WHAT IS THE WORK COMPENSATION GUARANTEE FUND? The Labour Compensation Guarantee Fund (FGCT) is an autonomous fund with legal personality, of a mutual nature, and is managed by a management board.

WHAT IS THE GENERAL ENTITY OF THE FGCT? The managing body of the FGCT is the Institute of Financial Management of Social Security, I.P. (IGFSS, IP) WHAT IS THE PURPOSE OF THE FGCT? The FGCT is intended, together with the Labour Compensation Fund (FCT), to ensure the right of workers to receive half (50%) of the compensation due by the employer for termination of the employment contract, calculated in accordance with Article 366 of the Labour Code.

WHO CAN ACCEPT? Only employers (EE) can join the FGCT.

Is joining the FGCT mandatory? Yes.

WHO IS EXCLUDED FROM THE SCOPE OF THIS SCHEME? Employment relationships with the services referred to in Article 3(1) to (4) of Law No 12-A/2008 of 27 February 2008 (the services of the direct and indirect administration of the State; regional and local government services; bodies and services supporting the President of the Republic, the Assembly of the Republic, the courts and the Public Prosecutor’s Office and their respective management bodies and other independent bodies; peripheral services of the State, both in relation to locally recruited workers and those who are otherwise employed there); This includes special regime public institutes. Employment relationships arising from very short-term employment contracts, governed by Article 142 of the Labour Code, are also excluded from the scope of this scheme. ARE TEMPORARY WORKING UNDERTAKINGS EXCLUDED? No, no. Temporary employment agencies are subject to this scheme. WHAT WORKERS ARE COVERED? This covers workers whose employment contracts are concluded after the entry into force of Law No 70/2013 of 30 August 2013, i.e. 1 October 2013. IS THE EMPLOYER ENTITY OBLIGED TO AUTHORISE ACCESS TO SOCIAL SECURITY DATA? Yes, yes. Article 18 of Ministerial Implementing Order No 294-A/2013 of 30 September 2013 provides for the interconnection of data with social security, considering that the employer’s obligations relating to membership of the funds and the provision of identification data have been fulfilled, whenever the necessary information can be obtained directly from the social security IT system.

ACCESSION How to join the FGCT? Membership of the FGCT operates automatically, with the employer joining the FCT or the Equivalent Mechanism (ME). It is made at the initiative of the employer and exclusively by electronic means, through the website www.fundoscompensacao.pt. WHEN SHOULD THE EMPLOYER ENTITY CARRY OUT ACCESSION? The employer must join with the conclusion of the first employment contract covered by the provisions of Law No 70/2013 of 30 August 2013 and up to and including the date of the start of performance of that contract. In case of joining ME, the admission of new workers must be communicated by EE, to the FGCT, until the date of the start of the execution of the respective employment contracts. WHEN DOES THE ACCESSION OF THE EMPLOYER ENTITY TO THE FGCT BE CONSIDERED? The employer's membership of the FGCT ends with the cessation of its activity in the social security system. INCLUSION OF WORKERS ARE THE COMMUNICATION AND REGISTRATION OF THE ADMISSION OF NEW COLLABORATORS REQUIRED? WHAT ARE THE CONSEQUENCES OF NON-COMMUNICATION? Yes, notification of the admission of new workers to the FGCT is mandatory. Failure to notify the admission of new workers to the FGCT constitutes a very serious administrative offence. Is Worker Intervention Necessary? No, no. The registration of the worker's admission on the Funds' website is made by the employer for their inclusion.

DELIVERIES WHEN ARE THE DELIVERIES DUE? The adherence to the FCT or the ME determines for EE the obligation to pay for deliveries to the FGCT. Deliveries shall be due from the time of commencement of the performance of each contract of employment until its termination, except for periods in which the length of service is not taken into account.

HOW DOES THE PAYMENT OF DELIVERIES TO THE FGCT HAVE BEEN PROCESSED? The payment of deliveries due by the employer is made through the website www.fundoscompensacao.pt. After validation of the amount to be delivered, a payment document is issued containing an ATM reference whose value includes the tranche corresponding to the FCT and the tranche corresponding to the FGCT. The settlement of this payment document can be done at any ATM (payment of services / purchases) or via the Internet, by homebanking.

CAN PAYMENT BE CARRIED OUT WITHOUT ISSUING THE PAYMENT DOCUMENT? No, no. Any payment made by other means will not be taken into account for the purpose of fulfilling the employer's obligation.

Are deliveries to the FGCT mandatory? Yes, yes. The adherence to the FCT or the ME determines for EE the obligation to pay for deliveries to the FGCT. WHAT IS THE AMOUNT OF DELIVERIES TO THE FGCT? The deliveries to be made by employers to the FGCT correspond to 0.075% of the basic salary and length of service for each worker covered. DO WORKERS' FAITHES AFFECT THE VALUE OF THE DELIVERIES? The value of the deliveries to the FGCT is affected only when the absences have an impact on the employee’s seniority and, to that extent, on the amount of compensation to which he or she will be entitled for the termination of the employment contract. For example, unjustified absences should be recorded and reduce the value of the deliveries to be made to the funds, while sick leave, without affecting the employee’s seniority, does not change the value of the deliveries.

WHAT IS THE PERIODICITY AND NUMBER OF DELIVERIES? Deliveries are paid monthly, 12 times a year, and relate to 12 basic monthly remunerations and length of service for each worker covered. WHEN SHOULD THE EMPLOYER AUTHORITY PROCEDURE FOR PAYMENT? Deliveries to the FGCT are payable between the 10th and 20th of each month, by reference to the salary and length of service of the workers for the previous month. The employer may also make the payment until the 8th of the following month, but with daily interest from the 21st until the day of actual payment.

CAN THE PAYMENT OF MONTHLY DELIVERIES BE PARTIAL? No, no. Deliveries for a given month must be paid in full. Payment is not allowed for any amount other than that shown on the document for this purpose. It is also not possible to pay contributions for only part of the workers included in the FGCT.

NON-COMPLIANCE WHAT HAPPENS IF THE EMPLOYER ENTITY DOES NOT DO THE DELIVERIES? The employer joining the FGCT that does not make the monthly delivery by the 20th of each month defaults. Failure to comply gives rise to the payment of interest for late payment, the costs inherent in the regularisation and, if payment is not made voluntarily, the enforced recovery of the amounts due and the administrative offence.

A) VOLUNTARY REGULARISATION OF DEBT – PAYMENT AGREEMENT

HOW IS THE REGULARIZATION OF MISSING DELIVERIES CARRIED OUT? The voluntary regularisation of missing deliveries shall be carried out in connection with the payment of the deliveries of the following month, together with interest for late payment and the costs of non-compliance, if they are due.

CAN THE REGULARISATION OF LACKED DELIVERIES BE CARRIED OUT IN BENEFITS? Yes, yes. The employer may request the FGCT to pay arrears in instalments. HOW TO APPLY FOR PAYMENT IN BENEFITS? Upon request made through the website www.fundoscompensacao.pt. WHAT IS THE MAXIMUM NUMBER OF BENEFITS? - maximum number of benefits: 3 - minimum amount to be paid: €45.00 WHAT IS THE MONTHLY VALUE TO BE PAID WHEN THE APPLICATION FOR PAYMENT IN BENEFITS IS DEFERRED? The value of the agreed instalments is added to the value of subsequent deliveries, according to the monthly payment document obtained from the website.

AFTER THE CONCLUSION OF A VOLUNTARY PROVISIONAL AGREEMENT BY THE EMPLOYMENT AUTHORITY, CAN THE PAYMENT OF THE BENEFITS BE EARLIED? Yes, it is possible to anticipate the payment of the instalments, and for this purpose EE must amend the request for a payment agreement on the Compensation Funds website, in accordance with the number of instalments it intends to anticipate. a) If the request for advance payment is made before the 10th of the current month: The amount corresponding to the advance will already be included in the payment document issued in the same month. b) If the request for advance payment is made after the 10th day of the current month: The amount corresponding to the advance will be included in the payment document issued the following month.

CAN EE CANCELL THE PAYMENT AGREEMENT ALREADY DEFERRED TO? Yes, yes. You can do so on the Clearing Funds website before the 10th.

B) COERCIVA RECOVERY WHEN DOES COERCIVA RECOVERY BE VERIFIED? Enforcement is applied when there is a debt for non-payment by EE and EE has not voluntarily settled the payment.

TERMINATION OF THE WORKING CONTRACT IS THERE A DEADLINE FOR THE COMMUNICATION OF THE TERMINATION OF THE WORKING CONTRACT? Yes, yes. The employer must notify the termination of the employment contract before it takes effect. If this is not possible, you must do so on the website within 5 days of the date of termination.

WHAT HAPPENS IN THE CASE OF TERMINATION OF THE WORKING CONTRACT? If the termination of the employment contract gives rise to the worker’s right to compensation calculated in accordance with Article 366 of the Labour Code, the employer shall pay the worker the full amount of compensation under the terms and conditions laid down in the Labour Code.

WHAT HAPPENS IF THE EMPLOYER ENTITY DOES NOT GIVE THE VALUE OF COMPENSATION TO THE WORKER? Where the employer does not pay, in whole or in part, the compensation provided for in the Labour Code, the worker may call the FGCT, for the amount necessary to cover half of the amount of compensation due for termination of the employment contract calculated in accordance with Article 366 of the Labour Code, subtracted from the amount already paid by the employer, upon request submitted on the website. The decision on the application shall be notified to the employee by registered letter with acknowledgement of receipt.

IN WHICH SITUATIONS IS THE COMPENSATION PAYMENT TO THE WORKER EXCLUDED FGCT? The FGCT shall not be liable for any amount where 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 Labour Code.

WHAT HAPPENS IF, AFTER PAYMENT, THE LABOUR CONTRACT IS NOT TERMINATED? As for the employer, if the termination of the employment contract does not occur, it must communicate on that date to the Funds the maintenance of the worker's bond. As for the worker, with the return of the amounts paid by the FGCT, he must make the respective payment, according to the document previously issued, or request payment in instalments on the website. WHAT HAPPENS IF, AFTER THE REIMBURSEMENT, THE DESPITE OF THE WORKER IS CONSIDERED ILLEGAL? If after the dismissal there is a judicial decision requiring the reinstatement of the worker, the employer is obliged, within 30 days from the date of the final decision of that decision, to make the inclusion of the worker in the FCT, and consequently, automatically joining the FGCT, and must deliver the amounts that it no longer makes since that date.

AMENDMENTS TO THE WORKING CONTRACT WHAT SHOULD THE EMPLOYER ENTITY DO IF THE ELEMENTS OF THE WORKING CONTRACT ARE AMENDED? The employer shall communicate any changes to the identification details relating to the employer, the employee and the employment contract on the website within 5 days.

WHAT HAPPENS IF THE EMPLOYER ENTITY DOES NOT COMMUNICATE AMENDMENTS TO THE LABOUR CONTRACT TO THE GFF? Violation of the obligation to update the records is reported to the Authority for Working Conditions (ACT), pursuant to Law No 70/2013 of 30 August 2013, which may constitute an administrative offence.

HOW TO COMMUNICATE TO THE FGCT AMENDMENTS TO THE WORK CONTRACT? Changes to the registration of the worker included in the FGCT are made in www.fundoscompensacao.pt. DEVELOPMENTS WHAT ARE THE DEVELOPMENTS AND WHAT DOES THE ORIGINA? Any event that determines an undue payment to the FGCT by the employer may give rise to a refund, which consists in the return to the employer of the amounts that he has unduly delivered to the FGCT. The refund only occurs when the situation that gave rise to the undue payment is corrected.

MUST THE RETURNS BE REQUESTED BY THE EMPLOYER ENTITY? No, no. The return, unlike in the case of reimbursement, does not require a request from the employer. Although subject to approval by the managing body, the return is automatically triggered by the system.

HOW DO THE DEVELOPMENTS HAVE BEEN PROCESSED? Returns of amounts unduly paid to guarantee funds follow the same but autonomous procedure, since FCT and FGCT have separate management bodies. Therefore, the transfer of values by return is carried out separately.

NOTE: THE INFORMATION IN THIS FAQ DOES NOT DISCLAIMER THE CONSULTATION OF APPLICABLE LAW. 23-09-2014