Both the legislation and case law in Brazil are quite restrictive as regards vacation, which is considered a matter directly related to the workers' health, safety and well being.
Under the current Brazilian legislation, every employee is assured 30 days' vacation at each 12 months of work (the so-called "earned vacation time"). The employee's vacation is paid and further to the remuneration for the vacation period, an allowance equivalent to 1/3 of the vacation pay is also due to employee.
At the end of the earned vacation time (12 months), employer must grant vacation within the 12-month period following the date the employee earned vacation (called grant period).
"Grant" should be construed as "permission for employee to take vacation effectively", whereas its mere replacement by payment in cash is not allowed. In fact, vacation cannot be converted into payment (in lieu of vacation) except upon employee's request, and even in such case, only 1/3 vacation may be converted.
Another restriction imposed by the Brazilian law is that as a rule, individual vacation be enjoyed in one single period, fractionation prohibited.
The law provides for only two events allowing fractionated vacation. The events are: vacation shutdown and exceptional cases. The law did not define what could be deemed an "exceptional case", making it quite difficult to classify an event within the "exceptional case" concept that allows fractionation.
Even in cases where fractionation is allowed by the legislation, vacation may be fractionated into two periods at most, each one never shorter than 10 days, whereas for employees under 18 and above 50 years of age no fractioning is allowed.
Further even where vacation fractioning is provided for in a collective labor agreement, the Labor Courts trend to deem the clauses allowing fractioning invalid, as vacation represents a matter of worker's hygiene, health and safety, guaranteed by a public policy, not affected by a collective negotiation.
All these legal restrictions are translated into difficulties for companies to reconcile compliance with the law with the business dynamics and the will of employees themselves, who several times request vacation fractionation, so that their vacation coincide, for instance, with those of their spouses or their children's school vacation, or just because they believe that taking vacation more than once a year would restore energy more effectively.
Although the non-legal standpoint has several arguments supporting the advantages that a higher flexibility as regards vacation would bring to workers and the companies, in view of the current legislation the recommendation is to strictly comply with the restrictions set by the legislation. The failure to comply with such restriction has not only financial effects (requirement to pay double vacation and 1/3 allowance, for failure to grant vacation within the applicable period period, full payment of fractionated vacation, as if no day had been taken) but also involve the Labor Ministry's issuance of notices of violation and commencement of an investigation procedure by the Labor Public Prosecutor's Office, which on identification of any irregularity, may file a public-interest action against the company and even seek compensation for collective moral damages.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.