2020-06-04
Susana Vieira

3 months have passed since the beginning of the Covid-19 pandemic in Portugal. The state of emergency, declared in 19 March 2020, was followed by the state of public disaster, declared in 3 May 2020. Covid-19 mitigation and containment measures are being progressively lifted. Several new legislation has been enacted and amended in a very short period of time. We hope the following may help you keeping track of the rules applicable to lease agreements.

1. Housing leases

Payment of rents falling due between 1 April 2020 and June 2020 may be deferred by tenants whose households have suffered a significant income reduction (determined pursuant to these rules). Deferred rents must be paid in monthly instalments of not less than 1/12 of the total amount during 1 year as from July 2020, together with the rent of the relevant month.

Tenants must have informed the landlord they wish to make use of these rules in writing at least 5 days before the relevant rent falls due (or until 27 April 2020 for the rent falling due in April).

Alternatively, tenants may file an application with the Portuguese Institute for Housing and Urban Rehabilitation (Instituto da Habitação e da Reabilitação Urbana - IRHU) to obtain an interest-free loan to cover payment of rents falling due during the above-mentioned period. Recent legislation extended the possibility of applying for these loans until 1 September 2020. However, the period of time to which the deferral of rents is applicable was not amended, which is likely to raise some practical issues.

Landlords suffering a significant income reduction arising of the suspension of payment of rents by tenants now permitted, may also apply for an interest-free loan with IRHU to cover income they stop receiving.

2. Commercial leases and shopping centers

Tenants with businesses under lockdown or activity restrictions due to Covid-19 mitigation and containment measures may defer payment of rents falling due between 1 April 2020 and (i) 1 September 2020 or (ii) the first month after lockdown or restrictions are lifted, whichever occurs first. The above mentioned rents must be paid in monthly instalments as from (i) 1 September 2020 or (ii) the end of the first month after lockdown or suspension are lifted, as applicable, prorated in monthly statements until June 2021, together with the rent of the relevant month.

For example, restaurants and shopping centers under lockdown/ activity restrictions were authorized to operate in full as from 1 June 2020 (except in certain geographical areas of the country, where some restrictions remain in force).

Tenants with restaurants or stores in shopping centers may defer payment of rents of April, May and June 2020. The deferred amount must be paid in 12 monthly instalments, beginning in July 2020 and until June 2021.

3. Cessation of lease agreements

Landlords in housing leases cannot terminate the agreements with grounds on delay of the tenants in paying rents falling due in the period specified in section 1 unless such tenants fail to pay the deferred rents as explained above.

Commercial leases and shopping center agreements cannot be terminated, early terminated or otherwise ended and tenants cannot be evicted nor claimed any penalties with grounds on the delayed payment of rents during the period of lockdown or activity restrictions and until the end of the first month after lockdown or restrictions are lifted or 1 September 2020 (as applicable).

However, in case housing or commercial leases or shopping center agreements cease by initiative of tenants, the deferred rents will become immediately due and payable.

In addition to the above, and until 30 September 2020:

  • Effects of early termination of housing and commercial agreements by landlords are suspended;
  • Expiry of housing and commercial agreements at the end of the relevant duration is suspended, unless tenants do not object to cessation of the lease; and
  • Effects of notices preventing automatic prorogation of housing and commercial agreements, as well as and revocation of any such agreements, by landlords are also suspended.

4. Court deadlines and proceedings

Since 3 June 2020, court deadlines and proceedings are, generally, not suspended.

However, actions and special eviction procedures and proceedings for delivery of leased immovable property, in case of the tenant may be placed in a fragile situation due to lack of housing or other social critical reason remain suspended until further legislation is enacted.

Statute of limitation and deadlines for exercising rights in connection with such actions and proceedings also remain suspended. 

After consecutive months of social and economic restraints, due to the health crisis caused by the Covid-19 pandemic, Portugal has gradually returned to normality upon the end of some exceptional measures including, among others, the end of the suspension of the court deadlines.

Law 16/2020 of May 29 establishes the suspension of the court deadlines effective as of 3 June 2020. Consequently, judicial proceedings, which have been stopped since 9 March 2020, will return to their normal course. For example, if, for filing a defense (to be filed within 30 days), a period of 20 days had elapsed on 8 March, the outstanding 10-day period will count from 3 June, which will correspond to the 21st day of the deadline to file the response to the claim. 

As for urgent claims (precautionary measures, insolvencies, and special restructuring procedures), the deadlines are no longer suspended from 7 April 2020; they were suspended between 9 March and 6 April 2020. For these and judicial proceedings in general, the diligences to take place in person will also come back, but with some slight differences.

Final hearings and proceedings involving the hearing of witnesses will take place in person, even though the means of distance communication (teleconference, video call or other equivalent) will be kept as optional, if they are not detrimental. In other proceedings (e.g. preliminary hearings), the means of distance communication will be used as a preferred option (except in cases where their use is not feasible), which would be a welcome measure to be kept in the future.

Some exceptional protective measures will however continue in force, inter alia:

(a)    The suspension of the debtor's filing for insolvency;

(b)    Suspension of actions and special eviction procedures and proceedings for delivery of leased immovable property, in case of tenant's weakness due to lack of housing or other critical reasons; and

(c)    The suspension of acts to be performed in enforcement or insolvency proceedings related to the judicial delivery of the family residence, as well as the suspension, at the request of the recipient, of court sales of property that may cause harm to his/her sustenance, and provided that the suspension does not cause serious or irreparable harm to the other party.

Regarding the measures taken during the state of emergency, you may also see our previous publications, available here.

Under the plan to survey the containment measures associated with the COVID-19 pandemic, the Government approved new measures, among which a new teleworking and work organization regime.

Contrary to the exceptional measures adopted during the state of emergency, where teleworking was made mandatory, it ceases to be compulsory from June 1st, excluding some exceptional cases.

The new rules are as follows:

(i)                   Teleworking can be adopted in accordance with the Labor Code (e.g. by means of a written agreement between the parties);

(ii)                  Teleworking regime remains mandatory when, regardless of the employment relationship and whenever the functions in question allow it, the employee specifically requests it in the following cases:

a)       If the employee is protected by the exceptional immunodeprived and chronically ill legal regime, provided that such situation is certified by a physician;

b)       If the employee is disabled or has a degree of incapacity of 60% or more;

c)        If the employee has a dependent child under the age of 12, or, regardless of age, with a disability or chronic illness, who attends an educational establishment or social equipment to support early childhood or disability, who remains closed by legal or administrative authority determination, considering that the measure only applies to one of the parents, regardless of the number of dependent children or dependents, outside periods of school breaks;

d)       If there is an impossibility of physical spaces and work organization to comply with the guidelines of the Health State Agency (Direção Geral de Saúde) and the Labor State Agency (Autoridade para as Condições de Trabalho), to the strict extent necessary for their fulfilment (e.g. physical distance between employees).

Whenever teleworking is not adopted, specific work organization measures may be implemented:

a)       The adoption of service schedules for employee rotation between the teleworking regime and the usual workplace, which may be daily or weekly; and

b)       Adoption of differentiated entry and exit times, as well as breaks and meals.

The new measures may be applied only if the maximum limits for the normal working period and the right to daily and weekly rest provided for by law or applicable collective agreements are ensured.

The new working time arrangements may be applied by the employer under his power of direction, provided that the applicable legal procedure is respected.

The legal procedure determines that workers and their representative organizations must be consulted and given 7 days' notice (or 3 days in the case of a microenterprise) before the new work organization is implemented (article 217, Labor Code).

In a nutshell: teleworking can remain, under the general rules of the Labor Code, but is no longer compulsory, as it was during the state of emergency, at the peak  of the Covid-19 pandemic.

The Portuguese 2020 Solar Auction Second Public Session was held yesterday with further information on the auction rules and specifications, and confirming the three methods of remuneration (fixed tariff, market scheme and market scheme with storage) announced in the first public session.

The map of the auction with the relevant substations was finally revealed. It comprises 12 lots with a wide capacity range, from 10 MVA to 109 MVA, in a total of 700 MVA, all located in the Alentejo and Algarve regions.

The auction rules, specifications and draft agreements to be executed by the winning bidder were also disclosed to promoters and are now available in the online platform https://leiloes-renovaveis.gov.pt/.

The current lack of grid capacity in the areas subject to this tender and the constrains related to the Covid-19 pandemic outbreak lead to the extension of the post-auction timetable schedule compared to last year’s auction. According to this new schedule, promoters have now 48 months (42 months if the project is not subject to environmental impact assessment) from the award of the grid capacity title to obtain the relevant operation license, instead of the 36 months (or 30 months) initially planned. Awarded projects are expected to reach COD in June 2024.

Promoters may submit their applications from 8 June to 31 July via the online platform, and the bidding phase shall take place by end of August.

Requests for clarification can be submitted by email  to the address jurisolar@dgeg.gov.pt until 3 June at 1:00pm.

You can read more about the solar auction on our paper “The Portuguese 2020 First Solar Auction”, to be updated and complemented with the auction documents soon.

When the COVID-19 pandemic started, several European regulatory authorities took measures aimed at mitigating issues arising from the effects of social distancing and mandatory confinement. After the declaration of the state of emergency in Portugal, for example, we saw  a sharp increase in data volume and a significant change in the profile of data transfers, a trend that stabilized during the current month (see data in respect with April and data in respect with May).

For a better understanding the EU regulators’ market intervention, we analyzed data gathered by Cullen International, comprising a sample of 20 countries, including Germany, Austria, Belgium, Croatia, Denmark, Spain, Finland, France, Greece, Ireland, Italy, Luxembourg, Norway, Poland, the Netherlands, Portugal, the Czech Republic, the United Kingdom, Romania and Switzerland. Intervention was grouped in five different areas: (i) data volume management, (ii) portability, (iii) spectrum, (iv) wholesale prices and (v) other.

Our first conclusion is that, in 40% of the counties (of Belgium, Croatia, Finland, Luxembourg, the Netherlands, and Switzerland), regulators intervened in only one area. In 30% of the sample, there was no intervention. In the remaining countries, Denmark intervened in two, Spain, France, Ireland and Italy intervened in three areas, and the Portuguese regulator worked in four areas.

Interestingly enough, it seems there is no correlation between the intensity of regulatory intervention and the impact of the pandemic in each jurisdiction, which leads to the conclusion that, apparently, different risk awareness lead to different predisposition to intervene.

Measures taken by regulators in telecommunications networks ranged from restrictions to streaming services and suspension of functionalities and/or services (if they required the presence of workers on site), to the suspension of the right of cancellation of contracts. At regulator-operators level, measures varied from the suspension of obligations and licensing procedures to the collection of fees. In addition to these, there have also been some cases of interventions in wholesale prices.

Public intervention in Portugal proved to be the most intense, and in addition to the suspension of administrative procedures (see here the situation of the auction 5G), it focused on data volume management, consumer protection and portability, either directly or indirectly through public awareness campaigns in order to avoid overloading the network infrastructure.

Contact tracing has been a priority for app developers over the past few weeks. Local teams, corporations and governments have put efforts into developing apps that trace proximity between smartphones users, which in this case are potential hubs for contagion. The utility of these apps is that once a member of a community is diagnosed with the virus, the chain of transmission may easily be traced back.

These apps pose questions on how data collected is treated (you can read more on this here) and how efficient the technologies used are. The technologies used by tracing apps range from Bluetooth to geolocation, to newer technologies such as DP-3T (Decentralized Privacy-Preserving Proximity Tracing).

All of these technologies have their perks and challenges. Tracing via Bluetooth, for example, will rely on the power of frequencies transmitted from each smartphone to determine proximity: the closer the smartphone is, the higher should be its signal. In theory, that is, because different models and manufacturers build mobile devices that will measure signal strength differently. The measurement is RSSI (Received Signal Strength Indicator). In case different smartphones receive different RSSI measurements, then the measuring accuracy is compromised.

Not only the measurement of signal strength is a weak link, but for measuring to occur, the Bluetooth-running apps must run permanently, which shortens smartphones’ battery life and will most likely be disabled by manufacturers and/or consumers.

Geolocation, also used by some of these apps, shares a certain level of inaccuracy with Bluetooth technology (BLE). As safe distances between people go, people should distance themselves from others at least two meters, but the most common geolocation technologies used are not accurate enough.

On one hand, GPS, which is the most accurate of all (able to determine location of up to five meters, which is still short), will only be able to track people outdoors, will be troubled by weather-related events and is very energy-consuming.

BLE geolocation, on the other, requires infrastructure for the emitting devices nearby to be precisely located by third parties which is an issue that is also shared by Wi-Fi. Network providers could use network triangulation to locate devices, but this technique lacks accuracy as the number of base stations for triangulation varies.

DP-3T, in its turn, is not different technology-wise. Rather, DP-3T is a response to privacy concerns as it is a decentralized alternative to manual tracing of citizens: it is a privacy-by-design type of tracing, rather than a whole different way of locating devices. DP-3T uses Bluetooth and it reverts the process: if a smartphone has stored a record of any of a diagnosed patient’s ephemeral identifier (EphID), then the app knows that the user has been in contact with an infected user.

CP's new collective agreements were published in the “Boletim do Trabalho e Emprego”. These agreements replace the previous ones signed around 20 years ago. There are two agreements, one for general professional categories, and the other for train drivers. The negotiation was directed by the Labor Law team of Macedo Vitorino & Associados.

The new agreements were concluded by CP and the trade unions representing all the professional categories: SMAQ, SFRCI, FECTRANS/SNTSF, ASSIFECO, SNAQ, ASCEF, SINFB, SINFA, SINAFE, SINDEFER, SNEET.

The general collective agreement was published in the Boletim do Trabalho e Emprego of May 9, and SMAQ collective agreement in the Boletim do Trabalho e Emprego of March 29.

In summary, the new collective agreements include:

(i)     Increases of the base salaries (€15,00 for all employees);

(ii)    Increase of the meal allowance to €7,60;

(iii)   Increase of the seniority benefits to €24,00;

(iv)   Increase of the stopover allowance to 18,5%;

(v)    A driving bonus of €4.91/day paid for 13 months to all operational employees who meet the requirements defined in the respective clause;

(vi)   The posting of a map of stopovers and shifts 15 days in advance, which can however be only 10 days in advance;

(vii)  Supplementary allowance for medical insurance; and

(viii) Health insurance and pre-school allowance.

The signing of the new collective agreements is part of the principle of collective autonomy and the right to collective bargaining, enshrined among the rights, freedoms and guarantees of employees, specifically in no. 3 of article 56 of the Portuguese Constitution.

 

Collective bargaining, which includes the signing of Collective Agreements, allows for the adaptation of labor standards, organization of working time, as well as the regulation of a variety of labor issues that have no provision in labor law, ensuring the adaptability of labor legislation to those specified by companies.

In addition to the various measures that have been adopted in the context of the COVID-19 pandemic, new exceptional measures of a social nature have been published, with a view to broadening the protection granted by the laws in force.

The new law provides for:

(i)             The extension of extraordinary support measures to members of statutory bodies of legal persons with managerial functions, provided that (1) they have employees at their service, (2) they are exclusively covered by the social security system in that capacity, (3) they operate in a single entity and (4) the entity in question had, in the previous year, a turnover of less than  €80,000;

(ii)            The extension of extraordinary support measures to self-employed employees not covered either because they have no contribution obligation or because they do not meet the other requirements for access to support;

(iii)           The definition of a minimum limit of €219.40 for the supports referred to in (i) and (ii);

(iv)           The reduction to 50% of the guarantee periods for cessation of unemployment benefit, with a reduction from 180 to 90 days of work with pay records in the 12 months immediately preceding the date of unemployment and from the current 120 days to 60 days for involuntary unemployment due to the expiry of the fixed-term contract or the termination of the contract at the initiative of the employer during the probation period;

(v)            The elimination of excessive bureaucracy in the procedure of allocation of the social income of insertion, no longer being dependent on the signing of an insertion contract;

(vi)           The creation of an additional support, in the amount of €219.40, for employees with green receipts, namely for those who in the last 12 months have not made contributions, for Social Security, because they are excluded.

The purpose of extending this support is therefore to cover a greater number of employers and employees who were unprotected until now, which is why, on the one hand, access to unemployment benefit has been made easier and, on the other, managers of small businesses can have their pay financed by the government during the first months of the crisis.

In the current context of the Covid-19 pandemic, companies are now questioning what measures may be implemented to prevent the spread of the virus among their employees with a view to a progressive return to their business activity, including whether it is lawful to collect health data from their employees, namely their body temperature.

The Portuguese Data Protection Authority (Comissão Nacional de Proteção de Dados – CNPD) has come forward with guidelines on the collection of employees' health data. CNPD considers that the employer may not collect and record the body temperature of employees, except when using health professionals in the field of occupational medicine and upon prior written justification.

Under the General Data Protection Regulation (GDPR), body temperature falls into one of the special categories of data – health data – subject to enhanced legal protection. GDPR prohibits employers from collecting or recording employees' health data except for the purposes of labor law. The Portuguese Labor Code provides that employers may not demand health data from employees, except when specific requirements related to the nature of the activity so justify and the relevant reasons are provided in writing by the employer. Health data must be provided to a medical professional, who may only inform the employer if the employee is able to perform his/her job.

Based on a literal interpretation of the Portuguese Labor Code, CNPD understands that the legislator has not assigned to the employer a role that is exclusive to health authorities, nor have they assigned such role to employers, which is true. However, it is also true that this rule was not drafted to be applied in exceptional situations, but in a so-called "normal" context of the employment relationship. Consequently, the application of this rule is debatable in the current pandemic scenario.

On this matter, the Portuguese Ministry of Labor has already noted that taking employees' body temperature in the workplace may be feasible in certain circumstances. The Portuguese Government should soon clarify this matter by means of a solution that should present itself proportional to the current pandemic situation, and considering that employers have a duty of care, including the duty to ensure the safety of their employees it the workplace.

GDPR (as a regulation, GDPR must be immediately applied, unlike a directive, that must be implemented by each member state into the national law) provides that the processing of health data is lawful, through a health professional (subject to professional secrecy), if processing is necessary for reasons of public interest in the area of public health, including for monitoring epidemics and their spread, which is certainly the case. This is the lawful basis on which employers will be entitled to take employees' body temperatures (obviously, within certain constraints).

In short, very exceptional situations do demand very exceptional measures.

In times where the need for digital literacy and universal access is more apparent than ever, individuals, companies and the public administration will be pillars of the new Action Plan for Digital Transition (the “Action Plan”) just published by the Portuguese government, as part of a medium term digital strategy for Portugal to be implemented from 2020 to 2023.

Individuals’ digital inclusion is a keystone of the Action Plan, given that one quarter of the Portuguese population has never used the internet, which is significantly above the European average (this is having a negative impact on the student availability for online schooling during the Covid-19 crisis). The new Upskill program will requalify professionals in information and technology-related areas and is expected to allocate a number of requalified persons in companies in need of man work.

The Action Plan also aims to provide intensive training to three thousand participants over six months, in order to respond to the scarcity of IT human resources. The plan should bring at least one million adults into the digital economy, and it is also providing low fare tariffs for internet services. Interesting to see how its implementation will be affected by the ongoing Covid-19 lockdown measures.

As regards companies, territory-specific regulatory sandboxes are expected to be created in a number of Portuguese regions in order to promote research and development and testing of innovative products and solutions. Both +CO3SO Digital, a programme to bring digital entrepreneurship to less populated regions, and E-Residency, an Estonian-inspired virtual citizenship project, will target an international and digitally-inclusive outlook for the Portuguese economy.

Startup Visa, Tech Visa, Sign Up for Portugal and Startup Hub are examples of other company-oriented projects and programmes, specifically targeting the creation of a proper entrepreneurial ecosystem. Portugal is set to invest in the digital transition of businesses.

Public administration will be subject to transformative measures in the most used services by citizens, including the use of cloud computing, digital public services, digitally-enabled schools and internationally accessible public services.

To some extent, we can say that this Action Plan is mostly a repackaging or an extension of existing incentive plans, such as +C03SO, or Startup Visa, focusing on digital transition. It comes along with the 5G auction, set to occur in 2020 (you can read more about the 5G Auction here), to the support the digital transition of Portuguese economy to the digital era.