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Extension Ordinances play a crucial role in the application of Collective Labour Agreements (CLA), allowing agreed conditions to be extended to a wider range of employers and employees in the sector. These ordinances are therefore an important mechanism for guaranteeing standardised labour conditions and ensuring that agreed standards are widely applied, even when employers are not directly involved in collective bargaining.
In the Portuguese legal system, as a rule, Collective Agreements are only binding on the parties that entered into them. However, as Carolina Hecker, Associate at CCA's Labour practice, explains in an opinion piece for RH Magazine that the Extension Ordinances allow the scope of these agreements to be extended, as determined by the government, to other employers and employees in the same sector, when there are social and economic reasons for doing so. This ensures that, in the absence of a negotiating instrument of their own, all companies within a sector can be subject to the same terms.
‘However, the application of a CLA by means of an Extension Ordinance can generate legal uncertainty for companies, since identifying potentially
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- RH MAGAZINE