Sweeping revision of penalties for violating labour laws

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August 1999 saw the publication of legislation that will bring about sweeping changes in the system of penalties imposed in cases of violations of Portugal's labour law. The new system divides violations into categories according to their seriousness, and fines will vary according to whether there is gross neglect or intent, and the size of the enterprise.

Several laws were published in August 1999 that introduce in-depth changes to the system of penalties for non-compliance with labour regulations. One new item of legislation covers the general system of penalties for violations of labour laws (Law 116/99 of August 4) while a number of other laws seek to lend substance to this general system of penalties. Law 116/99 defines the system of penalties to be applied in the event of violations of labour regulations and also covers legal procedures. The other laws define and classify virtually every type of labour-related infringement.

The new system, which had been outlined in the 1996-9 tripartite Strategic Concertation Pact (Acordo de Concertação Estratégica) (PT9802168N), divides violations into "minor", "serious" and "very serious" categories and sets down the amount of the corresponding fines, which vary according to whether there is "gross neglect" or "intent", and the size of the enterprise. Companies are divided into:

• micro-businesses - those that employ fewer than five workers and have an annual turnover of less than EUR 498,795;
• small businesses - those that employ fewer than five workers and have an annual turnover equal to or greater than EUR 498,795, or those that employ up to 49 workers and have an annual turnover of less than EUR 2,493,977;
• medium-sized businesses - those that employ fewer than 50 workers and have an annual turnover equal to or greater than EUR 2,493,977, but less than EUR 9,975,908, or those that employ between 50 and 199 workers and have an annual turnover of less than EUR 9,975,908; and
• large companies - those that employ 200 workers or more, or that have an annual turnover equal to or greater than EUR 9,975,908.

Penalties may be as high as EUR 89,783, in the case of in cases of extremely serious violations committed with intent by large companies, for violation of regulations regarding:

• safety, hygiene and health;
• rights of association, and rights of bodies representing workers and of their members; and
• the right to strike.

The amounts of the penalties are slated to be revised every three years, starting in January 2002, and will be based on the percentage rise in the consumer prices index in the three preceding years.

The General Inspectorate for Labour (Inspecção Geral do Trabalho, IGT) will be charged with conducting the legal proceedings in cases of labour violations, and will be responsible for officially reporting violations and serving notice. It will also be responsible for issuing warnings in cases where the situation at the origin of the violation is correctable and has not led to irreparable damage.

In addition, special emphasis has been placed on suppressing the use of child labour, which will be covered by a stiff penalty scheme for violations and, in certain cases, will warrant criminal liability.