The Labour Compensation Fund (FCT) was established in 2013 to provide employers with a mechanism to support the payment of part of the compensation due to employees upon termination of their employment contracts.
As part of the legislative changes introduced by the Agenda do Trabalho Digno, the FCT scheme has been substantially overhauled. Since 1 January 2024, the obligation to contribute to the fund has ceased, and it now essentially serves as a mechanism for managing the amounts accumulated by companies over previous years.
Deadline for utilising the amounts
Existing balances in the FCT may be used by companies until 31 December 2026. After that date, any amounts that have not been utilised will be transferred to the Labour Compensation Guarantee Fund (FGCT). It is estimated that around €517 million remains available in the fund.
Possible uses of the balances
The current scheme now permits other uses of the amounts held in the fund, namely:
- Funding for employee skills development and certified training;
- Support for certain investments or social benefits for employees; or
- Support for employees’ housing costs.
According to data from the Ministry of Labour, since the new scheme came into force, companies have already withdrawn more than €120 million. Professional training has been the most common use, accounting for around 64% of the funds withdrawn and covering more than 300,000 workers. This trend reflects companies’ interest in combining the use of these funds with compliance with legal obligations regarding continuous training.
For this reason, before proceeding with any withdrawal, it is advisable to assess the company’s specific situation and define the most appropriate strategy for using the available funds, ensuring compliance with the applicable legal regime.
Labour Department
Hugo Martins Braz | Mariana Lacueva Barradas | Catarina Almeida
