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The Portuguese government is expected to pass a new law lowering the amount of days corresponding for redundancy payments.
Previously, workers who were dismissed from their jobs could claim redundancy for 20 days per working year. Under the new law, the number is reduced to 12 days.
The change to labour laws is in line with the austerity measures Portugal has agreed to implement in order to rescue the country's faltering economy. According to the political and economic Troika of the IMF, the EU and the ECB, such measures lead to more labour flexibility, incite businesses to overcome their hiring freeze and create more employment opportunities.
However, the announcement of these changes was met with strong criticism from Portugal's worker unions. They refuted the claim that a 12-days-per-year compensation is comparable to the EU average, as was claimed by the Portuguese Prime Minister Pedro Passos Coelho.
The implementation of austerity measures in Portugal has seen a rise in taxes and a decrease in government spending on social subsidies for health and education, as well as a reduction in unemployment benefits.