The Government has approved a set of extraordinary measures to face the COVID-19 virus pandemic, which include Law Decree No. 10-A/2020 and the Council of Ministers Resolution No. 10-A/2020.
The following rules apply to employees:
- The disease situation is equivalent to prophylactic isolation for 14 days, both for subordinate workers and self-employed ones, provided that it is motivated by situations of serious risk to the public health and decreed by the entities recognized as health authorities. Recognition of sickness benefits is not subject to guarantee terms or waiting periods;
- The situation resulting from the assistance of a child or other dependent on the employee's responsibility in prophylactic isolation for 14 days is considered justified;
- With the exception of periods of school interruptions (e.g. Easter holidays), absences are considered justified, only with loss of rights in relation to retribution, any absences from work motivated by unavoidable assistance to a child or other dependent under 12 years of age, or, with disability or chronic illness, of any age, resulting from suspension of school and extracurricular activities in a school or social support equipment.
Absence must be determined by a health authority, and the worker must report the absence to the employer under article 253 of the Portuguese Labor Code, otherwise the absence is considered unjustified.
- A guarantee of social protection for trainers and trainees is established in the course of training, as well as beneficiaries employed in active employment policies who are prevented from attending training.
Thefollowing rules apply to companies:
- Deferral of tax obligations (e.g. delivery of periodic revenue income statement for the 2019 tax period until July 31, 2020, without any surcharges or penalties);
- Flexibility of VAT payment by companies and self-employed individuals, in a fractional manner and up to six installments;
- Flexibilization of social security contributions, and reduction to 1/3 of the contribution in March, April and May. The remaining amount for the months of April, May and June is settled as of the third quarter of 2020.
- Payment of incentives related to the Portugal 2020 Programme, within 30 days;
- Eligibility of expenses incurred with cancelled international events;
- Promoting an extraordinary financial incentive to ensure the standardisation phase of activity and aimed at supporting businesses in order to prevent the risk of unemployment;
- Creation of a set of credit lines totaling € 3 billion for the most affected sectors (e.g. restaurants, tourism, textile industry, clothing, footwear).
Under the Council of Ministers Resolution 10-A/2020 of 13 March, four extraordinary measures for immediate support for workers and businesses are established.
For that matter, Ordinance No. 71-A/2020 of March 15 was published, which defines and regulates the terms and conditions for the allocation of immediate support of an extraordinary temporary and transitional nature, aimed at employees and employers, in order to maintain jobs and mitigate situations of business crisis. The Ordinance was amended by Ordinance No. 71-A/2020 of March 18.
The measures are as follows:
- Promotion of an exceptional and temporary regime for exemption from the payment of social security contributions;
- Extraordinary support for the maintenance of employment contracts in a situation of business crisis with or without training, with the State paying 70% of 2/3 of the remuneration, up to a limit of 3 RMMG;
- Extraordinary training plan; and
- Creation of an extraordinary financial incentive to ensure the normalization phase of the activity (up to one minimum wage per worker).
These measures apply to private sector employers, including employers in the social sector, and employees at their service, who are in a situation of business crisis.
All the measures mentioned are in force and can be taken advantage of by workers and companies.
The Portuguese Council of Ministers approved a set of extraordinary measures in response to the COVID-19 pandemic, with a view to maintaining jobs.
The extraordinary support measures are:
(i) Extraordinary support for the maintenance of employment contracts in a business crisis situation, with or without training ("Simplified Lay Off");
(ii) The Extraordinary Training Plan;
(iii) Extraordinary financial incentive to support the normalization of the company's activity;
(iv) The temporary exemption form the Employer of the Social Security payroll.
It is considered a situation of corporate crisis:
(i) The total stoppage of the company's or establishment's activity that results from the intermittence or interruption of global supply chains; or
(ii) The abrupt and sharp drop of at least 40% in invoicing, with reference to the same period of 3 months, or, for those who started the activity less than 12 months ago, the average for that period.
The Simplified Lay-off follows the following rules:
(i) The State supports the payment of wages;
(ii) The support translates into the payment of 2/3 of the employee's illiquid remuneration, 70% of which is ensured by Social Security and 30% by the employer.
(iii) The support corresponds to an amount equal to 2/3 of the employee's illiquid remuneration, up to a maximum of three guaranteed minimum monthly salaries;
(iv) The financial support is granted for a period of one month, extendable monthly, up to a maximum limit of six months, only when the company's employees have taken the maximum limit of annual vacation and when the employer has adopted the mechanisms of flexibility of working hours established by law;
(v) the employer benefiting from this measure may entrust the worker with the temporary performance of duties not included in the employment contract, provided that this does not entail a substantial change in the worker's position, and that they are geared to the viability of the undertaking; and
(vi) In order to have access to these measures, the employer must be proven to have the social security and tax situations regularized before the Tax and Customs Authority.
The new measure requires the obligation to inform, in writing, the employees concerned and the foreseeable duration of the interruption of the activity.
The employer also has the duty to hear the union delegates and workers' commissions when they exist, by immediately sending an application to the Social Security Institute, accompanied by the list with the names of the covered workers and their Social Security identification number.
The circumstances are attested by a declaration of the employer together with a certificate from the company's certified accountant, and are then confirmed by the competent State bodies.
The new mechanism can also be complemented with the vocational training component, by adding a training grant of 30% of the Social Support Index (IAS). Half of the value is attributed to the employee and half to the employer, with the costs being borne by the Institute for Employment and Professional Training (IEFP, I.P.)
The diploma was published today in Diário da República and comes into force on March 16.
Following the guidelines of the health authorities and the Portuguese Government regarding the Covid-19 outbreak, Macedo Vitorino will start working remotely from March 16, while maintaining a smaller physical presence in its offices.
The remote desktop systems that we have been using for some time, will allow us to ensure that our work will continue to be done with the quality, effectiveness and proximity that clients expect from us. Our teams will continue working together through remote communication systems.
We will remain in touch with our clients and suppliers through the usual contact emails. We have suspended physical meetings and will be available to meet using remote applications, such as videoconferencing.
We will publish regular newsletters regarding the legal developments resulting from the Covid-19 outbreak and how they will impact on businesses and private individuals and will continue to inform you of other legal developments that may be of interest to your day-to-day basis business.
We will make a status assessment with our lawyers and employees every week to determine the best date of return to our offices.
Together we will be able to contain the spreading of this pandemic.
The Portuguese Government has issued two orders, Order no. 2836-A/2020 and Order no. 2875-A/2020,with guidelines on how employers and employees should act as we face the Covid-19 outbreak.
To private sector employees the following rules apply:
- In case of quarantine by decision of the Portuguese health authorities, due to the danger of contamination, the employee is guaranteed payment at 100% of the salary, from the first day, for 14 days.
- After this period, if the employee remains unfit for work for health reasons, in particular because they have been tested positive for the virus, the rules of sick leave apply: 55% of the reference salary for leave up to 30 days, 60% for leave between 31 and 90 days, 70% for leave between 91 and 365 days and 75% of the reference salary for any leave the lasts more than one year. The sickness benefit is paid from the first day of leave since it is a hospital stay.
- The provisions of the preceding paragraph do not apply to employees for whom it is possible to ensure the use of alternative work arrangements, in particular teleworking, where they will continue to receive their regular salary.
- In the event of a situation in which employees have to leave to provide assistance to children, grandchildren or other household members in prophylactic isolation, the scheme laid down by Portuguese law for these purposes applies.
To civil servants the following rules apply:
- In the event of isolation, which must necessarily be determined by a Portuguese health authority, the civil servant’s absence is considered justified without loss of pay.
- When alternative performance methods and work mechanisms (e.g. telework) are possible, the worker retains his rights as if they were working normally.
- In the event of a situation in which civil servants have to leave to provide assistance to children, grandchildren or other household members in prophylactic isolation, the scheme laid down by Portuguese law for these purposes applies.
There are other differences to note between the two orders: the order regarding the public sector is the most extensive and warns civil servants that they have five working days, from the date of publication, to prepare contingency plans based on the guidelines of the Portuguese General Directorate for Health, in particular with alternative procedures that allow ensuring the normal functioning of each service or establishment. Public services should also consider other measures, such as: (i) reduction or suspension of the public opening hours, (ii) suspension of public events or initiatives, carried out either indoors or in places open to the public and (iii) suspension of face-to-face training activities, giving preference to distance training.
The regime of leave due to prophylactic isolation entered into force, for Portuguese state services and establishments, on March 2 and in the private sector on March 3.
The Government approved at the Council of Ministers the amount of the wage increases for the public administration to be applied in 2020.
Under the Law Decree approved yesterday, civil servants will have a wage increase of 0.3% in 2020.
Workers with salaries up to €683.13 will have a salary increase of €10.
The new increases also apply to workers working in public sector companies, as long as they’re not covered by existing collective labor regulatory instruments.
The new updates are retroactive to 1 January 2020.
Yesterday two new collective agreements were signed for CP employees, one for train drivers and the other for general professional categories, about two decades after the first publication of the previous agreement.
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, and SNEET.
The agreements include, among other benefits, increases of the base salaries, meal allowance, seniority benefits, failure allowance, shift allowance, prevention allowance and driving bonus.
Allowances were also created for certain professional categories, namely for railway workers and train employees.
With regard to the organization of working time, the parties have reached agreement on a number of important issues for improving the balance of workers' private and professional lives, in particular:
- Definition of a minimum rest time at headquarters between services of 14 hours for mobile employees;
- The posting of a map of stopovers and shifts 15 days in advance;
- Duty to inform employees of any changes to schedule and shift maps at least three days in advance, except in unforeseen situations; and
- Prohibition of the imposition of holidays by the company outside the period between May 15 and October 15.
The new collective agreement also establishes the right of employees to 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 workers, specifically in no. 3 of article 56 of the Portuguese Constitution.
New entrants will have access to a bidding phase on their own in the upcoming 5G auction scheduled for April this year. New entrants are reserved one lot in the 900MHz band and three lots in the 1800MHz band, along with national roaming provisions and limitations on the acquisition of certain lots, they are also granted a 25% discount on the final price of that purchased band spectrum. Lastly, in order to smoothen the financial burden that may arise of the auction, bidders for the 700MHz, 900MHz and 3.6GHz bands, are required to pay only 2/3 of the purchased spectrum and defer the remainder over a five-year period.
As Portugal is among the European countries with the lowest number of MNO’s, thus the allocation of rights of use of 5G frequencies by auction, that will take place in April, it is estimated competition will improve, with new business models and market offerings emerging.
The total reservation price for the spectrum auction is of 237,9 million euros.
Restrictions are set to 700MHz and 3,6GHz frequency spectrum acquisition, which guarantees each undertaking is able to acquire the amount of spectrum it needs for the business they intend to develop, stimulating and ensuring the efficient use of spectrum.
For the relevant 5G frequency bands (700MHz and 3,6GHz), the reservation prices were set in line with the average reservation prices from the auctions already held in Europe: to the 700MHz band, 19,20 million euros per lot, in a total of 115,20 million euros; to the 3,6GHz band, which is divided in 40 lots and amounts to a total of 45,7 million euros, with the exception of the restricted use of some lots.
For the remaining bands: 900MHz, 1800MHz, 2,1GHz and 2,6GHz, the values are the same as for the multi-band auction that took place between 2011 and 2012, in which these bands had already been made available.
By the end of 2020 Portugal will have fulfilled the European Commission’s ambition to have at least one city with 5G and, by the end of 2025, the full coverage of 5G communication networks.
According to ANACOM schedule, the consultation on the auction draft regulation shall be concluded within 30 working days, as of 12 February, and the final allocation of the 5G frequency usage rights is expected to occur in August 2020.
MV Conversation with Cláudia Fernandes Martins
Macedo Vitorino’s newest partner reflects on life as a lawyer, balancing the personal and professional, as well as an insight into her newest compliance initiative.
What Cláudia Fernandes Martins truly loves about the profession is how many options you have, both in practice and in terms of continuing to learn and grow as a lawyer. “Being a lawyer gives me a range of different challenges, which truly fits my personality and profile,” she explains. “When I started, I didn’t have a precise idea of what I was getting into, but, fortunately, it hasn’t disappointed!”
As Macedo Vitorino’s newly-elect partner, Cláudia Fernandes Martins is the second female partner at the firm. Her practice focuses on commercial and corporate law, competition law and intellectual property, and she heads up the Privacy and Data Protection department.
Looking back at when she began her studies, partnership wasn’t necessarily the plan. “I really wanted to become a law professor, but when I finished university, we didn’t have the options that are available now, and becoming a lawyer was the natural path to take.”
From theoretical student to practical lawyer
In 2003, after graduating from Lisbon University’s Law School, Cláudia Fernandes Martins joined Macedo Vitorino as a trainee. Completing a Postgraduate Degree in State Aid and Tax Law in 2005 and a Master’s in EU and Competition Law in 2008 focusing on private enforcement, her foundations as a lawyer have always been rooted in the area of competition. “The more I learned and delved into competition, the more I enjoyed it,” she says. “Competition covers such a broad range of topics and interlinks with so many other areas, that’s what keeps me so interested. And I relish that challenge.”
Cláudia Fernandes Martins’ biggest challenge was the switch from a theoretical mindset to a more practical one. “Being theorical is a huge advantage when studying. But when I started practising, I had to become far more practical and conscious of what actually works in reality. Clients want solutions, based on theory of course, but that work in practice and in the real world.”
It was a steep learning curve and Cláudia Fernandes Martins admits you never stop learning. “I’m always thinking about what clients need from us that they can put into practice. It’s a constant balancing act between legal theory and real-world practice.” This is something she notices has changed with the younger generations of lawyers. “They try to give answers and solutions straight away without necessarily taking into account the theory to support them.”
Her advice to the younger generation would be to gain as much practical experience as you can. “Anyone who is going to be dealing with clients day-to-day needs practical experience and to ensure to focus on both the law and the real world, taking both factors into account. I would also advise to grab every opportunity you can with both hands.” As you get older and have families, she explains, your options can become more limited, and your choices at times must be dictated by your personal lives. “The younger generation needs to take full advantage of this time in their lives when they are free to try it all. Study as much as you can, take on those projects that excite you and dedicate yourself to going for your goals.”
Balancing the personal and professional
One thing Cláudia Fernandes Martins has also had to perfect was how to hit the right balance between her professional and personal life, especially with a young family. “The balance has to be looked at every single day. You need to balance the needs of your children with those of your clients, all the while remembering you only have two hands, which sometimes isn’t enough!”
She ensures to keep her personal and profession lives separate, and not to do both at the same time. “When I’m with the children I’m 100% present, so I try not to take much work home. Once they’re asleep, then I can be 100% present for anything I need to finish for my clients.”
While the demands of a young family affect you more physically, now that Cláudia Fernandes Martins’ children are a little older the demands are more mental. “You have to be on alert 24-7 and anticipate: Is everything alright? Is there anything that isn’t apparent, any danger or something flying under the radar? I’m the mother, and my role is to find the solution.”
This is the approach she also applies to clients. “There really are transferable skills from both sides, and I feel I have really grown as a lawyer since being a mother. My maturity and practical side have improved dramatically. With children there’s only so much theory – you have to be hands-on and practical! I want my children to see what I do, how I do it and why I do it. I want to be the best as an example for them, and I want to do the same for my clients.”
Taking clients into the new compliance era
Cláudia Fernandes Martins credits much of her latter career path decisions to her young family. “This is something I’ve heard from other female lawyers, when you have children you gain a new perspective on your personal and professional life.”
When her youngest (four) was born, she remembers being at home reading up on the upcoming GDPR (EU General Data Protection Regulations) and wanting to get involved in what was coming. So as soon as she was back at work she began working on a new project on the GDPR. This led her to spearhead an initiative that has been supporting clients through the GDPR implementation period and beyond, as well as educating them on the power of data and its constant evolution. “This was really a moment of change for me.”
Cláudia Fernandes Martins is now developing another innovative offering for their clients in the area of compliance. “Compliance is integral to so many areas of law, and ever-changing with new rules, best practices and sanctions. We noticed when working day-to-day with clients that many were merely ticking boxes and conducting internal audits and thinking that keeps them compliant,” she explains. “Compliance goes so much deeper than that. Check boxes are no longer enough to keep you safe. So we want to educate and support our clients through every step of their compliance journey and ensure that they are complying 100% in every area of this complex field.”
She gives the example of internal and external audits. Internal audits run the risk of reasoning bias and that’s where things get overlooked or go undetected. This also applies if you are using the same auditing companies year-in year-out. “Clients need fresh, objective eyes to detect any errors or omissions that weren’t found through internal or usual external audits,” she says. “A partner that can help uncover the key issues that haven’t been identified and put clients on the right path in terms of transparency, compliance, ethics, social responsibilities etc – that’s where the added value lies.”
The goal is to make Macedo Vitorino a go-to firm for compliance, in the same way as with Data Protection, and the firm’s newest partner is confident their new product will prove to be the added value that clients are looking for.
This will be the year for 5G licenses in Portugal.
After, in February, the 700MHz band, which is rather relevant for 5G, being cleared of DVB-T, the frequency spectrum shall be auctioned in April 2020 by the Portuguese NRA (ANACOM – initially envisaging regional allotments of the frequency spectrum and 20MHz bands - will be segmented. The auction will not only cover the whole spectrum of frequency – which may advantage when compared with other European Union (“EU”) jurisdictions, currently attributing partial licenses for 5G, and may potentiate investment by operators.
Dividing the spectrum was necessary, according to ANACOM, because each operator has specific needs and different projects for 5G services, and to ensure a more efficient spectrum distribution: the efficient use of the whole frequency spectrum through projects of different sizes is crucial to increase competition between telecommunications players and to reduce costs for end-customers.
The greatest concern revealed by market players in October 2019 consultation by ANACOM was that the frequency spectrum was insufficient to meet all interested operators’ needs. This was, indeed, the reasoning for a dispute concerning a license attributed to Dense Air Limited until 2025 and that was reconfigured and redesigned – but it was not revoked – by ANACOM.
Redefining the spectrum is critical for the success of the bidding process: the spectrum of frequency within which operators may offer 5G network services is limited in size, meaning that sufficiency, on the one hand, and allocation, on the other, to each competing operator is very relevant for current and future outlooks of the telecommunications market.
5G licenses will be awarded in August 2020, after the bidding process comes to an end. Recent numbers on the impact of the 5G network in the Portuguese economy are estimated to reach 3.6 billion Euros in the next ten years.
According to Eurostat, the price of telecommunications in Portugal walks the opposite direction of that of EU’s: in Portugal, prices rose 12% in the last ten years, while in the EU, prices fell approximately 11%; Portugal is the seventh most expensive jurisdiction in the EU; and, in Portugal, prices are 15% to 25% higher than the European average regarding specific services, such as bundle services and internet, respectively.
Until recently, the launching of a public-private partnership (PPP) in Portugal was dependent on the verification of 16 legal requirements, including a cost-benefit analysis for the public sector, a study of the budgetary impact and an adequacy analysis of the partnership duration. Last week, the Portuguese Council of Ministers has enacted new regulation that alters the rules of approval, creation and modification of PPPs, granting the Council of Ministers discretionary powers (i) to define requirements that each partnership should fulfil; (ii) to approve the PPP project team; and to decide on whether to award or not to award the project, once the contracting process has ended.
This regulation also changed several aspect so of the legal framework of PPP, maintaining only two of the existing contractual models from the previous legislation, adding to these a model for the partnerships that do not entail any costs for the awarding public entity.
Although the new regulation will enter into force on the 1st February 2020, it will not impact on the existing PPP, nor in all decisions already taken on any PPP pending awarding procedures (as to these last ones, it is not clear whether the Finance Minister will maintain any awarding powers or those will be transferred to the Council of Ministers).
Finally, it is also worth noting that after these changes the PPP framework will no longer apply to municipalities, autonomous regions and related entities, thus allowing them to create their own PPPs without governmental supervision.