DL 115/2023, of 15’Dec – FAQ - Fundos de Compensação

DL 115/2023

With the publication of DL 115/2023, of 15 December, the legal regimes of the Work Compensation Fund (FCT) and the Work Compensation Guarantee Fund (FGCT) are amended.

In particular, with regard to the FCT, the changes are profound, highlighting the definitive cessation of some employer obligations, including the obligation to make contributions to that Fund, the extinction of employers' debts to the FCT, and the amendment of the purposes for which it may be mobilized. As a result of these changes, the Fund will no longer be structured around individualized registration accounts per worker, which will be merged into a single global account per employer.

FAQ

Updates:

14.02.2024 - Added FAQs #2a, #5a, #14a, #14b, #17a
18.11.2024 - Added FAQs #2b, #2c, #5b, #14c to #14h, #17b

#1 – Does DL 115/2023, of 15 December, have an impact on the FCT and its operation?

Yes. DL 115/2023, of 15 December, makes the 3rd amendment to Law 70/2013, amending the legal regime of the FCT, its nature, and purposes. These changes naturally have an impact on the operation of the FCT.

#2 – What are the impacts of DL 115/2023, of 15 December, on the FCT?

The FCT becomes a closed Fund, definitively ceasing both the obligation to register new employers and insert new employment contracts, and the obligation to update existing contracts, as well as the obligation to make contributions to the Fund.
The Fund's purpose of ensuring the reimbursement of up to 50% of the compensation due for termination of employment contracts of workers included in the FCT is maintained, but this purpose is joined by the financing of qualification and certified training for workers, support for workers' housing costs and investments, and support for other investments of mutual interest to employers and workers, particularly canteens and daycare centers.

#2a – The FCT has seen its range of purposes expanded. Can the Fund be mobilized for one of the new purposes before the money is applied for that purpose, or can reimbursement only be requested after the money has been applied?

The Law does not provide for the issue, so the employer will decide whether to advance the amount or wait for reimbursement. The employer must ensure that it is in a position to demonstrate compliance with the Law if required to do so.

#2b – Is it possible to request reimbursement from the FCT for the purpose of 'Financing the qualification and certified training of workers' in relation to training that has not yet occurred, but is merely planned?

There will be a need, at least, for tangible elements that can demonstrate that the reimbursed amount will be invested in providing certified training, so the existence of a properly structured, disclosed, and in-force training plan appears to be a document that allows fulfilling this purpose in case of inspection.

#2c – In reimbursement requests for the purpose of 'Financing the qualification and certified training of workers', can training delivered from what date be included?

Considering that DL 115/2023, of 15 December, entered into force on 1 January 2024, the costs that support the reimbursement requests must relate to dates from that date onward.

#3 – What are the main impacts of DL 115/2023, of 15 December, on the operation of the FCT?

The most significant impacts are, first of all, the end of the registration of new employers and/or new employment contracts, the end of the updating of data and parameters relating to already inserted employment contracts, and the end of the payment of contributions to the Fund.
There are also changes to the reimbursement request process, the conditions imposed on those requests, and the periodicity with which reimbursements are processed.

#4 – Does the money contributed to the FCT in the past cease to be the property of the employers?

No. The money contributed to the FCT continues to be the property of the employers who made contributions to it. However, the balance of each employer will be deducted for debts they have with the FGCT, the amount of which will be transferred to that fund.
The balances transferred from the FGCT to the FCT between 2013 and 2023 will also be returned to the FGCT, deducted from the operational costs borne by the FCT in the same period. This return will imply a decrease in the overall value of the FCT, which will be reflected in the value of the Fund's participation units and, consequently, in the euro value of each employer's global balance.

#5 – Are the individual accounts associated with employment contracts maintained?

No. The individual accounts, referring to each employment contract of each registered worker, will be merged into a single global account per employer.

#5a – The FCT maintains as a purpose the payment of up to half of the compensation that workers are entitled to following the termination of their respective employment contracts. In the past, with individualized registration accounts per worker, the maximum amount the employer could mobilize from the Fund corresponded to the balance of that individual account. With the merger of individual accounts into a single global account per employer (FAQ #5) and taking into account the payment of any debts to the FGCT (FAQ #7), it is no longer possible to determine the amount of contributions made on account of a given employment contract. Therefore, what is the maximum amount the employer can mobilize from the FCT for that purpose?

The merger of individual accounts, combined with the redemption of participation units from the global account to pay any debts to the FGCT, prevents the determination of the value paid on account of each employment contract, so the maximum amount the employer can mobilize from the FCT to pay the compensation due to a worker following the termination of their respective employment contract corresponds to half the value of the compensation to which the worker is entitled.

#5b – Is it possible to request reimbursement from the FCT for the purpose of ensuring the reimbursement of up to 50% of the compensation due for termination of employment contracts of workers included in the FCT in the case of workers whose contracts terminated before 1 January 2024?

This purpose already existed previously, so it is applicable as long as the employer has made contributions in the past, i.e., it is applicable to workers registered in the FCT whose individual account, at the time of the merger of individual accounts, showed a positive balance and whose reimbursement request has not yet been made.

#6 – How will the capital belonging to each employer be represented?

Each employer will hold the number of FCT participation units proportional to the capital held at the time of the merger of individual accounts, deducted for any debts to the FGCT.

#7 – Is the portion of capital belonging to each employer affected by that employer's debts to the FCT?

No. Employers' debts to the FCT are extinguished, including the amounts due and unpaid relating to the month of April 2023. The employer's global balance is only affected by debts they may have with the FGCT.

#8 – Is it no longer possible to issue Payment Documents for the regularization of debts to the FCT?

Yes. Any payment document issued in the future will only contain amounts payable to the FGCT.

#9 – Is it no longer possible to initiate tax enforcement proceedings on account of debts to the FCT?

Yes. Employers' debts to the FCT are extinguished, so there is no longer any reason to initiate tax enforcement proceedings for the coercive collection of amounts due and unpaid to the Fund in the past.

#10 – The FCT now has only outflows of capital. Is the liquidation of the Fund envisaged?

Yes. The operation of the FCT now only considers reimbursements requested by employers for the purposes and objectives provided for in DL 115/2023, of 15 December. The liquidation and extinction of the fund is envisaged, but no date has been set for this.

#11 – What happens to the employer's capital in the event of liquidation and extinction of the FCT?

The amounts that, at the time of the extinction of the FCT, have not been redeemed by the employers or the amounts that, having been the subject of a reimbursement request, prove impossible to transfer, for reasons not attributable to the Fund or its management entity, revert to the FGCT.

#12 – How does the employer know what portion of the Fund it holds?

The number of FCT participation units held by the employer will be available for consultation at any time on the Compensation Funds portal on the Internet at www.fundoscompensacao.pt, as soon as the procedure for merging individual accounts into a single global employer account is completed. The euro value of the employer's global account is, at all times, the result of the product of the number of participation units held and their unit value.

#13 – What is the periodicity of the calculation of the reference value of the participation units and where can that unit value be consulted?

The reference value of the FCT participation units will now be determined once a month and is part of the information contained in the Fund's monthly information leaflet, which, in addition to that value, contains information on the overall value of the fund, its composition, profitability, and risk. The monthly FCT leaflet is published on the Compensation Funds portal at www.FundosCompensacao.pt.

#14 – Do the procedures for reimbursing FCT funds undergo changes with the entry into force of DL 115/2023, of 15 December?

Yes. Until now, the reimbursement request occurred following the termination of an employment contract, and the employer requested from the Fund the return of the balance of the individual account associated with the terminated employment contract, identifying the worker in question. Without prejudice to the possibility for the employer to request from the FCT the reimbursement of funds intended for the payment of compensations due following the termination of their workers' employment contracts, the merger of individual accounts into a single global account and the extension of the purposes for which the Fund is intended mean that the employer must now request reimbursement by amount.

#14a – For the purposes of ‘financing qualification and certified training’ and ‘support for workers' housing costs and investments’, without prejudice to the declaration under honor commitment, is it necessary to present specific data on the application of the money for those purposes? Is there any deadline for using the amount for the indicated purposes? Is there any entity that monitors the allocation of the amounts to the purposes referred to by the company?

Neither does the Law require the presentation of documents proving the use of the mobilized funds for the indicated purposes, nor does it set a deadline for using that amount. However, the employer must gather the elements it deems necessary to, if required, prove the use of the mobilized or to-be-mobilized FCT funds for the purposes provided by law. The monitoring entity for the application of Law No. 70/2013, of 30 August, continues to be the Authority for Working Conditions (article 53).

#14b – For the purpose of ‘financing investments carried out by mutual agreement between employers and workers’ representatives’, can the copy of the agreement entered into with the workers' representative structures, when such structures do not exist, be replaced by mere communication to the workers?

According to the provisions of No. 6 of Article 31º-B of Law 70/2013, ‘if there is no workers' committee, inter-union committees, union committees, and union delegates, the intention to mobilize the amounts existing in the global account by the employer entity is only subject to communication to the workers, with 10 consecutive days' notice in relation to the intended mobilization date’. Nevertheless, the very designation of the purpose – ‘Financing investments carried out by mutual agreement between employers and workers’ – points towards the mobilization in question deserving the agreement of the workers.

Mere communication to the workers is intended for situations of financing housing costs and workers' training, as it is limited to subparagraph c) of No. 3 of Article 31º-B (‘The fulfillment of the duty of consultation and the absence of reasoned opposition or, where applicable, the fulfillment of prior communication to the workers, if the purposes provided for in subparagraphs a) and c) of No. 1 of Article 3 are at stake’). In this context, the mobilization of the FCT for financing investments does not seem to dispense with obtaining the workers' agreement, mere communication to them not being sufficient.

#14c – Does replacing a worker indicated as a beneficiary of the training investment with another, once the initially indicated worker has meanwhile terminated their employment contract or missed the scheduled training, entail any consequences?

There are no consequences for the change, so the worker in question may be replaced or the amount invested for the benefit of the training of other workers; the employer only needs to be in a position to prove what happened, particularly if subject to inspection.

#14d – In the investment made in 'financing the qualification and certified training of workers', and in the case of a joint training action, should the amount corresponding to its cost be distributed proportionally among all beneficiaries?

The amount to be indicated in the file must correspond to the training investment per worker and has no relation to past contribution values; In the case of a joint action, the amount may be distributed proportionally.

#14e – Is it possible to combine the reimbursed FCT balance for the purpose of 'Financing the qualification and certified training of workers' with IEFP support 'training voucher'?

According to its specific regulations, the Training Voucher cannot be granted when the training to be attended is already the subject of public co-financing, nor can it be used by beneficiaries to carry out training required under other public support measures, particularly employment support measures; The reimbursement of employers' global account balances with the FCT cannot be considered public financing or support, as those balances belong to the employers. On the other hand, the regime under Law No. 70/2013, of 30 August, does not contain any obstacles to co-financing training, which is why it seems possible to finance workers' qualification and certified training simultaneously with FCT reimbursements and Training Vouchers.

#14f – What investments may be considered in FCT reimbursement requests for the purpose of 'Supporting other investments carried out by mutual agreement between employers and workers' representative structures'?

One of the purposes of the FCT established by DL No. 115/2023, of 15 December, is 'Supporting other investments carried out by mutual agreement between employers and workers' representative structures, particularly daycare centers and canteens' (Article 2, No. 1 b)). The legislative text provides no other indication or detail, so the only 'clue' the Law leaves is the mention of 'particularly daycare centers and canteens', which has as one possible understanding, 'especially' daycare centers and canteens. The express mention of daycare centers and canteens seems to point towards considering eligible investments with an infrastructural character.

#14g – Can the use of FCT reimbursement for the purpose of 'Financing the qualification and certified training of workers' occur for internal training?

According to the National Qualifications System (DL No. 396/2007, of 31/12), 'certified training' will be the training developed by a certified training entity for that purpose or by a recognized educational establishment by the competent ministries; Qualification is defined as “the formal result of an assessment and validation process proven by a competent body, recognizing that an individual has acquired competencies, in accordance with the established references”; if the training is internal, it must also respect such requirements.

#14h – Can FCT reimbursement for the purpose of 'Financing the qualification and certified training of workers' be used for the benefit of trainees' training (IEFP professional internship)?

The financing of qualification and certified training of workers is only applicable to employment relationships regulated by the Labor Code (CT), approved by Law No. 7/2009, of 12 February, in its current wording, which is why the purpose in question is not applicable to trainees.

#15 – With the merger of individual accounts into a single global account per employer, can the portion held by the employer with the FCT be used for the benefit of any of its workers?

Yes, except if that mobilization is intended for the payment of up to half of the compensation due to a worker following the termination of their employment contract. In that case, the employer may only mobilize the FCT for the payment of those compensations to workers on whose account contributions have been made in the past, i.e., workers registered in the FCT whose individual account, at the time of the merger of individual accounts, showed a positive balance.

#16 – Can the employer request reimbursement of the entire capital held with the FCT at any time?

Until 31.12.2026, the employer may request reimbursement of part or all of the capital it holds with the FCT, provided it is for the purposes provided by law (FAQ #2) and the conditions imposed therein are met (FAQs #15, #17, and #20). Since 31.12.2026 is not defined as the date on which the Fund is extinguished, employers must request reimbursement of the capital by that date, without fail, if the extinction of the FCT occurs earlier.

#17 – Can the employer's capital with the FCT be mobilized as many times as the employer wishes?

No. At the time of the merger of individual accounts, and after the determination and transfer of amounts due to the FGCT (FAQ #4), employers will be grouped into 2 tiers, taking into account the euro value of their respective individual account. Employers whose global balance, in euros, on that date is less than 400,000€, may request their mobilization up to 2 times (regardless of the value of each mobilization). Employers whose global balance is equal to or greater than 400,000€, may request their mobilization up to 4 times.

#17a – If the employer who can mobilize up to 2 times wishes to request reimbursement of 50% of a worker's compensation and later of another worker, does that mean they have exhausted the 2 times/possibilities of mobilization?

Yes.

#17b – Are rejected or invalid reimbursement requests considered for the purposes of counting the maximum number of mobilizations allowed? And are reimbursement requests made for the purpose of ensuring the reimbursement of up to 50% of the compensation due for termination of employment contracts of workers included in the FCT also counted towards that limit?

Rejected or invalid requests are not considered for the limit, so they may be resubmitted. Failed submission attempts are not taken into account; it will always be the tranches (actualized), i.e., the redemptions, and not redemption attempts; requests made for the purpose of “payment of up to 50% of the compensation” are considered for the purposes of that count of the maximum number of mobilizations allowed.

#18 – What happens to the remaining capital of employers who reach the maximum number of mobilizations provided for in DL 115/2023, of 15 December?

Once the maximum number of mobilizations provided for in DL 115/2023, of 15 December, is reached, employers will no longer be able to request reimbursements, even for the purposes provided by law, so the remaining capital will eventually be integrated into the FGCT upon the extinction of the FCT.

#19 – Can a reimbursement request be made with the objective of one or more of the purposes provided for in DL 115/2023, of 15 December, or must a separate request be made for each purpose?

A reimbursement request may include funds intended for one or more of the purposes provided by law, and there are no quantitative limits for the amount to be reimbursed, except, of course, the value of the employer's global balance.

#20 – What are the requirements and conditions for reimbursement requests?

In addition to the conditions related to the period during which they may be requested (FAQ #16) and the number of reimbursements that may be requested (FAQ #17), in the reimbursement request, the employer:

Indicates the amount to be reimbursed and the purpose or purposes for which the reimbursement value is intended;
Regardless of the purpose for which the reimbursement is intended, indicates which workers are the beneficiaries;
When it concerns the financing of qualification and certified training for workers or support for workers' housing costs and investments, declares, under honor commitment, the fulfillment of the duty of consultation and the absence of reasoned opposition or, where applicable, the fulfillment of prior communication to the workers;
When it concerns the financing of other investments of mutual interest to employers and workers, such as canteens or daycare centers, declares, under honor commitment, to have obtained the agreement of the workers' representative structures and uploads a copy of that agreement in the application.

#21 – What does the ‘duty of consultation’ of workers consist of, when the purposes of financing training and qualification or support for housing costs and investments are at stake?

The fulfillment of the duty of consultation is ensured by the employer through consultation of the workers' committee or, in its absence, the inter-union committees, union committees, or union delegates. In the absence of workers' representative structures, the fulfillment of that duty by the employer is ensured through communication to the workers, with 10 consecutive days' notice, of the intention to request the mobilization of a certain amount existing in the global account.

#22 – Can workers oppose the mobilization of all or part of the global account balance?

Yes, except when it concerns reimbursement for the payment of compensation due to workers following the termination of their respective employment contracts. In the remaining cases, the consulted entity (see FAQ #21) has 10 days to oppose the mobilization of the amounts indicated by the employer, but only being able to base the opposition on the use of those amounts for purposes other than those provided by Law or the disregard for the principles of equity and equality of opportunities and treatment.

#23 – Will the Compensation Funds portal have any period of unavailability due to the entry into force of DL 115/2023, of 15 December?

Yes. The merger of individual accounts into a single global account per employer, the return to the FGCT of employers' debts to that Fund who are registered in the FCT, and the transfer of funds from the FCT to strengthen the FGCT will imply limitations to the portal's functionalities from 01.01.2024, maintaining only consultation functions. It is estimated that employers' global accounts will be established and consultable from 15.02.2024.

#24 – Will FCT fund reimbursement requests be possible right from 01.01.2024?

No. Given the change in the Fund's purposes and the conditions imposed on reimbursement requests, the interface for entering reimbursement requests is still under development. On the other hand, the submission of reimbursement requests by employers depends on the completion of the procedure that will culminate in the merger of individual accounts into a single global account per employer. It is estimated that employers may submit reimbursement requests from 15.02.2024.

#25 – With the merger of individual accounts, will the employer be able to consult detailed information per worker?

No. The merger of individual accounts into a single global account per employer will combine into a single account all the balances of all the individual accounts of its workers. From the resulting value, the debts the employer has with the FGCT will be paid. On the other hand, with the transfer of part of the FCT to strengthen the FGCT, the euro countervalue of the subscribed participation units associated with each of the individual accounts will decrease proportionally to the weight of that transfer in the total FCT value. Thus, after these operations, the employer's global balance no longer has any relation to the balance that the individual accounts had prior to their merger. The only balance that will be consultable will be the employer's global account balance, and the movements will record outflows for reimbursement payments. Regarding outflows, the employer may consult the reimbursement requests it has made, with all the details included in them (FAQ #20).

#26 – Does DL 115/2023, of 15 December, amend the operation of the FGCT?

The FGCT remains a mechanism intended to ensure workers' right to the effective receipt of half the value of the compensation due for termination of the employment contract, calculated in accordance with Article 366 of the Labor Code. Nevertheless, there are changes regarding the suspension of registration of new workers and the obligation to pay contributions to the FGCT.

#27 – What changes exist regarding the suspension of registration of new workers and the obligation to pay contributions to the FGCT?

The obligations to admit new workers and pay contributions to the FGCT are suspended during the term of the Medium-Term Agreement for the improvement of incomes, wages, and competitiveness. The changes introduced by DL 115/2023, of 15 December, determine that, after the employer communicates the worker's admission to Social Security, Social Security automatically communicates the worker's adhesion to the FGCT.

#28 – In what way can the worker request from the FGCT the amount corresponding to half of the compensation due for termination of the employment contract, calculated in accordance with Article 366 of the Labor Code, subtracted from the amount already paid by the employer?

Through an application addressed to the FGCT, to the address Av. Manuel da Maia, No. 58, 1049-002 Lisbon or to the email IGFSS-DGF-FGCT@seg-social.pt, which must include, in particular, the identification of the worker and the employer (Names and NISS). The FGCT does not pay any amount whenever the employer has already paid the worker an amount equal to or greater than half of the compensation due for termination of the employment contract calculated in accordance with Article 366 of the Labor Code.
The functionality for submitting an application exclusively online is under development.

#29 – Are all workers covered?

No. Workers whose employment contracts are entered into after the entry into force of Law No. 70/2013, of 30 August, i.e., 1 October 2013, including those entered into after the entry into force of Law No. 13/2023, of 3 April, are covered. Workers with employment contracts of duration equal to or less than two months are excluded, as well as employment relationships with the services referred to in Nos. 1 to 4 of Article 3 of Law No. 12-A/2008, of 27 February, in its current wording, including public institutes under special regime.