The individual time bank could no longer be applied in Portugal in 2020, but a similar modality may return within the scope of the labor reform. The government’s proposal has already been filed with Parliament and provides for the creation of a time bank by direct agreement between employer and employee, when there is no applicable collective agreement.
According to , a website specializing in economics, the new regime should not be called an individual time bank, but rather an agreed time bank. Even so, the logic is close to the figure that was eliminated: allowing the normal working period to increase on certain days, with subsequent compensation in rest or money.
How many more hours per day?
The proposal provides that the normal working day may be increased by up to two hours per day. There are, however, limits. The worker cannot exceed 50 hours per week and the increase will have a ceiling of 150 hours per year. These are the limits set out in the bill submitted to Parliament, according to ECO.
In practice, this means that the worker will be able to work more hours on certain days, accumulating this time in a balance that must be compensated later.
Had the individual time bank ended?
Yes. The individual time bank was eliminated in October 2020, after the revision of the labor law approved during the first Government of António Costa.
Alternatively, the group time bank became available, a modality dependent on consultation with workers. This solution was presented as more protective, but received criticism from business confederations, who consider it complex and difficult to apply.
The return of a model based on a direct agreement between employer and employee was a long-standing demand from employers. The Government of Luís Montenegro has now decided to move forward with this proposal, despite criticism from union structures, including the UGT.
How might the new regime work?
The proposal provides that, in the absence of a collective agreement, employer and worker can enter into a direct agreement to establish the time bank.
The employer must inform the employee of the need to provide additional work at least three days in advance. In situations of force majeure, or when it is essential to prevent or repair serious damage to the company or its viability, communication may occur as soon as possible.
In other words, the time bank would not function as a permanent change in the schedule, but as a mechanism for managing periods with greater or lesser need for work.
Workers may also request a reduction in hours
The Government argues that the scheme can also benefit the worker. The Minister of Labor, Maria do Rosário Palma Ramalho, has argued that the time bank by agreement can help in reconciling professional, personal and family life, allowing you to leave early one day and compensate for this time at another time.
The proposal provides that the worker may ask the employer to reduce the normal daily working period by up to two hours, as long as they do so at least three days in advance.
If, at the end of the reference period, there is a balance of hours in favor of the worker, he or she will be able to choose between two forms of compensation. The first is to take a rest period corresponding to the total hours accumulated, until the end of the following month. The second is to receive payment for these hours with a 25% increase.
This increase corresponds to the value of the first extra hour on a working day. UGT defended a 50% increase, but the government’s proposal fell short of this demand. Still, it represents a change compared to initial versions, which did not provide for any additional features.
Reference period can reach six months
The proposal submitted to Parliament provides that the reference period for the time bank cannot exceed six months.
It is within this period that the balance between overtime worked and compensated hours will be determined. If, in the end, there are hours to be compensated in favor of the worker, the established rest or payment rules apply.
According to ECO, this version represents a change in relation to the government’s initial proposal, which pointed to a maximum period of four months.
Existing balances can also count
The extra 25% may also apply to balances of hours already existing on the date the new law comes into force. The proposal submitted by the Government clarifies that the new rules will be applicable to situations of balance of hours existing at that moment, considering the last 12 months as the reference period.
In practice, workers with hours accumulated when the law comes into force will be able to benefit from the new compensation rules, if the diploma is approved under the current terms.
Group time bank should end
At the same time, the Government wants to revoke the group time bank. This regime, which depends on a worker referendum, has been criticized by employers for being considered bureaucratic. The proposal provides that the group time banks that are in force will cease within a period of one year from the entry into force of the new law, unless another event occurs in the meantime that puts an end to this modality.
The change follows the reverse logic of the previous labor review, which ended the individual time bank and maintained the group model.
Not yet in effect
Despite having already been filed in Parliament, the proposal is not yet law. The diploma will have to be voted on in general, discussed in the specialty and approved in a final global vote. Afterwards, it will go to the President of the Republic.
António José Seguro had already stated, during the race to Belém, that he would veto changes to labor law if there was no agreement in the Social Concertation and if the proposal did not evolve. As this agreement does not exist, the political outcome has not yet been finalized.
What changes for workers and companies
If it advances, the new bank of hours by agreement could change the way companies and workers organize periods of greater workload. For employers, it can provide greater flexibility in managing schedules. For workers, the central point will be to understand under what conditions the agreement is signed, how hours are recorded, who controls the balance and how compensation will be made.
For now, the essential rule is this: workers will be able to work up to two extra hours per day under this regime, but the proposal is still under discussion and will only take effect if it is approved in Parliament, promulgated and published in the Official Gazette.
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