This type of termination of an employment contract, as set out in article 10-A of DL no. 220/2006 of 3 November, may take place in cases of mutual agreement, as long as there are no situations involving a decrease in the level of employment. but first there are new hires with a view to strengthening the qualifications and technical capacity of companies. In other words, the employer reaches an agreement with the employee regarding his dismissal, but, in return, he will have to fill his job position through a new hire with the same or higher level of educational qualifications.

This legal solution entails advantages and disadvantages. It will be advantageous in cases where the termination of the employment contract cannot fit into a situation of collective dismissal, in cases where there is no just cause for dismissal or even in cases where the employer does not intend to see the job position extinguished. Here, upon termination agreement, the employer will be limited to paying the agreed compensatory amount.

On the other hand, this solution will imply the assumption of legal obligations for the employer, which will be obliged to comply with certain requirements so that the agreement concluded is not considered a willful violation, which could lead to the employer being obliged to the Security Social payment for the period during which the initial unemployment benefit is granted.

Therefore, in accordance with paragraph 2 of article 10.º-A of the aforementioned DL, if the employer intends to conclude this type of agreement, it will have to hire, by the end of the month following the termination of the employment contract, a worker through an open-ended, full-time contract to fill the aforementioned job position, which must necessarily correspond to the exercise of an activity of technical complexity, a high degree of responsibility or that presupposes a special qualification. It should be noted that paragraph 3 of the same article provides that the Social Security Services may inform the service with inspection competence of the Ministry responsible for the labor area, when they detect or suspect legal non-compliance with the provisions of article 10-A of the DL No. 220/2006.

It is also important to note that the granting of unemployment benefit is not only subject to compliance with the obligations inherent to the employer, but also to the exhaustive and cumulative fulfillment of legal requirements by the employee. In this sense, to be entitled to unemployment benefit, the worker must, for example, be a resident in Portugal, have had a job with an employment contract and have become unemployed for reasons beyond their control (involuntary unemployment), have paid into Social Security for at least 360 days in the 24 months immediately preceding the date on which you became unemployed, been registered/looking for a job at the nearest Employment Service and have applied for the benefit within 90 consecutive days (in a row) from the date of unemployment.*

* This article is for informational purposes only and does not preclude the need for
advice from a lawyer.