Portugal: government prepares a further extension of the simplified short-time working scheme alongside a new economic recovery scheme

During the week of 27 July, Portugal’s Council of Ministers is expected to approve measures from the Economic and Social Stabilisation Programme (PEES), which will entail the introduction of new support schemes, as well as the extension of the current simplified short-time working scheme (c.f. article No. 11985) from its scheduled expiry at the end of July, so that it runs until the end of 2020 and continues to support Portugal’s hardest hit businesses. According to the Portuguese press, several models will likely operate contemporaneously, including the simplified short-time working scheme for businesses that are forced to remain closed, a new scheme (the details of which are not yet known) for firms still seriously affected by the crisis, and a recovery support measure that is set to take effect in August. The scheme envisaged to provide recovery support (which has been revised compared with that presented in April, c.f. article No. 11985) would allow businesses to tie reductions in working time to changes in invoices and orders numbers (the relevant proportions have not yet communicated), so that for between a 40% and 60% reduction in orders, workers will receive, starting in August, at least 83% of their salary level for the time not worked (30% of which is to be paid by the employer, and without social security contributions). For orders reductions exceeding 60%, workers will receive at least 77% (and again 30% of which is to be paid by the employer, and without social security contributions). From October onwards, the percentages rise to 88% and 92% respectively. This scheme was discussed with the social partners in a meeting on 21 July. In addition to these measures, the PEES will provide for an increase in ‘support for vocational training’, and particularly for firms that place their employees on short-time working.