Brazil: Labor Reform Effectiveness And The Provisional Measure 808/2017

On November 11, 2017, the Labor Reform entered in force, by means of Law 13467/2017, which aims to promote the update of the Brazilian Labor Code ("CLT"), enacted in 1943.

In addition to the changes brought to affect more directly the material law, it was also promulgated the Provisional Measure 808/2017, which amended 17 articles of labor reform, providing for intermittent and autonomous work, representativeness in the workplace, working conditions for pregnant and lactating women and the 12×36 work shift, among others.

See bellow all the changes:

ECONOMIC GROUP

Before the Labor Reform

- It's considered an economic group whenever one or more companies – even though each company has its own legal personality – are under the direction, control or administration of another company, constituting an industrial, commercial or other economic activity group.

- Those companies are jointly and severally liable for the main company and each subordinate company.

After Labor Reform / Provisional Measure 808/2017

- It will be considered an economic group whenever one or more companies, each having its own legal personality, are under the direction, control or administration of another, or even when, even though each one is autonomous, they belong to an economic group.

- It does not characterize an economic group as a mere identity of members, and it is necessary, for the configuration of the group, to demonstrate integrated interest, effective communion of interests and joint action of its member companies.

- The retiring partner will be subsidiary to the company's labor obligations relating to the period in which he was a partner.

- The retiring partner will only be jointly and severally liable with the others, when fraud in the corporate change is proven.

PAID HOLIDAYS

Before the Labor Reform

- In Brazil, any worker has the right to 30 days of paid holidays per year. Such holidays can be annual, but only in exceptional cases will the holidays be granted in 2 periods, one of which cannot be less than 10 consecutive days

After Labor Reform / Provisional Measure 808/2017

- As long as there is the acquiescence of the employee, the holidays can be enjoyed in up to 3 periods, one of which cannot be less than 14 consecutive days and the rest cannot be less than 5 running days, each.

BANK OF HOURS

Before the Labor Reform

- Employees may be dispensed of the increase in their salaries if, under a written agreement or collective bargaining agreement, assisted by the Union. The excess hours worked get compensated by a corresponding decrease in another day. But the accumulated hours cannot exceed the sum of hours worked per week, in the maximum period of one year, or exceed the maximum limit of ten accumulated hours per day.

After Labor Reform / Provisional Measure 808/2017

- Can be adjusted by individual agreement;

- Compensation of extrapolated hours should be carried out within a maximum period of 6 months

TIME AT COMPANY'S DISPOSAL

Before the Labor Reform

- The time that the employee is available to the employer will be counted as effective work.

After Labor Reform / Provisional Measure 808/2017

- They will not be counted as time available, when the employee, by his own choice, choose to stay in the company's premises, as well as entering the company's premises to perform particular activities, among others: Religious practices; Rest; Recreation; Study; Feeding; Social relations activities; Personal hygiene; Changing clothes or uniforms.

PART TIME JOB

Before the Labor Reform

- It is considered part-time work, the work, whose maximum duration, does not exceed 25 hours per week.

After Labor Reform / Provisional Measure 808/2017

- It's considered part time job the work that the maximum duration does not exceed 30 hours per week, without the possibility of additional weekly hours, or even the work that the duration does not exceed 26 hours per week, with the possibility of adding up to 6 additional hours per week.

- Payment of overtime with an increase of 50% over the normal time value.

- The overtime hours of the normal working day may be compensated up to the week immediately following its execution or its acquittance must be made on the payroll of the subsequent month if they are not compensated.

12X 36 WORKING SCALE

Before the Labor Reform

- The employee works on a shift for 12 hours and has a period of 36 hours for rest before the next working shift of 12 hours starts. There was no regulation in CLT, so the terms are established by the companies and the Unions in Collective Agreements or Collective Bargaining Agreements.

- Precedent 444, from the TST, emphasizes that the validity of the scale in comment should be exceptional, when foreseen in Law, Collective Bargaining Agreement or Collective Agreements. In addition, the Precedent states that national holidays should be paid in double.

After Labor Reform / Provisional Measure 808/2017

- The 12 × 36 scale day will be conceded to the parties, by means of Collective Bargaining Agreement or Collective Agreement.

- The monthly remuneration covers the payments due for weekly paid rest and rest during holidays, and holidays and night work extensions will be considered compensated.

- It will be possible for the entities working in the health sector to establish, by means of Individual Agreement, Collective Bargaining Agreement, or Collective Agreement, the 12 × 36 scale day.

REGULAR OVERTIME

Before the Labor Reform

- Precedent 85, of the TST, provides that the provision of regular overtime deprives the agreement for compensation of working hours. Therefore, the hours that exceed the normal weekly working hours must be paid as overtime and, in the case of those destined for compensation, only the additional hours for extra work should be paid.

After Labor Reform / Provisional Measure 808/2017

- The provision of usual overtime does not deprive the agreement for compensation of working days and the bank hours.

- The wages will include payments due for weekly paid rest and rest during national holidays.

- National holidays and night work extensions will be compensated.

- Employees submitted to this scale won't need authorization to work in an unhealthy environment.

BREAK WITHIN THE WORKING DAY FOR MEAL AND REST

Before the Labor Reform

- Brazilian labor law states that for those who work more than 6 hours, there will be a break for lunch and rest of minimum 1 hour and maximum 2 hours. The non-granting or partial concession of the minimum period for this break, for both urban and rural employees, implies the total payment of the corresponding period and not only the term suppressed, with an increase of at least 50% over the value of the wage of normal working hours.

After Labor Reform / Provisional Measure 808/2017

- Failure to grant or a partial concession of the minimum break for meals and rest to urban and rural employees implies payment of an indemnity only for the period that has been suppressed, with an increase of 50% over the normal value paid per working hour.

INTERMITTENT EMPLOYMENT AGREEMENT

Before the Labor Reform

- There is no regulation by CLT.

After Labor Reform / Provisional Measure 808/2017

- It is considered intermittent work the service agreement with legal subordination, not continuous, with alternated periods of service and inactivity, depending on the type of activity of the employee and employer.

- Every 12 months, the employee acquires the right to enjoy, during the next 12 months, one month of paid holidays, during which period he can not be called to provide services by the same employer.

- The contract of employment shall be written and registered in CTPS, and shall contain:
– identification, signature and domicile or location of the parties;
– the value of the hour or day of work, which may not be less than the hourly or daily value of the minimum wage, ensuring the remuneration of night work exceeding the daytime remuneration and observing the provisions of § 12; and
– the place and time limit for payment of the remuneration.
– The maternity salary will be paid directly by the Social Security.

- In the intermittent employment contract, the period of inactivity will not be considered time available to the employer and will not be remunerated.

- After the term of one year without any summons of the employee by the employer, counted from the date of the conclusion of the contract, the last call or the last day of service rendering, whichever is the later, the contract of intermittent work will be considered terminated.

- Termination fees and advance notice shall be calculated on the basis of the average (only the months in which the employee received salary payments within the last 12 months) of the amounts received by the employee.

- Except the assumptions referred to in art. 482 and art. 483, in the event of termination of the intermittent employment contract shall be due the following severance pay:
– by half:
a) the indemnified prior notice, calculated according to art. 452-F; and
b) the indemnification on the balance of the Fund of Guarantee of Time of Service – FGTS; and

– in full, the other labor sums.

The termination of an intermittent work contract allows the movement of the worker's linked account in the FGTS, limited to up to eighty percent of the value of the deposits.

Until December 31, 2020, an employee hired under an employment contract for an indefinite term dismissed may not provide services to the same employer through an intermittent employment contract for eighteen months, counting from the date of dismissal of the employee.

HOURS IN ITINERE (TIME DISPENDED BY EMPLOYEE BETWEEN HOUSE-WORK AND WORK-HOUSE)

Before the Labor Reform

- The hours spent by the employee will be computed in the working day if it is difficult to reach, or not served by public transport and the company provides the driving.

After Labor Reform / Provisional Measure 808/2017

- The time spent by the employee will not be computed in the working day.

HOMEOFFICE

Before the Labor Reform

- There was no regulation by CLT.

- Only paragraph 1 was added to art. 6, of CLT, to insert a legal subordination, meaning that the the telematic and computerized means of command, control and supervision are assimilated, for finances of legal subordination, means of transport and direct command, control and supervision of the work of others.

- The employee who works from home, as home office, must have his work day controlled, as long as there are technological means to exercise such controls.

After Labor Reform / Provisional Measure 808/2017

- The provision regarding the telework services must be expressly on the employee's employment contract.

- A written contract will be provided, such as the provision of maintenance services or supply of technological equipment, necessary infrastructure and reimbursement of expenses. Such utilities, when the employee's compensation is integrated.

- The employer will be responsible for the safety instruments for work in order to avoid diseases and accidents at work.

- The employee will sign a term of responsibility, committing themselves to follow as instructions provided by the employer.

- There will be no control of the working hours spent by the employees.

REMUNERATION

Before the Labor Reform

- Benefits such as food allowance, travel allowances, premiums and allowances.

After Labor Reform / Provisional Measure 808/2017

- Benefits such as allowances, limited to 50% of the monthly salary, the food allowance, travel costs and premiums no longer will be part of the remuneration. Therefore, they are not accounted for in the collection of labor and social security charges;

- They integrate the salary as legal and function gratuities, and as commissions paid by the employer;

- The tips are destined for workers and distributed in accordance with the criteria of credit and classification in collective agreement or collective bargaining agreement;

- In case of termination of the collection of the tip by the company, once it was collected for more than twelve months, it will be incorporated to the salary of the employee, which will be based on an average of the last twelve months, without prejudicing what is established in a collective bargaining agreement or colletctive labor convention.

- It will be considered premiums the concessions given by the employer, up to twice a year, in the form of goods, services or cash values, to an employee, a group of employees or third parties linked to his or her activity, because of performance higher than ordinarily expected while exercising of its activities.

- There will be income tax and other taxes on the values mentioned in this article, except those expressly exempted by specific law

OUTSOURCING

Before the Labor Reform

- Precedent 331, from the TST only allows outsourcing of specialized services related to the borrower's business.

After Labor Reform / Provisional Measure 808/2017

- It is considered the service agreements to third parties for the contracting of contracting for the execution of its activities, including its main activity, the legal entity of private law providing services that offers an economic solution compatible with an execution.

- Outsourced employees will be entitled to the conditions in which they are related; Transport; Medical care; Training.

- Employee who can not provide services to the same company as an employee of the service provider before the 18-month term, counted from the date of his / her termination.

AUTONOMOUS

Before the Labor Reform

- Self-employed worker is the one who conducts his activity on his own, independently and without subordination.

After Labor Reform / Provisional Measure 808/2017

- Self-employed worker, even when exclusive and continuous, should not be considered an employee when hired according to law and when providing services to only one company.

- The company can not have an exclusivity clause in the contract of employment.

- The self-employed worker may refuse to perform activity demanded by the contractor.

- They are not considered autonomous: drivers, commercial representatives, realtors, partners, and workers of other professional categories regulated by specific laws related to activities compatible with the autonomous contract.

UNHEALTHY CONDITIONS OF WORK FOR PREGNANT WOMEN

Before the Labor Reform

- It's ensured to a pregnant or lactating employee that works under unhealthy conditions the removal, regardless of the degree of unhealthiness, during pregnancy and lactation, from activities, operations or places, and must carry out their activities in healthy places.

After Labor Reform / Provisional Measure 808/2017

- The pregnant employee who engages in unhealthy operations or places while she is pregnant will be removed from her activities to work in a safe environment.

- The pregnant woman may work in unhealthy environments in medium or minimum degree, when she – voluntarily – presents a health certificate, presented by a doctor of her confidence, authorizing that she stays at the place of her activities.

EMPLOYEE SEVERANCE INDEMNITY FUND – "FGTS"

Before the Labor Reform

- In the employment relationship, the employee will only be entitled to the FGTS, in case of dismissal without cause by the employer, also being entitled to a 40% fine.

After Labor Reform / Provisional Measure 808/2017

- In the employment relationship, the employee will withdraw the FGTS, in case of dismissal without just cause by the employer, being entitled to the payment of the 40% fine.

- The employment contract may be terminated by common agreement, when the employee will be entitled to 20% of the FGTS fine.

EXTINCTION OF THE JOB CONTRACT BY MUTUAL AGREEMENT

Before the Labor Reform

- There is no regulation by CLT.

After Labor Reform / Provisional Measure 808/2017

- Termination of the employment contract is allowed when there is "common agreement- between the company and the employee. In this case, the employee is entitled to receive half the amount of the prior notice, but won't receive unemployment insurance.

MASS LAYOFFS

Before the Labor Reform

- Due to jurisprudential construction, mass layoffs without negotiation with the category union is prohibited.

After Labor Reform / Provisional Measure 808/2017

- Individual or collective unmotivated dismissals are equipped for all purposes, and there is no need for prior authorization by a trade union or a collective agreement or collective bargaining agreement for its effectiveness.

RATIFICATION OF TERMINATION EMPLOYMENT AGREEMENTS BY WORKERS UNION

Before the Labor Reform

- In the event of a request for resignation, the receipt of the termination of employment contract, signed with an employee with more than 1 year of employment, will only be valid when formalized with the assistance of the respective union or the authority of the Ministry of Labor and Social Welfare .

After Labor Reform / Provisional Measure 808/2017

- There is no longer any need for assistance from the union or the Ministry of Labor and Social Security.

COLLECTIVE AGREEMENTs

Before the Labor Reform

- They will prevail over the Law, once they are most beneficial to the employee.

After Labor Reform / Provisional Measure 808/2017

- They will only prevail over the Law when they are discussing the following topics:
– Working time, observing the Federal Constitution;
– Break for meal and rest respecting the minimum limit of 30 minutes for meal and rest;
– Homeoffice/ Telework;
– To classify the degree of unhealthiness;
– Classification of the degree of unhealthiness and extension of work in unhealthy places, provided that the health, hygiene and safety standards established by law or by the Ministry of Labor are observed in full;
– Profit sharing "PLR.".

TRADE UNION CONTRIBUTION

Before the Labor Reform

- It is due to the union by all those who participate in an economic or professional category, or a liberal profession, in favor of the representative union of the same category or profession.

After Labor Reform / Provisional Measure 808/2017

- It is due to the union by all those who participate in an economic or professional category, or a liberal profession, represented by their entities, under denomination of union contribution, once its previously expressly authorized.

WAGE CONTRIBUTION

Before the Labor Reform

- The amount due as medical or dental care provided by or associated with the company, including the reimbursement of expenses with medicines, glasses, orthopedic appliances, medical and hospital expenses and similar, provided that covers all Employees and managers of the company, integrate the salary of contribution by its total value.

After Labor Reform / Provisional Measure 808/2017

- The amount related to medical or dental care, whether its for the worker or a dependent, including the reimbursement of expenses with medicines, glasses, orthopedic appliances, prostheses, orthoses, medical expenses and similar, even when granted in different types of plans And coverages, do not include the employee's salary for any purpose nor the contribution salary.

LABOR JUSTICE JURISIDCTION

Before the Labor Reform

- In the absence of legal or contractual provisions, the administrative authorities and the Labor Court will, as the case may be, decide by case law, by analogy, by fairness and other general principles and rules of law, especially labor law. , According to habits and customs, comparative law, but always so that no class or private interest prevails over the public interest.

After Labor Reform / Provisional Measure 808/2017

- Precedents and other statements of jurisprudence issued by the Superior Labor Court and the Regional Labor Courts may not restrict rights legally established or create obligations that are not provided for by law.

- The Labor Court, in the examination of the Agreement or Collective Agreement, should focus exclusively on the essential requirements of the legal business

FREE ACCESS TO THE JUDICIARY

Before the Labor Reform

- Any plaintiff who declares that they are unable to pay the costs of the proceedings is entitled to the benefit.

- It's up to the judges and presidents of the labor courts of any body may, on request or ex officio, grant free legal aid, including transfers and instruments, to those who receive a salary equal to or less than twice the legal minimum , Or declare, under the penalties of the law, that they are not in a position to pay the costs of the proceedings without prejudice to their own or their families' support.

After Labor Reform / Provisional Measure 808/2017

- The plaintiff must prove in the records that is in an economic disadvantage compared to the company and can not afford to pay the procedural costs.

- The judges and presidents of the labor courts can decide in any instance, on request or ex officio, to grant free legal services, including transfers and instruments, to those who receive a salary equal to or less than 40% of the limit Benefits of the General Social Security System.

DOMESTIC EMPLOYEE

Before the Labor Reform

- The work of the domestic employee is governed by Complementary Law No. 150/2015.

- If the domestic employer appeal from a decision, he must pay the full value of the court deposit to present the appeal.

After Labor Reform / Provisional Measure 808/2017

- The work of the domestic employee will continue to be governed by Complementary Law 150/2015.

- If the domestic employer appeal to a decision, it will be guaranteed the payment of half of the amount of the appeal deposit.

EXTRAPATRIMONIAL DAMAGES

Before the Labor Reform

- There was no regulation by CLT.

After Labor Reform / Provisional Measure 808/2017

- Extra-patrimonial damage is considered an action or omission that offends the moral or existential sphere of the individual or legal person.

- There will be considered responsible for the extra patrimonial damage those responsible for the offense against the defended legal right, in proportion to the action or omission.

- The reparation for the extra patrimonial damage may be claimed cumulatively with the compensation for material damages resulting from the same harmful act.

- The court will fix the repair to be paid, in one of the following parameters, the accumulation is forbidden:
– For offense of a light nature – up to three times the amount of the maximum benefit limit of the General Social Security System;
– For offense of average nature – up to five times the amount of the maximum benefit limit of the General Social Security System;
– For offense of a serious nature – up to twenty times the value of the maximum benefit limit of the General Social Security System;
– For offense of very serious nature – up to fifty times the amount of the maximum benefit limit of the General Social Security System.

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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Authors
Ana Lúcia Pinke Ribeiro de Paiva
Stella Neves Ferreira Piauí
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