Ruling of the Portuguese Constitutional Court – The unconstitutionality of paragraph number 2 of Article 398 of the Portuguese Companies Code

On 17 December 2019, the Portuguese Constitutional Court declared, through Ruling no. 774/2019, the unconstitutionality, with general mandatory force, of paragraph number 2 of Article 398 of the Portuguese Companies Code, which establishes the termination of the employment agreement entered into less than one year ago, when the employee is appointed as director of the company. The Portuguese Constitutional Court considered that the rule suffers from a procedural irregularity as a result of the violation of the right of workers’ organisations to participate in the legislative process.

Nevertheless, the Portuguese Constitutional Court decided to limit the effects of the declaration of unconstitutionality by ruling that it only takes effect from the date of the ruling’s publication.

Click here to access Ruling no. 774/2019.

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