Lay-offs are an unpalatable but inevitable feature of the employment landscape. When the threat of redundancy looms large, employers are bound by strict rules to ensure the retrenchment process is carried out as fairly and openly as possible. These procedural requirements are being fine-tuned across Europe to increase transparency and minimise the impact on employees, while recent case law highlights some of the pitfalls that should be avoided.
In Portugal, Cesar Sa Esteves, of Simmons & Simmons Rebelo de Sousa, reports that the revised Labour Code has streamlined the collective dismissal regime. The procedure comes into play when at least five employees are to be dismissed from a company with more than 50 employees, or at least two from a company with a workforce of less than 50. Collective dismissals are permitted only where a department or division of the company is to be shut down, or if a reduction in personnel is necessary for economic, organisational or technical reasons. Once it becomes clear that redundancies are imminent, the employer must notify the Ministry of Employment and Social Security and the relevant workers’ council or trade union representatives; if there are no representative structures in place, all potentially affected employees must be notified. Detailed information must be provided, including:
