Brazil: Main Points Of The Brazilian Labor Reform

Negotiation with the Union prevailing over the Law

Companies can negotiate with the Union of employees several matters, such as reduction of salary with job stability, working hours, remuneration based on productivity, among others. Health and safety matters and the rights established by Federal Constitution cannot be freely negotiated. This provision aims at creating a safer environment for collective negotiations, which will prevail over any possible law on the same matter.

Working hours

  • Commute hours are extinguished, i.e, the time from home to work by transportation granted by the employer due to the lack of public transportation will not be considered part of working hours as it is currently.
  • Bank of hours limited to 6 months can be implemented through individual agreement rather than through collective bargaining agreements. If the offsetting of hours occurs within the month, it is possible to be a non-written agreement.

Telecommuting – Home Office

The terms and conditions of Telecommuting must be established in the labor agreement, including the regulation about equipment, expenses, health and safety prevention measures. Labor Reform classifies a Telecommuting employee as not entitled to control of working hours and overtime payment.

Intermittent work

Employers may hire employees to work for specific hours, days or months.

Vacation

Currently, as a general rule, vacation must be taken by employees in only one period. According to the Labor Reform, employees will remain entitled to annual 30 day paid vacation, however, the vacation period can be taken in up to 3 periods. One of the period must not be shorter than 14 days and the others cannot be shorter than 5 days.

Premium

Premiums, even if paid on habitual basis, will not be part of the employees´ salary, thus not subject to labor and social security charges. Premiums are any discretionary payment made to an employee or group of employees due to outstanding performance.

Equal pay for equal work

Labor Reform establishes several changes in the rules related to equal pay for equal work. As an example, to be entitled to the same pay, the compared employees should work in the same branch. Currently, employees working in the same city, even in different branches, are entitled to request equal pay for equal work.

Pregnant employees

Pregnant employees must not work in hazardous conditions if her doctor states so. If there is no way for the employee to perform the activities in a non-hazardous workplace, she should be on maternity leave.

Employees' representative

Companies with more than 200 employees must have a committee composed of representatives elected by employees, as follows:

  • more than 200 and up to 3000 employees: 3 representatives.
  • more than 3000 and up to 5000 employees: 5 representatives.
  • more than 5000 employees: 7 representatives.

The mandate will be for 1 year and the representative will have job stability as of the candidacy until 1 year after the end of the mandate.

Termination of employment relationship

  • Termination by mutual agreement: this is a new type of termination and the mandatory severance is reduced in comparison to a termination without cause. The prior notice and indemnification based on the severance fund known as FGTS are reduced by half and the employee will be entitled to withdraw 80% of the FGTS balance.
  • Mandatory severance must be paid in 10 days and there will no longer be the need to validate the termination by the Union.
  • Mass dismissal will not require prior negotiation with the Union as has been demanded by courts.
  • PDV – Voluntary dismissal plan implemented under Union negotiation can establish a full release of the relationship.

Alternatives for resolution of conflicts – arbitration, validation of private release agreements by courts, negotiation and annual release

Arbitration and validation of out of court settlements were not accepted by labor courts, as employees were not allowed to waive labor rights.

As of the effectiveness of the Labor Reform, employees receiving a monthly salary higher than approximately USD 3,300 and holding a university degree can agree to arbitration and may freely negotiate with the employer their labor conditions, without the assistance of the Union. In addition, courts can validate private settlements, which will definitely close any further judicial discussions.

It will be possible to obtain a release of labor obligations on an annual basis from the employee with the assistance of the Union.

Union Contribution

Employees and employers in Brazil are mandatorily represented by a Union and they must pay a mandatory annual Union contribution. Labor Reform establishes that the annual Union contribution is optional. Therefore, the Union contribution of employees which is equivalent to 1 day of salary in March every year will depend on a prior and expressed authorization from the employee.

Outsourcing

Despite a law enacted in March, 2017 established the possibility to outsource the core business, there have been different interpretations per our Courts and scholars.

Labor Reform closes the discussion since it expressly allows outsourcing of core business.

In addition, it establishes a quarantine of 18 months for engaging outsourcing companies created by former employees or hiring of ex-employees through outsourcing companies.

Moral damage indemnification

Labor Reform establishes that moral damage indemnification should be classified based on the seriousness of the damage: light, medium, serious and extremely serious. The amount of the indemnification will be limited to 3, 5, 20 or 50 times the last monthly salary, respectively.

Attorney fees

Currently, the parties in a labor claim are not required to pay attorney fees to the other party. Labor Reform establishes that the losing party should pay attorney fees to the other party in an amount from 5% to 15% of the condemnation or economic benefit.

Certain aspects of the new law, such as intermittent work, work of pregnant employees in hazardous conditions and the parameters for moral damage indemnification may still be changed in the future by specific regulation.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions