:

Presence and take up rates of maternity/parental leave (according to the applicable social security regime).

There is no data on the presence and take up rates of maternity/parental leave.

However, some figures may be given, on the basis of social security statistics, on the number of independent workers benefiting from the maternity allowance (included in the independent workers’ enhanced social security regime): these represent around 4% to 5% of all the maternity allowances granted (general social security regime plus independent worker’s enhanced regime). This percentage slightly decreased from 5.2%, in 2001, to 4.2%, in 2003, increasing again to 4.7% in 2006.

Presence and take up rates of long-term leave (according to the applicable social security regime). If possible, please indicate the reasons for long-term leave.

The available research, studies and data do not examine this matter.

Degree of control of personal working time.

The available research, studies and data do not examine this matter.

Degree of consistency of personal working time with family and social commitments.

The available research, studies and data do not examine this matter.

Job satisfaction of self-employed workers without employees compared with the national average:

Degree of satisfaction with employment conditions.Degree of satisfaction with working conditions.

The existing recent research and studies do not examine the issue of job satisfaction of self-employed workers.

5. The social partners’ positions

In 2003 a research report on precarious work was published (Rosa, M.T.S., 2003). According to this study, the social partners have distinct attitudes towards this subject. Trade unions have criticised the practice of false (and therefore illegal) “independent” work. Independent workers are obliged to submit fiscal receipts which are known as “green receipts”. Therefore dependent workers who are hired as independent workers are generally known as «false green receipts»

By contrast, employers’ associations have stated that temporary agency work and the different forms of self-employment are an important instrument for companies to adapt their employment flow to the market.

Very little or no research seems to have been done on self-employed without employees and it would seem that this group is therefore not in the focus of the social partners’ interest.

The trade union confederation CGTP-IN declares that its member unions only represent employees with legal subordination to an employer. The trade union confederation UGT states that self-employed workers are free to join a trade union, according to its activity, so unions may have independent workers as members. However, UGT stresses that there is no objective (statistical) information on this subject.

Both union confederations were unable to identify collective bargaining covering self-employed workers. (It was not possible to obtain an answer from the employers’ confederations.) However, both stress that some tripartite agreement covers these workers, such as:

  • The Agreement on Security, Hygiene and Safety at Work («Acordo de Segurança, Higiene e Saúde no Trabalho») of 1991, which transposes into the national legal framework the European Directive 89/391/CEE (referred to by CGTP and UGT);
  • The Agreement on Strategic Concertation («Acordo de Concertação Estratégica») 1996-1999, which was not signed by CGTP, which previews the adoption of measures against «bogus self-employment» (referred toby UGT);
  • The Agreement on Employment Politicy, Labour Market, Education and Training («Acordo sobre Política de Emprego, Mercado de Trabalho, Educação e Formação») (referred to by CGTP), which also previews the adoption of measures against the «false green receipts»;
  • The Agreement on Social Protection Modernisation («Acordo sobre a Modernização da Protecção Social») of 2001, which includes the government promise to create a national plan for the prevention of false independent work (referred to by CGTP and UGT);
  • The Agreement on Social Security Reform («Acordo sobre a Reforma da Segurança Social») from 2006, which was not signed by CGTP, in which arrangements were made with regard to social protection that must be adequate to each person’s contribution (referred to by CGTP and UGT).

In terms of legislative regulation and public policies, CGTP-IN declares that the notion of “worker” could also embrace formally independent workers who are economically dependent from an employer. The main concern of this union confederation on this subject is the so-called «false green receipts».

UGT states that false independent work should be transformed into legal labour contracts. UGT also encourages the labour inspection’s activities. This union confederation states that the Labour Code (2003-2004) has introduced a new rule designed to combat false independent work. The Labour Code stipulates that if it is possible to demonstrate an effective economic dependency and subordination of the worker in relation to the contracting entity, the labour relation shall be considered as a labour contract relating to dependent work. Moreover, independent workers who work for only one employer can now choose whether they make their social security contributions as dependent or as independent workers (see above). Finally, UGT declares that, since its last national Congress (2007) it intends to recruit new groups, namely autonomous workers, and to create a specific organisation for them

6. NC Commentary

One of the most important issues one should underline is the scarcity of recent research and studies directly dealing with the issue of self-employed workers and, specifically, their working conditions. Although the theme has been debated by scholars, politicians and trade unionists, the focus is usually on the precariousness (in the general sense of the term) of the false forms of self-employment, the (complex) legal framework (mostly tax issues) and therefore the focus is not on the working conditions of self-employed workers.

It should be underlined that a research project carried out between 1998 and 2000 (see PT0511NU03) found that ‘self-employment may emerge as a possible alternative in (re)integrating into the labour market within the present climate of restrained job creation’. However, it also found out that ‘this new kind of work organisation does not seem to be greatly desired’ as only 17.7% of a group of unemployed people surveyed mentioned self-employment was their occupational aspiration.

Finally, it worth mentioning that one of the main trade union confederations, UGT, has recently considered the possibility of creating a specific organisation for ‘autonomous’ workers.

References

Freire, J.(coord.), O Trabalho Independente em Portugal [Independent Work in Portugal], Centro de Investigação e Estudos de Sociologia, ISCTE, 1995

Perista, H, Cabrita, J., Forms of self-employment in Portugal, EWCO info-update, European Foundation for the Improvement of Living and Working Conditions, /ef/observatories/eurwork/articles/undefined/forms-of-self-employment-in-portugal

Rebelo, G. , Flexibilidade e Diversidade Laboral em Portugal [Labour Flexibility and Diversity in Portugal], Dinâmia, Working Paper nr. 50, 2006.

Available at: http://dinamia.iscte.pt/images/stories/documents/wp50-2006.pdf

Rebelo, G., Trabalho Independente em Portugal – Empreendimento ou risco? [Independent Work in Portugal – Entrepreneurship or Risk?], Dinâmia, Working Paper nr. 32, 2003.

Available at: http://dinamia.iscte.pt/images/stories/documents/wp32-2003.pdf

Rosa, M.T.S. (coord.), Trabalho Precário – Perspectivas de Superação [Precarious Work – Overcome Perspectives], Lisboa, OEFP, 2003.

Websites

http:\\www.seg-social.pt (Portuguese social security website)

Jorge Cabrita, Heloísa Perista, Raquel Rego, Reinhard Naumann, Dinâmia & CESIS