The bill is likely to pass in parliament with support from far-right party Chega.
The union told Reuters that around 100,000 protesters filled Lisbon’s main avenue, while the Associated Press also reported tens of thousands of people were present. No police estimate was available.
Speaking at the protest, Miriam Alves, 31, a worker at a medical device company, told Reuters that reforms are “clearly a step backward in working conditions and could lead to a complete lack of job security”.
Archive technician Madalena Pena, 34, said the government was reversing labour rights “in an unfair, subtle, and cunning way, without having said anything before the election” in May.
CGTP general secretary Tiago Oliveira announced the strike for next month at the protest.
On the proposed changes, he said: “If implemented, it would be a real setback in the lives of each and every one of us.”
Protesters also wanted higher wages. Official data shows more than 50% of workers earned less than 1,000 euros (£879) per month last year. The minimum wage is only 870 euros (£764).