Labour Market Reform Debate: NPPI Researchers Weigh In

A proposed labour market reform is before the Portuguese Parliament, with implications that go well beyond partisan lines. Two NPPI researchers contributed to the public debate in the past week, offering complementary perspectives on what reform should achieve and what it will require.

Pedro Martins, in an interview with Observador, noted that Portugal’s labour laws lag behind EU standards and have produced a segmented market that suppresses wages and productivity. Around half of young workers are on fixed-term contracts, and youth unemployment runs at three times the adult rate. Martins argued that legal reform alone will be insufficient: social partnership in Portugal currently represents only a narrow slice of the workforce, and broadening that base is as important as the legislation itself. Any durable agreement, he suggested, will need to extend beyond labour law — as the 2012 tripartite deal demonstrated.

In an opinion piece in Jornal de Negócios, António Nogueira Leite argued that the Labour Code has long protected insiders while penalising young people and those seeking to enter the market. The case for reform, in his view, rests on three pillars: fairness, competitiveness, and demographic sustainability. Portugal needs rules that reward skills over seniority, and reforming labour law should be understood not as an attack on workers but as a recognition that the jobs of the future require a 21st-century regulatory framework.

Pedro Martins interview in Observador
António Nogueira Leite opinion piece in Jornal de Negócios