Covid-19 impact and responses: Portugal

Updated on: 25 March, 2020

What is the current situation?

General information

Similar to surrounding countries, the new cases of infected people in Portugal are increasing every day. The knowledge acquired today and the experience of other countries advise that identical measures be adopted in Portugal, always in close articulation with the European authorities.

Portugal has declared the state of emergency, based on the verification of a situation of public calamity per March 18th, in effect until 2nd of April. (Source: www.portugal.gov.pt) The country’s officials follow the World Health Organization guidelines and have issued a decree covering the entire national territory.

The situation with factory production

The Portuguese government calls on all employees to work from home as much as possible. Textile and garment factories are currently working with 20 or 30% of their total capacity, contributing to the slow down of the spreading of the virus. This means that the majority of factory workers are being sent home. Travel is very restricted, meetings are banned and all schools are closed.

Portugal has over 12,000 textile and clothing companies, with 140,000 employees. Many textile companies are facing bankruptcy as revenues fall sharply in this time of crisis. Customers are cancelling orders and capacity is brought back to a minimum. Several factories are switching their business over to the production of safety masks and overalls for medical staff.

What are the government policies to support local businesses?

The Portuguese government presented several measures aimed at relieving pressure from companies’ finances. Commitments that would be due to the banking system, social security and the tax system have been alleviated.

With these measures, the government ensures that companies in the most affected sectors are available to fulfil other commitments, particularly to their workers.

The government has announced four credit lines through banking institutions and guaranteed by the State, in addition to the general line, which covers all economic sectors. The companies’ access to the available credit lines will be conditional on the maintenance of jobs. In total, these new lines of credit represent EUR 3 billion of additional financing to the economy, with a grace period of up to 12 months, and are amortised for up to four years.

For the textile, clothing, footwear and wood industries a total of EUR 1.3 billion will be made available, of which EUR 400 million will be for micro and small companies.

Who is it for? Microenterprises, SMEs with:

  • Positive net position on the last approved balance sheet; or
  • Negative equity and settlement on the interim balance sheet approved until the date of the transaction.

What are the conditions? Maximum per company: 1.5 million euros.

  • Guarantees up to 90%
  • Counter-guarantees: 100%
  • Grace period: up to 1 year
  • Term of operations: 4 years

Source: https://covid19estamoson.gov.pt/medidas-excecionais/#empresas

What are the government policies and regulations to protect employees – the workers?

The government has set up a page with detailed information for both workers and companies: https://covid19estamoson.gov.pt This page lists specific questions and answers regarding sick leave, child care support, health authorities, etc.

The most relevant ones:

  • If a worker has a prophylactic isolation declaration issued by the Health Authority, the worker is entitled to the payment of a subsidy equivalent to the sickness allowance, corresponding to 100% of their reference remuneration, while the isolation lasts, that is, up to 14 days.
  • During the days an employee does not work to provide assistance to his child or grandchild, the worker is entitled to receive the respective allowance, which should be applied for preferentially in Direct Social Security (SSD). The application must be made preferably at the Social Security Direct, attaching a copy of the prophylactic isolation declaration issued by the Health Authority.
  • Employees are entitled to exceptional financial support corresponding to 2/3 of their basic remuneration, which is supported equally by the employer and Social Security. This support is not granted to workers who are carrying out their professional activity in teleworking during the closure of schools.

Forms needed to identify workers in isolation can be found here: http://www.seg-social.pt/formularios

What are local stakeholders doing to lobby their government?

No specific information available.

What are local organisations doing to support and protect the workers?

Most labour unions follow the guidelines of the National Health Institution, SNS, reposting them on their own website. See, for example: http://www.sindeq.pt

What have been the responses and requests of business associations to support the industry?

The main focus so far has been sharing the official guidelines of the government, containing economic measures and available resources.

What are international brands doing to support suppliers and protect workers?

No information currently available.


Relevant links for more information

Ministry of Health

Ministry of Labour

Association of Textile and Clothing

General updates from government