Portuguese Constitutional Court’s Ruling on Employment Entitlements Impacts Foreign Controlled Companies in Portugal

The Portuguese Constitutional Court has recently declared that the interpretation of sections 334 of the Portuguese Employment Code and 481 (2) of the Companies Code are unconstitutional in the sense that they would prevent foreign based companies that are in control of, wholly owned or have crossed shareholding interests with a Portuguese company, to be joint and severally liable for unpaid employment entitlements of employees of their Portuguese subsidiary.

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