Consequences of Classifying a Work Accident in Portugal

In Portugal, Law No. 98/2009 of 4 September regulates the compensation scheme for work-related accidents and occupational diseases.

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Article 48 provides for compensation in the event of a work-related accident and grants the worker, in summary, the right to receive the following benefits:

1. a) Permanent and absolute incapacity for any work – 80% of remuneration, plus 10% for each dependant, up to a maximum of 100%;
2. b) Absolute permanent incapacity for habitual work – a lifetime annual pension of between 50% and 70% of habitual remuneration;
3. c) Partial permanent incapacity – a lifetime annual pension of 70% of the reduction suffered in earning capacity.

Article 18 addresses the consequences of a work-related accident caused by the employer's failure to comply with health and safety at work rules. An accident may be classified as aggravated if it is caused by the employer's fault or results from a failure to observe safety and hygiene standards. In addition to compensation for all material and non-material losses, the injured worker is entitled to:

1. a) An annual pension or daily allowance of between 70% and 100% of remuneration, where there is absolute permanent incapacity for habitual work;
2. b) In cases of absolute incapacity for any and all work, the full amount of remuneration;
3. c) In cases of partial incapacity, the worker is entitled to receive the percentage corresponding to the reduction in capacity.

Accordingly, where a work-related accident is classified as aggravated, the employer's liability is increased through a higher pension awarded to the worker, and the worker additionally becomes entitled to amounts in respect of non-material damages, such as pain and suffering (quantum doloris), aesthetic damage, and similar heads of loss.

The insurance company is liable to pay the pension amount set out in Article 48, that is, the sum payable for an ordinary work-related accident, while the employer must pay the additional amount arising from the aggravated liability provided for in Article 18, as well as all remaining non-material losses, as established in Article 79(5).

The insurance company may seek reimbursement from the employer, by way of a right of recourse, for the benefits it has paid to the worker.

The employer is therefore liable for payment of the full amounts and is required to provide the Court with a payment guarantee (for example, a bank guarantee, insurance policy, mortgage over a property held to the order of the proceedings, etc.), failing which enforcement proceedings may be brought to seize the estimated capital that will be owed to the injured worker, pursuant to the provisions of Article 84.

The burden of proof lies with the insurer seeking to avoid payment of the annual pension or daily compensation, payment of which is mandatory by reference to Article 79(3) of the legislation under analysis, to demonstrate that i. the employer was required to comply with certain safety rules and failed to do so, and that ii. it was the breach of those safety rules that gave rise to the workplace accident.

This provision means that an injured worker receiving a monthly salary of, for example, €1,000.00 and entitled to a pension for absolute permanent incapacity for their usual work would receive, under Article 48(3)(a), a lifelong annual pension of 80% of their salary. In such a case, the injured worker could expect a lifelong annual pension of €11,200.00, paid by the insurer in accordance, once again, with Article 79 of Law No. 98/2009 of 4 September.

Where the employer is found to be at fault, the annual pension owed will amount to €14,000.00, with the employer required to pay the worker directly the portion not covered by the insurance company, €2,800.00, and subsequently to reimburse the insurance company for the amount it bears, €11,200.00.

Carlos Gonçalves
Valdemar Gonçalves
VALDEMAR GONÇALVES & Associados, R.L.
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