New work regime for workers, according to the official project/AFP file
Today the government will officially present the labor reform project that it will submit to Congress for debate in extraordinary sessions: as expected by this newspaper, it envisages a reduction in the calculation basis for remuneration – for example, it will not include vacations or bonuses; the creation of a labor support fund to finance redundancies – which will not be mandatory for companies anyway; the abolition of ultra-activity, which would put an end to the continuity of collective agreements beyond their expiry and end the primacy of conventional bargaining by companies over those of activity.
As part of the second-generation economic reforms, the government has placed on the agenda of extraordinary sessions its Labor Law on “modernization”, a series of measures that modify the old Labor Contract Law by “updating” the regulations in a more flexible sense, thus reducing costs for employers and weakening the relative position of workers in collective bargaining.
The unions of the CGT and especially the two CTAs have been on guard against an offensive that they interpret as a violation of acquired rights and ineffective in achieving the alleged benefits that the government claims in terms of increasing investment and productivity.
Labor reform would first be discussed in the Senate, while the Chamber of Deputies would first prioritize addressing the 2026 budget and the tax innocence law this month. The official project draft:
the most important changes
* Presumption of the existence of an employment contract: In the current original version, “the fact of the provision of services gives rise to the presumption of the existence of an employment contract”, while with the amendment proposed by the Executive, this presumption “does not apply when it concerns work or professional or commercial services or other modalities involving the provision of services without a relationship of dependency and when the receipts or invoices corresponding to these forms of contract are issued.”
* Joint and several liability when engaging third parties: “The workers are considered to be direct employees of those who register the employment relationship, without prejudice to the fact that they were hired with the intention of using their services or transferring them to third parties.”
* Payment in local or foreign currency: The employer has the possibility of remunerating the employee in foreign currency, regardless of the national currency, in the form of benefits in kind, accommodation or food, modalities already included in the current regulation.
* Vacation: “The employer must grant vacation every year in the period from October 1 to April 30 of the following year,” with the exceptions justified by the specifics of the activity. In return, “the start of the leave must be communicated to the employee in writing at least forty-five (45) days in advance, without prejudice to the fact that collective agreements or other agreements signed with the trade union representation in the company may provide for different systems depending on the specifics of each activity.” And “the employer and the employee may agree to divide the vacation time, provided that each of the periods is not less than seven (7) days.”
* Hour bank: “The timetable may be used to balance the longest working day on one day with the shortest working day on another day, provided that the maximum legal weekly working time or the maximum working time set in the applicable specific work regulation, be it the special law and/or the collective agreement, is not exceeded.”
* Termination of the employment contract: Current law stipulates that an employee’s notice period must be three months if they have been with the company for more than 10 years. With the labor reform planned by the government, the notice period for all employees with more than five years of service is two months. The notice period remains if the seniority is less than five years.
* Compensation for termination without good cause: The criterion of payment to the employee of “remuneration equal to ONE (1) month’s salary for each year of service or a fraction of more than THREE (3) months is maintained, using as the basis for calculation the best monthly, normal and usual salary earned in the previous year or during the period of service, whichever is lower.”
However, it clarifies that “non-monthly payment concepts such as additional annual salary, vacation, non-monthly bonuses, etc. have no impact.”
* Compensation for unjustified termination before the expiry of the deadline: According to the government’s labor reform, an employee who is unfairly dismissed before the end of the agreed period can only receive the compensation corresponding to the termination of the contract, but can no longer claim additional amounts of money as compensation, as established by the current regulations.
* Termination fund: “By means of a collective agreement, the parties may replace this compensation system with a fund or an employment termination scheme, the costs of which will be borne by the employer.”
* Employer contributions: Reduction of employer contributions by three points for those who comply with their contributions to the Employment Assistance Fund.
* Parole: “The employment contract for an indefinite period is considered to be concluded on a probationary basis during the first six (6) months of its validity,” which allows termination without compensation during this period. The basic law already provided for the probationary period from 3 to 6 months as a general duration, with the possibility of a collective agreement extension to 8 or 12 months, especially for SMEs.
* Delivery service regime by platforms: It must ensure the “freedom of connection of the delivery person, regardless of the technological platform of the urban courier service”.
* Restriction of ultra-activity of collective agreements: Once the deadline has expired, they remain in effect until a new collective agreement is signed.
* Immunity or union protection: “This protection applies only to lawfully elected union delegates or representatives who hold the positions of the holders.”
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