The Brazilian House of Representatives approved on March 22, 2017 a bill of law that substantially modifies the rules of outsourcing and temporary work. The bill of law still depends on the approval of the President to come into full force and effect.
The bill of law approved by the House of Representatives authorizes the outsourcing of any activities, even those considered to be within the company's core business. It also sets forth that the contracting company should only be liable for the outsourced workers' labor obligations in case the outsourcing company is unable to pay them (subsidiary/secondary liability). The bill also clarifies that no employment relationship exists between the contracting company and the outsourced workers. In other words, the outsourcing company is the sole responsible for hiring and paying the outsourced workers, as well as directing their work.
Outsourcing in Brazil has never been regulated by law and companies rely on a precedent by the Superior Labor Court (TST) on the matter, which currently prohibits the outsourcing of the company's so-called "core business". This prohibition has caused many disputes within the labor courts, particularly on what actually constitutes a company's core business. For this reason, a significant change in labor court's precedents is expected to take place as soon as the new law comes into full force and effect.
As to temporary work, the bill extends the duration of these temporary work arrangements, which can be used to substitute permanent workers or to meet a supplementary demand of unpredictable or, when predictable, intermittent, periodic or seasonal services. If approved, companies will be able to hire temporary workers through temporary agencies for a term of up to 180 days (with an additional 90-day extension), consecutives or not.
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