In Portuguese construction, a client and a main contractor can be held liable for labour-law breaches committed by their subcontractors.
What it means
Portuguese law makes the client (the party ordering the work) and the main contractor jointly and severally liable for certain labour-law breaches by subcontractors. Joint and several liability means each of these parties can be pursued for the whole debt, not just its own share. This covers unpaid wages and other labour claims, and it also covers fines issued for breaches further down the chain.
Who it applies to
This rule applies in construction work generally. It does not depend on where the work is physically carried out, and it does not depend on how much of the contract is labour versus materials. There is no threshold that removes this liability based on those factors: it applies regardless of the size or type of the job.
How it works
When a subcontractor breaches labour law, for example by failing to pay wages correctly, the client and the main contractor can be pursued for that breach as well as the subcontractor itself. Exactly how far down the chain this liability reaches is not fully settled. In general terms, liability can extend through the subcontracting chain, beyond just the party each company contracted with directly.
What to watch out for
Good paperwork does not remove this liability. Contracts, checks, and records do not shield a client or a main contractor from being pursued if a subcontractor breaches labour law. What documentation does is help during a dispute or an inspection, by showing what checks were carried out and what was agreed.
Having contracts and compliance paperwork in place does not stop a client or main contractor from being held liable for a subcontractor's labour-law breach. It only helps show what was done if the case is ever inspected or disputed.