The labour reform bill is dead. The government lost the vote.

Parliament rejected the government's labour reform bill on Friday. The general strike, the AI ban debate, and the "draconian" warnings all led to this. It's Sunday, 21 June. The summer solstice. Twenty-eight degrees. Here's what you need to know.

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PARLIAMENT REJECTED THE LABOUR REFORM BILL. THE MOST CONSEQUENTIAL VOTE OF THE YEAR.

On Friday, the Assembleia da República voted down the government's Trabalho XXI labour reform bill in its general vote. The legislation that triggered the June 3 general strike, shut the Metro for 31 hours, cancelled 360 flights, cost the economy up to €792 million, was called "draconian" by legal experts, and prompted President Seguro's pledge to veto without union support, did not survive its first parliamentary test.

The vote broke along predictable lines. PSD and CDS-PP (the governing coalition, 80 seats) voted in favour. PS (78 seats), PCP, BE, Livre, and PAN voted against. The combined opposition outnumbered the government. The bill fell.

The rejection does not mean the issues go away. The CGTP's objections to fixed-term contract extensions, outsourcing rules, and weakened reinstatement rights remain unresolved. The UGT's demand for stronger worker protections is still on the table. The BE proposal to ban AI-driven dismissals, which was attached to the package, falls with it. And the question of how Portugal modernises its labour market, which the OECD ranks as the second most rigid in the developed world, is now back to square one.

For the government, the defeat is significant. Montenegro staked political capital on the reform. The general strike was called in response to it. The nine-day AIMA shutdown coincided with it. The political cost of pushing the bill was enormous, and the legislative outcome is zero.

For workers, the defeat means the current rules stay in place. Fixed-term contracts remain at two years. Outsourcing restrictions after collective layoffs remain. Reinstatement rights after unfair dismissal are unchanged.

For expats and employers, the practical impact is straightforward: the labour rules you've been operating under haven't changed. Whether the government brings back a revised version, negotiates directly with the unions, or abandons the effort entirely depends on how much political energy Montenegro has left.

President Seguro's veto threat proved unnecessary. Parliament did the work for him.

Bottom line: The labour reform bill is dead. The labour market is unchanged. The political damage is done. And the question the bill was trying to answer remains open.

⚡ QUICK HITS

Iran reclosed the Strait of Hormuz yesterday, citing Israeli strikes on Lebanon. The Iranian military declared the strait shut on Saturday. US Central Command disputed the claim, saying commercial traffic continues to flow. The reality is somewhere between the two: shipping slowed sharply, insurance costs spiked, and the fragile ceasefire agreement signed earlier in the week is unravelling. For Portugal, the impact is the same either way. Fuel prices go up. Jet fuel gets scarcer. The energy crisis that has been running since March is not over.

New research says economic growth and low supply explain Portugal's house prices. Interest rates are barely a factor. A study reported earlier this week challenges the assumption that cheap borrowing drove the property boom. The real drivers: sustained economic growth and chronic undersupply of housing stock. If the research is right, the ECB raising rates won't cool the market. Only building more homes will.

Today is the summer solstice. The longest day of the year. The sun rose before 6:15 this morning and won't set until after 9pm. Nearly 15 hours of daylight in a city that lives outdoors. The terraces are full. The parks are full. The river is golden from 7pm onward. Linkin Park play Rock in Rio tonight at Parque Tejo. The Tchaikovsky piano concert at the Belém Tower gardens starts at 8:30 and is free. Summer officially begins.

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🍽️ SPOT OF THE DAY

PASTÉIS DE BELÉM (BELÉM)

It's the summer solstice. Nearly 15 hours of daylight. The longest day of the year. And the best way to start it hasn't changed since 1837.

Everyone in Lisbon knows about Pastéis de Belém. Most expats have walked past it, seen the queue stretching down Rua de Belém, and kept walking because they assumed it was a tourist trap. It isn't. The queue is real because the pastéis are real, and there is no substitute anywhere in the city.

In 1834, Portugal's liberal revolution shut down every monastery in the country. The monks at the Jerónimos Monastery in Belém, left without income, began selling sweet pastries from a small shop next door. By 1837, the recipe was formalised and the bakery was open. 189 years later, the recipe has never changed. It has never left the building. Only six master confectioners know it at any given time. They work in the "Oficina do Segredo" (the Secret Shop), behind a locked door, producing over 20,000 tarts every single day.

The pastéis are made fresh continuously. The shell is thinner and crispier than anything you'll find elsewhere. The custard is slightly saltier and less sweet than the pastéis de nata sold across the rest of the city. Cinnamon and icing sugar are on every table. You apply both. You eat them warm.

What most people don't know: the queue outside is for takeaway. There is a separate entrance for dine-in. And behind the front counter, the building opens into a rabbit warren of tile-clad dining rooms with over 1,000 seats spread across multiple spaces. Most visitors have no idea these rooms exist. On a Sunday morning, you can walk past the queue, enter through the dine-in door, sit in the back rooms under the azulejo tiles, and eat your pastéis in peace while the queue outside wonders where you went.

The legal distinction matters to locals: the pastries here are called "Pastéis de Belém" (trademarked). Everywhere else in Portugal, they are "pastéis de nata." Same idea, different recipe, different name.

→ 189 years. The same recipe. Over 1,000 seats most people don’t know about. Find them here ←

Belém, on Rua de Belém, next to the Jerónimos Monastery.

Insider tip: Skip the takeaway queue. Walk to the dine-in entrance. Ask for a table in the back rooms. Order two pastéis and a bica. Dust with cinnamon and icing sugar. Eat them warm. Under €4 and worth every cent.

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