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A mysterious “service provider”

By 6 Junho, 2022Junho 29th, 2022No Comments

The proposed law on the “Agenda do trabalho digno” (in English, “decent work agenda”) approved by the government and now is in review by the Portuguese Parliament (it is not clear whether there will be a real parliamentary appreciation of such a long and complicated document), contains some innovations whose primary reason for interest lies in the interpretative enigmas they raise.

One of them is located in articles 338-A and 498-A, which are intended to be added to the Portuguese Labour Code. This is a phenomenon covered by the abbreviated name of “outsourcing of services”, which basically consists of the “acquisition of external services from a third party entity”.

Such an expedient is forbidden when it is a question of satisfying needs which have been assured by a worker made redundant due to collective redundancy or dismissal on the grounds of job extinction.

In other words – if we have understood correctly – companies are prevented from replacing jobs with services. A company that has an accountant as an employee, and has eliminated that job from its structure, cannot use an accountancy firm as a replacement.

Is that so?

The second article cited above deals with the possible application of the collective agreement in force in the company acquiring the services to the “service provider”. But who is this figure?

Beforehand, it would appear to be a company, which sends one or more of its employees to provide the “service”. In certain cases, it could be an individual service provider, whether or not they are economically dependent on the beneficiary of the activity.

But the proposal does not distinguish. The ‘service provider’, covered by the collective regulatory instrument applicable to the beneficiary of the activity, is necessarily a ‘natural person’, an individual. It does not matter whether he/she is the ‘third party’ directly providing the service, or whether he/she is employed (perhaps under an employment contract?!) by the company with which the beneficiary of the activity has established a direct relationship. In other words, it could be a “service provider” who is, in reality, a subordinate worker.

The application of that collective regulatory instrument to the ‘service provider’ depends on whether it is ‘more favourable’ to him. It is not entirely clear in relation to what.

It is to be feared that the clarifications required by these texts, among many others, may not come from the scarce parliamentary debate.

António Monteiro Fernandes @ Of Counsel, DCM | Littler