Changes to employment law in wake of COVID-19 pandemic

Bizar Male


On 22 May 2021 Support Decree 1 was converted into law (Law 69/2021) and on 26 May 2021 Support Decree 2 (Law Decree 73/2021) came into force. This article provides a summary of the main provisions relating to employment.

Suspension of dismissals

The suspension of dismissals, both individual and collective, for organisational or economic reasons has been extended until 30 June 2021. From 1 July 2021 to 31 December 2021, the suspension remains in place for employers which benefit from the COVID-19 redundancy funds (CIGs) for the duration of the salary integration granted.

The exceptions to the suspension already provided for (ie, dismissals motivated by the definitive cessation of a company’s activities or bankruptcy, a union agreement providing incentives to terminate an employment relationship or a change of contractor) are confirmed.

Reemployment contracts

On an exceptional basis between 1 July 2021 and 31 October 2021, employers can enter into a new ‘re-employment contract’, defined as an open-ended employment contract aimed at encouraging the inclusion of unemployed employees in the labour market during the resumption of activities period following the COVID-19 pandemic. The contract must be in writing and, as a condition of employment, must be provided to an individual involved in a reskilling project whose duration is six months.

At the end of the reskilling project, the parties may terminate the contract with notice. If neither party terminates the contract, the relationship will continue as an ordinary open-ended employment relationship.

Employers which hire under this kind of contract are entitled to a 100% social security exemption for a maximum of six months and up to €6,000 on an annual basis, provided that they have not made collective or individual dismissals for objective reasons in the same department in the six months preceding the hiring.

Extension and renewal of fixed-term contracts

Without prejudice to the maximum overall duration of 24 months, until 31 December 2021, fixed-term contracts can be renewed or extended once for a maximum of 12 months, without a need to meet the conditions provided for by law (ie, temporary and objective needs which are unrelated to ordinary activities, a need to replace other absent workers or other needs relating to temporary, significant and non-programmable increases in ordinary activity).


Employers which have access to CIGs and which, in the first half of 2021, have suffered a reduction in turnover of more than 50% compared with the first half of 2019 can access the extraordinary redundancy fund for a maximum of 26 weeks (from 26 May 2021 to 31 December 2021), according to the hourly limits provided for by the decree and without additional contributions. To benefit from this fund, employers must have entered into a company collective agreement that provides for the reduction of work activity aimed at maintaining employment levels in the resumption of activities period following the COVID-19 pandemic.

Social contribution exemption

Employers in the tourism, spa and commerce sectors can benefit from an exemption from paying social contributions for up to twice the number of hours of salary integration already enjoyed in January 2021, February 2021 and March 2021. The suspension of dismissal applies to such employers until 31 December 2021. A violation of this provision entails the retroactive revocation of the exemption from paying contributions and renders it impossible to request salary integrations.

The effectiveness of this rule is subject to the European Commission’s authorisation.

Support for employees

Until 30 June 2021, employees who have oncological or immunodeficiency diseases or require life-saving therapies, as well as disabled employees (Law 104/1992), can work remotely from home. Where such employees’ work cannot be performed remotely, their absence from work is equivalent to hospitalisation and is prescribed by the competent health authorities. This period of absence from work cannot be considered for the purposes of the protection period in case of illness provided for by the national labour collective agreements.

Unemployment indemnity

The automatic reduction of, and ordinary requirements for access to, the unemployment indemnity are suspended until 31 December 2021.

Expansion contracts

The statutory numerical requirement for access to expansion contracts has been reduced; such contracts are now also available to companies which employ more than 100 employees (250 or 500 employees was previously required).

An expansion contract is a company collective agreement which allows companies that intend to implement organisational and production changes aimed at technological innovation to execute a plan, agreed at the government level, which may benefit from extraordinary salary integrations and social security exemptions linked to the rebalancing of skills and turnover of the employed population, as provided for in the plan.

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