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Portuguese Constitutional Court rules aspects of labor reform illegal

Magistrates argue new rules on dismissal of workers are “too vague”

Portugal’s Constitutional Court has ruled that a number of aspects of the labor reform approved last summer by the center-right government of Prime Minister Pedro Passos Coelho are illegal.

In a ruling made public on Thursday, the Court said that some of the regulations in the reform regarding the dismissal of employees are too “vague,” and leave it up to the discretion of companies to decide on whether layoffs are justified or not.

“The law does not provide the necessary regulatory indications about the criteria that should be used by a company in deciding which jobs should be cut,” the writ said. This, it said, “opens the door for arbitrary and legally uncontrollable dismissals.” The law also frees companies of the obligation to provide workers whose jobs are to be eliminated with alternative employment if available.

The ruling argued that the reform also violated the constitutional right of workers to engage in collective bargaining.

The Court’s latest ruling came in response to a suit filed by the Communist Party of Portugal (PCP), the Left Bloc (IU) and the Greens right after the reform was approved last year.

The Court had already thrown out aspects of the government’s 2013 budget on cuts in seasonal bonus pay and sick benefits, requiring the Passos Coelho administration to find other means of cutting spending to reduce the public deficit.