Extension of the scope of the legal regime aimed to detect and recognize the existence of an employment contract

07 / 17 / 2017

Law no. 55/2017, of July 17, has been published today in the Official Gazette, broadening the scope of the law suit of 2013 aimed at recognizing the existence of a labor relationship. Today's law, introduces a second amendment to Law no. 107/2009 of September 14 and a fifth amendment to the Labour Procedure Code (“LPC”), approved by Decree-Law no. 480/99, of November 9.

This Law, which comes into force on August 1, aims to extend this legal framework for preventing the creation of hidden employment relationships. The following amendments are the most relevant:

This regime will apply to all kinds of legal relationships whose activity is rendered in similar conditions to the ones verified in an employment contract (not being limited to the so called “false self-employed workers”)
If the Labour Authorities conclude that there is a situation in which activity is rendered in similar conditions to those verified in an employment contract, the presentation of the facts shall be made before the services of the Public Prosecution existing in the court of the area in which the activity is performed (and no longer in the area of residence of the employee);
The trial hearing begins immediately with the production of the evidence of the case (the previous conciliatory hearing between the parties is abolished);
The sentence issued under this special law suit is communicated by the court to the Labor Authorities and to the Social Security department, envisaging the payment of the social security contributions from the date in which the employment relationship began;
An expeditious legal procedure results in an interim order to suspend the dismissal, following the inspection notice prepared by the Labour Authorities, in case of the existence of evidence of a situation whose activity is rendered in similar conditions to the ones verified in an employment contract, in the following terms: (i) whenever the employee has been dismissed between the date of notification of the employer of the inspection notice of the Labour Authorities and the final decision of the court recognizing the existence of an employment contract, the Public Prosecution’s Office initiates an expeditious legal procedure aimed at suspending the dismissal; and (ii) whenever the Public Prosecutor is aware, by any means, of the existence of dismissal/contract’s termination in a situation in which activity is rendered in similar conditions to those verified in an employment contract, initiates the said expeditious legal procedure;
Consequently, the capacity of the Public Prosecutor's Office to bring proceedings, foreseen in article 5-A of the LPC, is extended regarding the referenced expeditious legal procedure for suspension of dismissal.