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Employee Rights When an Undertaking is Transferred in Portugal

1. Employee Rights

With regard to the applicable procedure, should there be no WoCo/Union in place, pre-signing or pre-transfer consultation is not required.

However, the transferor and the transferee should inform the employees in writing of the contemplated transaction, its motives as well as any potential legal, economic and social consequences to the employees. TUPE letter should be delivered in writing, in “good time” and prior to the transfer.

2. Requirements for Transferee Party

In principle, should the transfer of business be implemented in accordance with ARD/TUPE regulations, the employment contracts will be automatically transferred and, generally, the employees will not be allowed to oppose it.

Regardless of such right to oppose the transfer, in case one of the forecasted measures to be implemented in connection with the transfer is the relocation of the employees to a new working place, they will be entitled to terminate their employment contracts (with severance pay) should the relocation of the workplace cause any serious harm to the employees.

For more information on these articles or any other issues involving labour and employment matters in Portugal, please contact Morais Leitão, Galvão Teles, Soares da Silva & Associados
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