A real case, told with permission. Some details — figures, dates and characteristics — have been altered to protect the identity of everyone involved.
Some time ago, someone came to the office with an email in hand. The company where they had worked for almost five years — a senior professional, with responsibilities and a family — had sent them, late on a Friday afternoon, “the figures for your exit”. Deadline to respond: two working days, “because of accounting”. They spent the whole weekend with that email open, rereading the figures the way you look for the mistake on a bill.
They weren’t angry. They were suspicious. And let me say this straight away: I didn’t see bad faith in that email — I saw improvisation. And improvisation follows a simple logic: whoever keeps no record knows less; and whoever knows less, pays. There were three problems here. One of them was potentially worth ten times what was being offered for it. And along the way, two more would surface.
If an email like this ever reaches you, this text is for you.
The figures that didn’t add up
The offer came to roughly 22 thousand euros gross. It looked reasonable — until you looked at the main item: “compensation” of around 6 thousand euros.
In plain terms: in a mutual termination agreement (acordo de revogação) — the arrangement by which employer and employee jointly end the contract — you give up guarantees the law grants you: procedure, deadlines, the ability to contest. Anyone waiving guarantees expects something in return. So the value of an agreement should sit above the minimum you would receive in a dismissal imposed on you, never below it. Here, it sat below.
Where it’s written: article 366 of the Portuguese Labour Code (Código do Trabalho) sets the reference compensation — currently 14 days of base pay for each complete year of service, with a pro-rata fraction for part years. Note what that figure is: in a mutual termination agreement it isn’t a mandatory amount, it’s the benchmark for the negotiation. It’s the floor of a dismissal with every guarantee attached; it isn’t the price of an agreement in which those guarantees are waived. (Amounts and rules change often — always confirm them as at the date of your own case.)
The word that described nothing
When the person questioned the figures, the company’s reply brought a new justification: this was an agreement “triggered by poor performance”.
Except there had never been an appraisal. No formal objectives, no performance management process, no documented conversation.
In plain terms: performance is something you measure and track. Without measurement, “poor performance” isn’t a fact — it’s a label. And a label collapses when it is challenged in writing and no record exists to support it. That is exactly what happened: once the characterisation was contested, the company dropped it within 48 hours and spoke only of a mutual termination agreement, in neutral wording.
Hold on to this idea, because it explains everything else: where there is no process, there is improvisation — and whoever keeps no record knows less; whoever knows less, pays.
The invisible detail: unemployment benefit
This was the point the person had not spotted on their own — and the one that made professional help decisive.
In plain terms: “we left by agreement” does not automatically mean you are entitled to unemployment benefit (subsídio de desemprego). A mutual termination agreement only opens access to the benefit if it is expressly framed under the right legal provision, with the right declaration issued by the company. Without that framing, you leave with no salary and no replacement income — and you only find out when you get to Social Security (Segurança Social).
Where it’s written: Decree-Law no. 220/2006 (articles 9 and 10-A in particular), which sets out the conditions under which termination by agreement gives access to the benefit, and which declaration the company must issue.
A single reasoned reply was enough — four conditions, each with its legal basis. That same day, the company put forward a corrected offer: legal framing that secured the benefit, and compensation above 12 thousand euros. Double. No litigation, no court, not one raised voice.
The options that were about to evaporate
The third problem was the quietest one.
The person held a few thousand phantom shares. These are contractual rights to a future payment, indexed to the value of the company — they are neither shares nor stakes in a limited company (ações nem quotas). And that value only materialises if a liquidity event occurs one day, typically the sale of the company. The first offer proposed around one thousand euros to waive all of them — while an indicative valuation carried out by the company itself, as at the joining date, pointed to a figure ten times higher. And when the offer was refused, a dangerous sentence arrived in writing: “the rights have already been exercised”.
They had not. They were vested — which is a different thing.
In plain terms: vested means holding the ticket; exercised means having gone through the gate. And the company’s own plan provided that unused tickets lapsed with no compensation whatsoever within a short window after departure — and could only be used while the contract was still in force.
Where it’s written: this time it isn’t in the law — it’s in the plan itself. Option plans are contracts, and each one has its own rules, its own deadlines and its own definitions of good leaver and bad leaver. That’s why they have to be read — the specific document, at the right moment.
Had the person trusted that sentence and signed, the options would have vanished on their own, weeks later, without anyone needing to lift a finger. It was reading the plan, in time, that preserved them: we formalised the exercise of the options before the agreement was signed, with the contract still in force, and the phantom shares remained valid — a future right preserved, rather than traded for a thousand euros or lost to a deadline.
Paperwork gets it wrong too
Even with everything agreed, the final drafts carried two errors: a wrong date on precisely the document the unemployment benefit depended on, and the total presented as a single lump sum — when it is the breakdown by item that determines how each part is taxed.
In plain terms: the negotiation ends with the handshake; the risk only ends with the last signature. Drafts are read line by line — dates included.
Where it’s written: article 2, no. 4 of the Portuguese Personal Income Tax Code (Código do IRS) — compensation for termination of the contract is excluded from taxation up to a limit that depends on length of service and pay; anything above that limit is taxed. Processing everything as a lump sum can turn into taxable income what the law would have exempted. (Here too: limits change, confirm them as at the date.)
What this case teaches
- Artificial deadlines are not binding. “Reply by Monday because of accounting” is a convenience for the sender, not an obligation for the recipient. In this case, refusing to rush cost nothing — and improved everything.
- Agreement ≠ guaranteed benefit. Without the express legal framing and the company’s declaration, you can end up with no income at all.
- The legal minimum is a floor, not a ceiling. In an agreement where you waive guarantees, the reference figure in article 366 is where the conversation starts.
- Vested is not exercised. If you hold options or phantom shares, what decides their fate is in the plan — and the clock runs, with or without your knowledge.
- Everything in writing. In this case, every statement the company made was recorded in email — and it was that record which made it possible to contest the label, correct the figures and evidence each step. What is agreed by phone protects nobody.
- Drafts are signed after being read. A wrong date on the wrong document can undo precisely what you negotiated.
If you’ve received an email like this
- Don’t reply under pressure. No two-working-day deadline, imposed for administrative convenience, binds you. Reply that you need time to review — in writing.
- Keep everything, and keep everything in writing. Emails, offers, drafts, versions. If an important conversation happens by phone, confirm the essentials by email afterwards.
- Get a professional reading before you sign. Not after — before. As you’ve seen, some rights lapse on signature or on departure, and by then there is nothing left to do.
In the end, the process took seven weeks — not the two working days of that first email. It closed at around 25 thousand euros, with unemployment benefit secured, options preserved and, perhaps most importantly, it ended with genuine goodwill on both sides. Defending your rights and keeping a good relationship are not opposites — they are what comes of following a process.
Every situation has its own variables: length of service, type of contract, option plan, holiday record, tax position. The figures and rules referred to here change often and should be confirmed as at the date. This text gives you the general map; your specific case deserves a reading of its own — preferably before you reply to the Friday email.
If that email has already arrived — or you suspect it’s on its way — get in touch. At Anjos & Brum we do that reading with you: calmly, in writing, and before any signature.