Companies have been using the temporary work, only kind of "manpower assignment" legally allowed in Brazil, since the publication of Law 6,019 in 1974, which regulated the subject.
However, the very restricted situations where it could be used, added by the briefness of said law, resulted in many misuses of this legal arrangement. Consequently, some companies were fined by the Labor Ministry due to irregular hiring of temporary workers, others were subject to investigation procedures and Public Interest Actions by the Labor Prosecution Office – MPT, and many companies had employment relationships with the temporary workers acknowledged by the Labor Courts.
According to Law 6,019/74, the temporary work is allowed only when made by specific companies enrolled at the Labor Ministry as "Temporary Work companies", and only in two specific situations: (i) temporary need for personnel in the face of times of excessive services (for instance, temporary increase of work in stores in the end of the year); or (ii) temporary replacement of regular employees (such as due to vacation, sick or maternity leave).
Also, law established that an agreement entered into between the temporary work firm and its clients involving the a same temporary worker cannot exceed 3 months, renewable, whereas said renewal is conditional on previous authorization by the Labor Ministry.
Until recently, there was no parameter about for how long this renewal could be established, as well as the conditions allowing this renewal. In practice, any solicitation to renew the temporary work agreement was accepted by the Labor Ministry, and the renewal was always for a standard three (3) months period.
The scenario above created problematic situations, as such when an employee was on maternity leave for more than six (6) months, i.e., a same temporary worker would not be able to substitute the regular employee for the whole period. Using more than one temporary worker to replace the same employee is not efficient, because companies would have to train another temporary worker for the position, it would take time until the new temporary worker is acquainted to the company, etc.
In view of the problems presented, Labor Ministry published the Ordinance 789 of June 02, 2014 (effects as from July 1st), which allowed to execute temporary work agreements for up to or nine (09) months – in case of replacement of regular employees, or up to six (06) months – if the cause for the temporary work is the excessive service.
Besides enlarging the term of a temporary work agreement, the Ordinance allowed that this longer term is set at the original hiring if it is already known that the three (3) months provided for in law will not be enough. The hiring for more than three (3) months or the renewals resulting in agreements for more than three (3) months shall be requested to the Labor Ministry by the Temporary Work Company, with an antecedence of at least five (days), and presenting documents and statements supporting the request.
Later, Labor Ministry issued the Normative Instruction 18 of November 07, 2014, presenting further details and clarifications about the requesting to execute or renew the temporary work agreement for more than three (3) months, and also presented some definitions to what is considered "excessive services", and "replacement of regular employees", as well as the possibility of the same temporary worker replacing more than one employee of the company (for instance, three months of work from a same temporary worker, replacing three employees who subsequently enjoyed vacations).
The recent regulation by the Labor Ministry brought new perspectives to the temporary work situation in Brazil: on the one hand, companies will have more legal certainty, since Law 6,019/74 was very brief on its definition, leaving many situations to inspectors or judges' interpretation. On the other hand, the practice of using temporary work will have to be reviewed by companies, since so far the lack of regulation resulted in almost automatic authorization of renews by the Labor Ministry.
In view of the above, considering the regulation of the temporary work and the fact that Labor Courts' understanding is strict in relation to outsourcing, we believe Labor Ministry's inspection regarding temporary work will become more frequent, and that the analysis of the request for hiring and renewing temporary workers will become more careful.