Brazil: Labor Aspects: Oil Industry Work System According To The Brazilian Legislation

Last Updated: 29 December 2015
Article by Renato Canizares and Marcus Brumano

Over the past two decades, the Brazilian oil industry had a significant development, mostly due to the extraction of oil from the pre-salt layer in the past years. In view of such vertiginous growth, the analysis of the Brazilian specific labor legislation applied to employees of the oil industry became more relevant, as all companies in this area must comply with it.

In this sense, further to general labor rights provided to employees in Brazil, these companies have to abide by Federal Law 5,811, enacted in 1972, which rules the work system and the rights of all employees directly working in activities related to (i) oil prospecting, (ii) oil drilling, (iii) oil production and refining, (iv) shale production, as well as (v) petrochemical industry and (vi) the industry of oil and by-products transportation through pipelines.

In regard to the rules provided for in Law No. 5811/72, it is important to highlight the following:

1. Work Shifts: Employees will work eight-hour shifts whenever such procedure is essential to the continuity of the company's operations. A twelve-hour shift system may be adopted only in the following special situations: (i) offshore oil exploration, drilling, production and transfer; or (ii) onshore oil exploration, drilling and production in remote or difficult-to-access areas.

For purposes of assuring the regularity of operations, or to meet industrial safety requirements, employees may be required to remain at or near the worksite during meals or rest breaks, as long as the employer provides double payment for suppressed rest and meal breaks.

During the period the employees work eight-hour shifts, they will be assured the following rights: (i) extra pay for night work (article 73 of the Consolidated Labor Laws (CLT)); (ii) double payment for suppressed meal or rest breaks; (iii) free meals at the worksite during their work shift; (iv) free transportation to the worksite; (v) a rest break of 24 consecutive hours after each three-day work shifts.

The only difference for those employees working 12-hour shifts is that, in addition to the labor rights mentioned above for eight hour shifts, they will be assured free collective lodging, and their rest break will be equivalent to 24 consecutive hours after each work shift.

2. Stand-by shifts: Further, whenever essential to the continuity of the company's operations, employees developing certain activities may remain standing-by, i.e., remain available for a 24-hour period to provide assistance to regular activities or fulfill occasional operational needs.

For each stand-by shift, the employee will be entitled to an additional pay corresponding to at least 20% of his/her base salary, and to a rest break of 24 consecutive hours after each 24 of stand-by hours. Further, the granting of mentioned 24-hour rest breaks releases the employer from the obligation to pay the weekly rest provided for in Law No. 605/1949.

Whenever called to work during a stand-by shift, or assigned to stay at the work site on stand-by, the employee may "effectively" work for a maximum of 12 hours, and will be entitled to (i) free meals on the worksite during their work shift; (ii) free transportation to the worksite; and (iii) free collective lodging.

One of the most important rules comprising the work schedule of employees in such activity is that employees assigned to 12-hour shifts or on stand-by for a 24-hour period cannot remain in such condition for more than 15 consecutive days; thus, in such events, a rest schedule must be set to guarantee that employees can rest for the respective period they remained working.

3. Changes in the work schedule regime: Whenever the work schedule regimes above are changed on employer's initiative, with the consequent decrease or suppression of the advantages granted to the employee by Law No. 5811/72, the employee affected by said change will be entitled to be compensated for it.

This compensation will correspond to the average of the advantages established in the aforementioned law and received by the employee during the 12 months prior to the change, for each year or fraction thereof equal to or higher than six months during which the employee worked in such 12 hours-shifts or remained on stand-by.

Lastly, even though not provided for in Law No. 5811/72, it is very common to have employees in such activities exposed to dangerous working conditions, what calls for an examination of the general legislation on this matter.

According to article 193 of the Brazilian Consolidation of the Labor Laws, dangerous activities or operations, under the regulation approved by the Ministry of Labor and Employment (MTE), are those which, owing to their nature or the work method, comprise permanent contact with flammables, explosives or electric energy under highly risky conditions. A list of such dangerous activities and operations may be found in Appendices 1 and 2 to Regulatory Standard (NR) No. 16 of the Ministry of Labor.

Any employee working under dangerous conditions is entitled to the payment of an additional allowance equivalent to 30% of his/her base fixed salary.

In view of the above, specifically in what concerns the oil industry, as the activities of employees directly working with oil prospecting, drilling, production and refining most of the times fit the definitions of dangerous work provided by the applicable legislation, such additional pay may be due to such employees, mainly in what concerns those working on offshore oil platforms.

Notwithstanding, there may exist situations in which the employees' working conditions do not represent any exposure to dangerous situations, and consequently do not trigger the obligation for paying the risk premium (for instance, employees working onshore, away from flammables or explosives, or those who are not frequently exposed to dangerous conditions) so it is important to have a detailed analysis of each  employees' workplace and conditions to be sure that the company is compliant with the applicable laws.

Due to the specificity of the legislation above, it is not rare to have cases of excess working hours, lack of a regular remunerated weekly break, or lack of payment of labor rights provided above. Further, the applicable collective bargaining agreements usually set additional rules that supplement the ones above, for what it is always recommendable to conduct a managerial study seeking a better engagement towards the rules to be followed in activities related to the oil industry.

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.

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