Essential Facts About Temporary Contracts in Portugal (2025 Guide)

Temporary contracts represent a significant portion of the Portuguese labor market, but they navigate increasingly tight regulations. Legislation establishes clear limits, which have been subject to significant changes in recent years, particularly with the entry into force of Law 13/2023, known as the Decent Work Agenda. Those working under this regime need to know their fundamental rights and the existing protection mechanisms against precariousness.

The Triangular Nature of Temporary Work in Portugal

Temporary work is distinguished by its peculiar structure. It involves three parties: the worker, the Temporary Work Agency (TWA or ETT), and the User Company where the service is effectively rendered. The temporary worker signs an employment contract with the TWA, which is formally their employer, but performs their duties at the premises and under the direction of another company.

This modality can only be used for specific temporary needs. The legally foreseen situations include replacing absent workers, seasonal peaks in activity, projects with limited duration, or ongoing recruitment processes. The user company cannot resort to this type of contract to satisfy permanent needs—if it does so, it risks seeing the contract automatically converted.

Maximum Duration of a Temporary Employment Contract: The New Limits

The question constantly arises in employment centers and human resources offices. The duration of this contract cannot exceed 2 years (for fixed-term contracts), and it can be renewed up to twice, provided its duration does not exceed 1 year and the initial conditions of the company's temporary need remain.

For temporary work contracts through a TWA, specific rules apply. The temporary worker cannot provide service for more than 4 consecutive years for the same employer (User Company), including in different companies of the group or in companies that have a dominance relationship or common organizational structures. This limit applies even when the worker is transferred through different TWAs or under different contractual modalities.

There are situations with even stricter deadlines: this limit can be six months when there is a vacancy but the recruitment process is already underway, or 12 months in case of an exceptional increase in the company's activity.

How Many Times Can a Temporary Employment Contract Be Renewed?

The 2023 legislative changes brought substantial alterations. The maximum number of renewals for fixed-term temporary employment contracts changed from the current six to four. This reduction aims to combat situations of prolonged precariousness where workers remained in a temporary situation for years through successive renewals.

Each renewal must stay within the established time limits. If a company exceeds the maximum number of permitted renewals, the contract is converted into a permanent, indefinite-term contract if the limit is breached. The conversion is automatic and does not depend on any action by the worker—it operates by force of law.

Companies must pay particular attention to common errors in this matter. Renewing without valid justification, inadvertently exceeding the number of renewals, or failing to respect the minimum intervals between contracts are situations that can lead to automatic conversion into a permanent contract.

The 4-Year Limit: When Multiple Contracts Turn into a Permanent Link

The four-year rule acts as an absolute safeguard against precariousness. After four years of temporary assignments by temporary work agencies or another company of the same group, these companies will be obliged to integrate the workers into their permanent staff.

This mechanism covers complex situations where the worker:

• Changes TWAs but continues to work for the same User Company.

• Is hired directly after a period of temporary assignment.

• Works for different companies within the same business group.

• Alternates between temporary contracts and service provision.

If the maximum duration of a temporary work assignment contract has expired, and until at least one-third of the duration of the terminated contract has passed, a new contract cannot be entered into with the same employer or company of the same group. This mandatory quarantine prevents companies from circumventing legal limits through small intervals between contracts.

When Does a Temporary Contract Automatically Become Permanent?

Several scenarios can trigger automatic conversion into an indefinite-term contract. The most immediate occurs when the worker continues to perform their duties 10 days after the assignment contract ends—they are then considered a permanent employee (with an indefinite-term employment contract) of the user company.

Other situations of automatic conversion include:

• Exceeding the maximum allowed duration (2 or 4 years, depending on the type).

• Exceeding the maximum number of renewals (more than 4).

• Entering into a contract without a valid justification.

• Irregular succession of contracts without respecting the mandatory interval period.

• Hiring through a TWA without a valid license.

• Continuity of functions after the justifying reason ends—if the temporary need ceases to exist, but the worker continues to perform duties, the contract must be converted. The company cannot claim ignorance—the responsibility for controlling these deadlines is theirs.

Full Rights of the Temporary Worker: Salary, Holidays, and Subsidies

A temporary worker is not a second-class worker. The salary must equal the most favorable value between the minimum wage regulated by a collective agreement applicable to the TWA for their functions and the value paid by the User Company for the work performed.

Fundamental rights include:

• Salary equal to or higher than that of permanent workers in equivalent roles.

• Holidays, holiday and Christmas bonuses, as well as other salary supplements paid to the other workers of the user company.

• Access to the same social facilities (canteen, transport, crèche).

• Adequate professional training.

• Protection in occupational safety and health.

• Application of the same rules for working hours and organization of work.

In the first year of the contract, the worker is entitled to 2 working days for each full month of the contract's duration, up to a maximum of 20 working days. In subsequent years, the general rules of 22 annual working days apply.

Does Temporary Work Entitle You to Unemployment Benefits? The 2025 Conditions

The answer is affirmative. A temporary worker has full access to unemployment benefits, provided they meet the general conditions. They must meet the required qualifying period—360 days of work for another person with registered remuneration in the 24 months preceding the date of unemployment.

The value of the benefit in 2025 follows the general rules: the benefit value corresponds to 65% of the reference remuneration, with established minimum and maximum limits. The maximum value is 1,306.25 euros, equivalent to two and a half times the value of the Social Support Index (IAS). In 2025, the IAS value is 522.50 euros.

For workers earning at least the national minimum wage (870 euros in 2025), the unemployment benefit will be, at minimum, 600.88 euros (1.15 times the 2025 IAS value). The duration of the benefit varies according to age and contribution history, ranging from 5 to 18 months.

Temporary workers can also access partial unemployment benefits if they find part-time work while receiving the benefit, provided the new salary is lower than the benefit value they were receiving.

Temporary Contract Termination: Worker Rights and Employer Duties

The termination of a temporary contract is governed by specific rules. At the end of the contract, the worker is entitled to compensation. The compensation due to the worker for the expiration of a fixed or uncertain term contract increases from 18 to 24 days of base salary and seniority pay per complete year of service.

For fixed-term contracts, the employer must communicate non-renewal up to 15 days before the contract end date, while the worker has a deadline of 8 days. Without this communication, the contract is automatically renewed.

In uncertain-term contracts, advance notice periods vary: 7 days' notice if the contract lasted up to six months; 30 days' notice if it lasted between six months and two years; 60 days if the contract lasted for a period exceeding two years.

The worker can unilaterally resign with reduced notice (30 days for contracts exceeding 6 months), without the need for just cause. In case of resignation initiated by the worker, there is no compensation, except if there is just cause (late salaries, harassment, serious violation of contractual conditions).

When to Seek ACT Help: Typical Situations of Abuse

The Authority for Working Conditions (Autoridade para as Condições do Trabalho - ACT) plays a crucial role in inspection. The main inspection actions of this entity include: verifying the existence of valid justifications for hiring; ensuring compliance with the maximum duration limit; guaranteeing that labor rights are respected.

Situations that justify a complaint to the ACT:

• Successive renewals beyond the legal limit.

• Retention in duties after the contract ends without formalization.

• Salary lower than that of permanent workers.

• Use of temporary contracts for permanent needs.

• Non-payment of due compensation.

• Discrimination in access to rights or benefits.

If you feel that your rights as a temporary worker are not being respected, you can contact the ACT to file a complaint or obtain information. The complaint can be made online through the ACT portal, guaranteeing anonymity if requested. Temporary work is among the priority matters for inspection.

FAQ - Frequently Asked Questions about Temporary Contracts

How many temporary contracts can be made with the same company? Up to 4 renewals at most, always respecting the time limit of 2 years for fixed-term contracts or 4 years in total for assignments through TWAs.

How long without a contract to become permanent? After the contract ends, at least 1/3 of the duration of the previous contract must pass before a new temporary contract can be entered into. If the worker continues 10 days after the contract ends, they automatically become permanent.

Does temporary work entitle you to unemployment benefits? Yes, fulfilling 360 days of work in the last 24 months, with a value between €522.50 and €1,306.25 monthly.

How many times can a temporary employment contract be renewed? Maximum of 4 renewals since May 2023, reduced from the previous 6 renewals.

What changed with the new 2023 legislation? Reduction from 6 to 4 renewals, increase in compensation from 18 to 24 days, and mandatory integration after 4 years of temporary assignments.

Useful Resources and Links

Official Consultation Websites:

• ACT Portal - Authority for Working Conditions - Complaints, clarifications, and labor rights inspection.

• IEFP - Institute of Employment and Professional Training - Employment support, training, and insertion programs.

• Segurança Social Direta (Direct Social Security) - Consultation of contributions, benefit requests, and contributory status.

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