Dozens of flights and trains have been cancelled, schools closed and hospital operations postponed in cities across Portugal, as the two main union federations stage a general strike over unprecedented labour reforms.

Public transport was down to a minimum service in many areas, and unions said refuse collections were at a standstill as the strike took hold on Thursday.

The last time the CGTP and the generally less militant UGT joined forces was during the eurozone debt crisis in 2013, when a troika of international institutions demanded cuts in salaries and pensions as part of Portugal's bailout.

Twelve years later, Portugal's economy has become the fastest growing in the eurozone in recent months, but Prime Minister Luís Montenegro says it is still necessary to tackle rigidities in the labour market so companies can be more profitable and workers have better salaries as a result.

I will not give up on having a country with the ambition to be at the forefront, to be at the vanguard of Europe, he said on the eve of the strike.

However, Montenegro appears to have been taken aback by the strength of feeling against his minority right-of-centre government's plans: one of his Social Democrat MPs is on the UGT executive and even he voted for a strike.

The prime minister tweaked some proposals after calling the federation in for talks late last month, but it was clearly not enough.

Among the most controversial of the more than 100 proposals are: letting employers roll over temporary contracts for years on end; lifting a ban on sacking workers then immediately rehiring them indirectly via outsourcing; and removing a requirement to reinstate employees who were unfairly dismissed.

It is Portuguese in their 20s who are likely to be most affected by the changes - and opinion is rather mixed.

Diogo Brito, who works as an air steward but has friends who do casual work in tourism, supports the right to strike but backs the package: It has to be done. We have to catch up with richer countries and with these measures I think we can evolve more. But self-employed photographer Eduardo Ferreira says he knows many people who already cannot find secure jobs and is pleased to see the unions unite at a critical moment for Portugal: Things have been tough ever since the troika, and workers haven't reacted until now.

The CGTP has condemned the package as an assault on the rights of all workers, particularly women and young people, while the UGT calls it so out of step, in a context of economic growth, financial stability and a strong labour market, that… it reflects a clear bias in favour of employers.

Montenegro's governing coalition lacks a majority in parliament and is seeking support for the bill not only from the small, free-market Liberal Initiative (IL) but also from hard-right Chega.

The issue has also become caught up in the campaign for January's presidential election, with several candidates arguing that the labour reform bill flouts Portugal's 1976 constitution.

With the government seeking to overhaul so much of the labour code, such scrutiny might stoke voter unease about its radicalism, particularly since the plans were not in the coalition's election manifesto.