Cabinet Files the Final Trabalho XXI Text in the Assembleia After 50 Amendments — Fixed-Term Cap Restored to Three Years, Individual Hour Bank Returns at 50 Hours a Week, Father's Birth Leave Doubles to 14 Days, Parental Subsidy Splits at 90% and 100%

The Trabalho XXI labour-reform bill that Cabinet approved on Thursday 14 May and sent to the Assembleia da República is a materially different document from the August 2025 anteprojeto that triggered nine months of Concertação Social and the CGTP general strike now locked for 3 June. The Ministra do Trabalho confirmed after the press briefing that the final text carries more than 50 amendments to the original, with 12 of those amendments sourced from UGT contributions filed during the talks. The headline procedural story — "no agreement, bill goes to parliament anyway" — already filled the morning briefing. The substantive story is what is in the bill that the procedural one obscures.

Fixed-term contracts — the three-year cap restored

The April redraft — the version analysed in our 10 May evening deep dive — dropped the extension of the certain-term cap from 2 to 3 years and the uncertain-term cap from 4 to 5. The final text reverses that climb-down. The certain-term cap returns to three years, the uncertain-term cap to five. Initial contracts can run up to one year. First-time workers, long-term unemployed and retirees join the eligibility list — that grounds expansion was already in April and survives intact. The cap restoration is the single biggest reversal between draft and final, and the single biggest reason UGT did not sign.

Outsourcing freeze — 12-month bar repealed outright

The April draft cut the post-dismissal outsourcing freeze from 12 months to 6. The final text repeals the freeze entirely. The current rule, written into Article 338-A of the Código do Trabalho, prevents firms from contracting external services to perform work whose internal position was extinguished in the previous 12 months by collective or position-suppression dismissal. The Câmara of small and medium employers framed the rule as a brake on specialisation; CGTP framed it as the only legal mitigation against rotating dismissals. The bill carries the government's framing.

Individual hour bank — 50 hours a week, 150 hours a year

The banco de horas grupal stays repealed — that change held from the April draft. The banco de horas individual returns with hard caps: weekly hours can rise to 50 by individual employer-worker agreement, with an annual ceiling of 150 additional hours per worker. Unused credit time at the close of the six-month reference period must be paid out at a 25% premium on hourly base salary. The grupal door stays shut, the individual door reopens with quantitative locks.

Parental leave — 90% for 150 days, 100% for 180 if shared

The clause that shifts the most household-level cash. The initial parental leave can reach 180 days if both parents share an additional 60 days on top of the 120 mandatory days, and the social-security subsidy stays at 100% of reference wages in that scenario. For the 150-day option (the more common one), the subsidy drops to 90% — down from the 100% available under the current sharing rules. Fathers gain 14 consecutive paid days immediately after birth, double the current 7-day window. The breastfeeding dispensa caps at the child's second birthday, with medical certificates required at 12 and 18 months. The 14-day father's leave is the highest-profile item in the UGT-sourced contributions.

Dismissals — compensation range moves to 45–60 days

The compensation calculation basis moves from "30 to 60 days per year" to "45 to 60 days per year" of service. Mandatory reintegration after wrongful dismissal is abolished across all company sizes — not just micro-enterprises as under the current rule and not just SMEs as in the April draft. The reach widens to large employers. Where reinstatement is barred by the court, the 45-day floor applies.

Strike rules — minimum services widen

The bill adds creches, lares, abastecimento alimentar and segurança privada to the list of sectors required to maintain minimum services during strikes. Union activity is restricted in firms without unionised workers — meetings must take place outside working hours. The 3 June CGTP general strike cites the minimum-services widening as one of three structural reasons for the walk-out.

Telework — written-justification rule dropped

Employers no longer must justify in writing the rejection of a telework request. The clause preventing employer-side penalisation of workers who refuse company telework proposals is removed. INE's Q1 2026 LFS read shows 21.1% of the employed population are already using telework with ICT — the regulatory loosening lands on a population that has already absorbed the new working mode.

Caducidade da contratação coletiva — wider path, no arbitration

The bill widens the path for collective conventions to lapse if not renegotiated, removes their application to outsourced workers, and eliminates the arbitration mechanism that has resolved deadlocks under the current Código. CGTP names this clause as the structural reason for the 3 June strike beyond the headline dismissal-and-outsourcing changes.

Parliamentary path

The PSD-CDS-IL bloc carries the bill mathematically; PS and the Bloco vote against; Chega has signalled selective abstentions on the most contested clauses. Specialty-committee work runs through the second half of May. A final-reading vote is unlikely before the 3 June CGTP strike — which is, on the central union's calendar, deliberately timed to land before the bill clears specialty. The 31 May PRR reprogramming deadline is structurally adjacent: any labour-side reform that would qualify for RRF financing has to be on the books before that date or it does not count toward the August execution cliff.

What this means for expats

• Foreign workers on fixed-term contracts: if the bill passes as filed, the cap rises to three years (from two) and the uncertain-term cap to five (from four). Already-signed contracts run under the rules at signature; new contracts after enactment fall under the new caps.
• Foreign-owned firms of any size: the reintegration bar reach is now universal, not SME-only. Wrongful-dismissal litigation calculus changes for every employer.
• Outsourcing-dependent operations: the 12-month freeze after collective dismissal disappears entirely. Restructuring timelines compress to whatever the firm can execute, with no statutory cooling-off.
• Workers with second-child plans: the 150-day parental subsidy at 90% of wages is a real cash-flow change. The 180-day option at 100% requires equal parent-sharing of the extra 60 days, and that is a coordination decision worth running through household payroll well before the leave starts.
• Fathers expecting a child: 14 consecutive paid days immediately after birth is a doubling of the current entitlement, and the change applies as soon as the bill is in force — enactment date will be set during specialty committee.

The political headlines through 3 June will be about whether the bill passes, who supports it, and how big the strike turnout looks. The operational headlines — for anyone employed in or running a business in Portugal — are about which clauses move and where. The eight above are the ones that will reshape the working week.