UGT Unanimously Rejects Government Labour Reform — PS Also Refuses to Back Trabalho XXI in Parliament

Portugal's UGT, the country's second-largest and traditionally more moderate trade union confederation, voted unanimously on Wednesday to reject the government's sweeping Trabalho XXI labour reform package — dealing a significant blow to Prime Minister Luís Montenegro's flagship employment policy.

Hours later, the PS (Socialist Party) — the largest opposition force — warned that it will not vote for the reform in parliament, further narrowing the government's path to passing the legislation.

What the UGT Decided

Meeting in a special session of its Secretariado Nacional on April 9, the UGT concluded that "conditions for a consensus are not yet met" on the proposed revision of the Labour Code. The union said the current draft does not go far enough to protect workers and called for stronger collective bargaining rights.

However, the UGT stopped short of a full rupture. It signalled that it remains open to continued dialogue at the Concertação Social (the tripartite social consultation body that brings together government, unions, and employers), provided the government makes meaningful concessions.

"The UGT will take this position to the Concertação Social, remaining available for dialogue, but firm in defending fairer, more balanced labour legislation with stronger collective bargaining and stronger unions," the official resolution stated.

Government Says "The Door Is Open"

Speaking at a press conference after the Council of Ministers meeting on Thursday, Presidency Minister António Leitão Amaro said the government had noted the UGT's position and confirmed it was willing to continue negotiating.

"We will await the official UGT position and can affirm that the government has the door open to complete the negotiation," Leitão Amaro said. He clarified that the process remains in the social concertation phase — not yet the parliamentary phase — and that all social partners appear willing to keep talking.

PS Draws a Red Line

The political dynamics shifted further when PS deputy Miguel Cabrita warned that the Socialists "will not count on" PS support to approve the labour reform in the Assembleia da República. The PS holds enough seats to block the legislation if it allies with unions' parliamentary allies, potentially forcing the minority PSD-led government to seek support from Chega or IL — both of which have very different visions of labour market reform.

In contrast, the Iniciativa Liberal (IL) urged the government to bypass the Concertação Social entirely and submit the bill to parliament "without further delays". IL deputy Mariana Leitão argued that "the position of the UGT reveals once again that the Concertação Social no longer represents workers."

The Bigger Picture

The Trabalho XXI package proposes changes to more than 100 articles of the Labour Code. After 53 rounds of negotiation and a general strike organised by the CGTP in December 2025, the most contentious provisions include:

• Extended fixed-term contracts: Maximum duration from 2 years to 3 years, with renewals up to 6 years.
• Easier dismissal rules: Streamlined procedures for terminating underperforming employees.
• Working time flexibility: Expanded use of time banks and annualised hours.
• Gig economy regulation: New framework for platform workers, though unions say it still favours employers.

The CGTP, Portugal's largest and more combative union, has already called a national strike and march on Parliament for April 17. With the UGT now also rejecting the current draft, the government faces opposition from both wings of the labour movement — a rare unified front that significantly complicates its legislative agenda.

What Happens Next

The ball is back in the government's court. If Leitão Amaro's olive branch yields fresh concessions in the Concertação Social, the UGT could yet come on board — potentially splitting the union front. If not, the reform moves to parliament without social partner backing, where it faces a hostile PS, an ambivalent Chega, and pressure from both the left and liberal right to reshape the bill in opposite directions.