Transfer of Business – Activities Relying Primarily on Labour
Judgment of the Supreme Court of Justice of 13 May 2026
Case No: 878/24.2T8EVR.E1.S1
The Supreme Court examines a case of “re-internalization” by a municipality of cleaning services previously entrusted to a private company, considering whether or not this constitutes a transfer of business.
The Court of Justice of the European Union has emphasised that the Directive applies to the public sector, but distinguishes between activities that are essentially labour-based and other activities, adding that in labour-intensive sectors, such as cleaning, the identity of the economic entity is not maintained if the bulk of the workforce is not taken on by the alleged transferee.
In this specific case, the Supreme Court of Justice found that the municipality refused to take on any of the employees from the previous cleaning company, having hired entirely new staff (in equal number) and continued the activity without interruption. The Court concluded that the municipality did not acquire an organised set of resources and that the mere continuation of the activity does not amount to a transfer of an undertaking.
Disciplinary Proceedings – Copies of Documents Forming Part of the Proceedings
Judgment of the Lisbon Court of Appeal of 29 April 2026
Case No: 6681/25.5T8LRS-A.L1-4
The judgment examines the alleged invalidity of a disciplinary proceedings on the grounds that the employee was prevented from obtaining copies of or photographing the documents forming part of it.
The Lisbon Court of Appeal held that the refusal to provide copies or permission to photograph documents relating to the disciplinary proceedings does not, in itself, constitute a procedural invalidity that renders the dismissal unlawful; rather, it must be assessed in each specific case whether such a refusal places an excessive burden on and objectively affects the employee’s rights of defence.
The Court held that the exercise of the right of defence is not unduly burdened where all documents relating to the proceedings are made available for consultation – and are in fact examined by the employee –, the employer responds to successive requests for the provision of documents, and the employee defends themselves in detail against each of the allegations made against them.
Termination of an Employment Contract in Relation to Two Legal Systems
Judgment of the Court of Appeal of Porto of 23 April 2026
Case No: 4974/24.8T8MTS.P1
The judgment addresses the issue of the rules applicable to the termination of an employment contract in relation to two legal systems, where the parties have opted for the application of one of them.
In this case, the Portuguese and Swiss legal systems were at issue: the case concerned an employee of Portuguese nationality employed by an employer based in Portugal to work at the employer’s representative office in Switzerland, with the parties having chosen Swiss law as the law governing the employment contract.
Relying on the Rome I Regulation, the case law of the CJEU and previous decisions of the Portuguese courts, the Court of Appeal of Porto classified Article 53 of the Constitution of the Portuguese Republic — which guarantees job security and prohibits dismissals without just cause — as a rule of immediate application and held that the entire Portuguese legal regime governing the termination of employment contracts (mandatory procedure, prohibition of unjustified dismissals, right to compensation and consequences of unlawfulness) constitutes a concrete application of that constitutional principle. The Court further held that Swiss law, by permitting the simple termination of the contract without due process, without requiring a justifiable reason and without compensation, did not ensure the protection of the relevant public interest, as defined by the Portuguese State, thereby necessitating the (immediate) application of Portuguese law.
Applying Portuguese law, the Court concluded that the termination of the contract constituted an individual redundancy, which was declared unlawful due to the absence of the legally required procedure and the failure to pay compensation.
