Lay-Off in Portugal Drops Below 4,000 Workers in September, With Half as Many Firms Using It as a Year Ago: What It Means for Your Pay

The number of workers on lay-off in Portugal dropped to 3,756 in September, 12.1 percent fewer than a year earlier and 15.8 percent fewer than in August, according to the monthly Social Security statistics synthesis published on Tuesday by the Labour Ministry's planning office, the Direção-Geral de Coordenação e Planeamento (DGCP, formerly the GEP). The figure counts lay-off payments under the ordinary Labour Code rules.

That is 704 fewer than in August, when the count stood at 4,460, and 519 fewer than in September 2025. ECO, which reported the figures, noted that the monthly drop came after two consecutive months of increases.

Fewer companies, and a shift towards shorter hours

The September payments went to workers at 173 employers, 48 fewer than in August and 180 fewer than a year earlier, so the number of companies using it has roughly halved in a year.

The two forms of lay-off moved in opposite directions:

• Reduced working hours: 1,762 people, up 22.8 percent (327 more) on August but down 26.1 percent (621 fewer) on September 2025.
• Temporary suspension of the contract: 1,994 people, down 34.1 percent (1,031 fewer) on August but up 5.4 percent (102 more) on a year earlier.

The synthesis gives no breakdown by sector or region, and warns that recent months are provisional and may be revised.

The same report gave the figures on foreign nationals' contributions that we reported on Tuesday night.

What lay-off means for your pay

Under articles 298 to 308 of the Labour Code, an employer may cut working hours or suspend contracts temporarily for market, structural or technological reasons, or after a catastrophe, where the measure is essential to keep the company viable and protect jobs. The main rules for the employee are these:

• A minimum monthly income. You are entitled to at least two thirds of your normal gross pay, or the national minimum monthly wage for your normal working hours, whichever is higher (article 305).
• A cap on the top-up. The "compensação retributiva" tops up whatever you still earn to that minimum, but only up to three times the national minimum wage. Social Security pays 70 percent of it and the employer 30 percent, and the employer pays the whole amount to you.
• Training adds a little. If you attend an approved training plan, the employment service pays an extra amount equal to 30 percent of the social support index (IAS), split equally between you and the employer.
• Holidays and Christmas pay. Your holiday entitlement is unaffected, the employer pays holiday pay as normal, and you receive the full Christmas bonus, with Social Security paying an amount equal to half of your lay-off compensation and the employer the rest (article 306).
• Protection from dismissal. During the measure, and for 30 or 60 days afterwards depending on whether it lasted up to or more than six months, the employer may not end your contract, except for fixed-term contracts expiring, the end of a service commission, or dismissal for your own misconduct (article 303).
• Other work is allowed. You may take another paid job, but you must tell your employer within five days, as it can reduce your compensation (articles 304 and 305).

A lay-off must have a set duration of no more than six months, or one year after a catastrophe, and can be extended by up to six months more (article 301). If your employer fails to pay the minimum on time during a reduction in hours, article 305 lets you suspend your contract. If your job ends instead, our explainer on unemployment benefit sets out what Social Security pays.