Portugal's Labor Reform at a Crossroads: Government and Businesses Clash Over Political Tactics and Deadlines

Negotiations on Labor Package Intensify

The Portuguese government and social partners are set to resume discussions on the labor reform package on October 8, with the Minister of Labor emphasizing that while negotiations must be deep, they will not be endless. Maria do Rosário Palma Ramalho stated, "We have to give the time that is necessary," but warned against eternalizing the process, as it will eventually move to the Assembly of the Republic as a bill.

CIP Warns Against Using Reform as Bargaining Chip

The Confederation of Portuguese Business (CIP) has strongly cautioned that the labor reform should not be used as a "bargaining chip" for the approval of the State Budget for 2026 (OE2026). Armindo Monteiro, leader of CIP, expressed concerns over political tactics undermining social dialogue, urging for realism and willingness to reach compromises. He highlighted that with proper dialogue, a consensus could lead to legislation better suited for the 21st century.

Key Changes and Concessions in the Reform

In the upcoming meeting, the government will present a revised version of the project, addressing issues such as breastfeeding and gestational grief. Notable concessions include dropping the requirement for a medical certificate before a child turns one year old and extending the father's daily two-hour leave for breastfeeding until the child is two years old, up from the current one-year limit. Additionally, the government aims to clarify provisions on gestational grief, opting not to revoke it but aligning it with existing leave for pregnancy interruption.

Challenges and Opposition from Unions

Reaching an agreement faces significant hurdles, with the CGTP union rejecting the entire labor package and planning a demonstration on October 20. The UGT union, while open to dialogue, has not ruled out a general strike if the government shows intransigence. Mário Mourão of UGT acknowledged some progress but deemed it insufficient, citing proposals that harm workers, such as changes to reinstatement after dismissal, individual hour banks, and work schedules.

Political Reactions and Criticisms

The PS party has called for a "great civic awakening," criticizing the government's draft as a "counter-reform" that offends women, youth, and the vulnerable. Former Secretary of State for Labor Miguel Cabrita labeled it an "account settlement" that increases job precariousness, particularly through changes to fixed-term contracts, which the government wants to extend back to a three-year limit.