What is the Gradual Recovery Support (“Apoio à retoma progressiva”)?

Companies with a turnover reduction of 25% or more in the month immediately preceding the month in which the initial application for support (or extension) is presented, compared to the same month of the previous year or to 2019, depending on the case, or in relation to the monthly average of the 6 months prior to that period; or for those who started the activity less than 24 months ago, the average between the beginning of the activity and penultimate calendar month prior to the month to which the initial request for support or extension refers, may access the Gradual Recovery Support with a temporary reduction of the normal working period ("NWP") of all or some of its employees.

The temporary reduction of the NWP, per employee, has the following limits:

a) In the case of an employer with a turnover decrease of 25% or more, the reduction of the NWP per employee may be a maximum of 33% from September 2021 onwards;

b) In the case of an employer with a 40 % or more turnover decrease, the reduction of the NWP per employee may be a maximum of 40 % from September 2021 onwards;

c) In the case of an employer with a turnover decrease of 60% or more, the reduction of the NWP per employee may be a maximum of 60% from September 2021 onwards;

In cases where there are turnover decreases ≥ 75%, the reduction of the NWP may be a maximum of 100%, when it covers 75% of the employees at the employer’s service. The reduction in NWP maybe up to a maximum of 75 % when it covers up to all the employees at the employer's service, per establishment. The employer must keep his business running in all establishments, except in situations where the closure of premises and establishments is established by legislative or administrative order issued by a governmental authority, within the scope of the COVID-19 pandemic disease.

For companies in the bar, disco, recreational park, and event supply or staging sectors, the 100% reduction of the NWP can cover all employees. Ordinance no. 166/2021, of 30 July, 2021, determined (with effect as of 1 May 2021) this support can be granted to:

a) "Employers in the bars and nightclubs sector" - those whose main activity is still closed by legal or administrative order since 31 December, 2020 and whose company's Economic Activity Classification ("CAE") is, on that date, one of the following: i) 56302: Bars; ii) 56304: Other drinking establishments without live performances; iii) 56305: Drinking establishments with dancing area;

b) “Employers in the recreational park sector" - those whose main activity has remained closed by legal or administrative order since 31 December, 2020 and whose company's CAE, on that date, is one of the following: i) 93210: Recreational and theme park activities; ii) 93294: Other non-specific recreational and leisure activities;

c) “Employers in the supply or staging of events" - those who perform activities in the supply or staging of events, either in the infrastructure level or in the audiovisual level, according to a sworn statement from a certified accountant attesting to the practice of this activity

The NWP of the members of statutory bodies may be reduced up to the limit of the NWP reduction applicable to their employees, with a maximum limit of 60%.

Employees covered by this measure are entitled to: (i) salary for the hours effectively worked paid by the employer and (ii) compensation for the hours not worked, in the amount of 4/5 of gross normal pay up to three times the national minimum wage (NMW)in August 2021.

The maximum compensation amount is EUR 2,115,00 (3 x national minimum wage), and its calculation basis includes: (i) base salary, (ii) meal allowance when qualified as salary and (iii) bonuses, regular allowances (including shift bonus) and night work, when received for at least 10 months in the period of March 2019 to February 2020.

Employees covered by this measure will always be entitled to a minimum monthly amount of EUR 705.00 and may perform paid activity outside the company (the compensation being reduced accordingly).

Social Security pays 70% of the compensation, being the remaining 30% paid by the company.

If the employee receives a monthly amount lower than his/her gross normal salary, the amount of compensation - paid by social security - is increased to the extent strictly necessary to ensure that remuneration, up to a maximum of a gross normal salary corresponding to EUR 2,115.00.

Bars, other drinking establishments without live shows and establishments with a dancing area that are subject to measures restricting their normal operation may voluntarily decide to close down (article 13 of Decree-Law 119-A/2021, of 22 December). The establishments that decide to close must communicate their decision to the Directorate General of Economic Activities (DGAE), stating the dates on which they will be closed, by 31 December 2021 and, in the following months, by the twentieth of each month, with effect until the end of the respective month. This communication must be authenticated by a sworn statement from a certified accountant (article 14/1). This communication will be made on a monthly basis, not later than 20 March 2022 (article 14/2).

Voluntary closure, implemented under the terms referred to above, is equivalent to closure by legal or administrative order for the purposes of access to support under the COVID-19 pandemic disease (article 15 of Decree-Law 119-A/2021).

The establishments that adopted the decision to close down and wish to resume their activity must communicate their decision to the DGAE (article 16 of Decree-Law 119-A/2021).

 

Until when can Companies benefit from the Gradual Recovery Support?

Regardless of the date of application, Companies can only benefit from this support measure until the end of the month in which, by legislative or administrative order issued by a government authority, there are measures in force restricting economic activities, such as rules on opening hours, occupancy or capacity of establishments or events, as well as limitations on the movement of people within the territory, or conditioning the access of tourists from the main outbound tourist markets, within the scope of the COVID-19 pandemic disease..

 

Companies which have applied to the gradual recovery support are entitled to exemption from the payment of social security contributions?

Micro, small and medium companies benefiting from this measure will also be entitled to a 50% partial exemption from the payment of social security contributions regarding the compensation paid to employees with a reduced working period, with reference to the months in which the Company has benefited from the support.

 

Companies benefiting from the Gradual Recovery Support have the right to a training plan?

Yes, for each month of Gradual Recovery Support with temporary reduction of the NWP, the employer is entitled to a training plan.

The training plan entitles the employee to a scholarship of a maximum of 70% of the Social Support Index (IAS) (EUR307.17) per employee covered, intended for the employer, who is entitled to the amount equivalent to 30% of the IAS, and the employee, who is entitled to the amount equivalent to 40% of the IAS in situations where the employee's gross salary is lower than his normal gross salary, and should:

a) Be implemented in coordination with the employer, being the IEFP, I.P., responsible for its approval, and may be developed at a distance, when possible and the conditions allow it;

b) Contribute to the improvement of the employee’s professional skills, increasing their level of qualification whenever possible, and contribute to increasing the company's competitiveness;

c) Correspond to the training modalities foreseen under the National System of Qualifications;

d) Be implemented outside the effective working hours, as long as within the NWP;

e) Start during the period in which the employer is benefiting from the gradual recovery support;

f) Ensure the attendance of, at least, 50 hours of training per employee in a 30-day period.

The scholarship is borne by IEFP, I.P., and is paid directly to the employer, when applicable, who assumes the responsibility of paying the employee the amount due, according to the number of hours of training effectively attended.

Additionally, during the period of reduction of 100% of the NWP, the employee’s duties which do not imply the effective provision of work are maintained, namely the duty to attend professional training sessions indicated by the employer and the duty to comply with other orders and instructions arising from the power of direction that do not involve the provision of work.

If the training plan approved by the IEFP, I. P. did not start during the period in which the employer benefited from the extraordinary support for the progressive resumption of activity with temporary reduction of NWP due to the suspension of on-site training activities by legislative or administrative determination from a government source, it will start within five working days after the end of the suspension, even if the employer is no longer benefiting from the extraordinary support for the progressive resumption of activity.

In this situation, after presentation of proof of approval of the extraordinary support for gradual resumption by social security, the employer is entitled to an advance payment of 85% of the value of the training grant approved in the application before the start of the training.

 

Can Companies dismiss employees during this support?

During the period of the measure and for a period of 60 or 90 days following its completion, depending on the date the measure comes into force, companies may not terminate employment contracts (or start the correspondent legal procedures) by:

(a) Collective dismissal;

(b) Individual redundancy; and/or

(c) Dismissal for unsuitability.

 

Can companies which have resorted to the lay-off regulated by the Labour Code resort to the Gradual Recovery Support?

Yes. Companies which have resorted to the application of the reduction or suspension measures regulated in the Labour Code (lay-off) and intend to access the Gradual Recovery Support, can do so, without being applied the impediment equivalent to half of the period previously used in the application of those measures.

 

Can companies that have used the simplified support or the new incentive to normalize business activity resort to the gradual recovery support?

Yes, companies that have benefited from the new incentive to normalize business activity or from the simplified support for microenterprises may sequentially benefit from the gradual recovery support in the following situations:

(a) 3 months after the payment of the first instalment of the new incentive to normalize business activity, in the modality equivalent to 2 RMMG paid over 6 months, when the employer benefiting from the new incentive to normalize business activity withdraws from it and subsequently applies for the gradual recovery support; or

(b) Upon termination of the new incentive to normalize business activity or of the simplified support for micro-enterprises’ measures.

 

 

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This information is being updated on a regular basis.

All information contained herein and all opinions expressed are of a general nature and are not intended to substitute recourse to expert legal advice for the resolution of real cases.