Brazil: Legal Insecurity In The Application Of Brazilian Labor Reform

Since the beginning of the Labor Reform (Law no. 13467/17), there has been a great deal of instability and legal uncertainty regarding its practical application in Brazilian life.

The Provisional Measure no. 808/2017 ("MPV 808/17"), published on November 14th, 2017, brought several important changes and additions, but lost its validity on April 23rd, 2018, remaining the gaps in the Labor Reform Law.

In an attempt to guide unsolved issues of the Reform, the Attorney General's Office (AGU) issued on May 15th, 2018, Opinion No. 00248/2018, providing that the new provisions, brought by the Labor Reform, should be applied to all contracts in force, including those which were executed before the implement of the Labor Reform, in past November.

The new Opinion defines that the Reform cannot be applied retroactively, not being valid for contracts terminated before the approval of Law No. 13.467, on November 11th, 2017. In relation to contracts still in force, however, the text defines the " general, comprehensive and immediate" application of the new rules.

In continuity with the measures aimed at filling the gaps of the Labor Reform, the Ministry of Labor and Social Security issued Ordinance no. 349 ("Ord. 349/18").

In order to maintain the changes brought by MPV 808/17, no longer in force, Ord. 349/18 reissued some provisions of MPV 808/17 that regulated the hiring of self-employed workers, the intermittent work contract, the tips and the representative committee of employees.

However, these measures do not provide the legal certainty necessary to standardize and regulate the Labor Reform.

On this matter, ANAMATRA (National Association of Magistrates of Labor Justice) has already manifested itself in relation to Opinion 248/18 stating that:

"(2) Anamatra defends the technical independence of all labor judges, and it is up to the jurisprudence of the courts to consolidate the majority view of the Magistracy of Labor on Law No. 13.467/17, which will only occur in the course of time . (...) "

The same understanding also extends to Ord. 349/18, which is intended to guide the work of the judges, but which, because it is an administrative act, does not have its legality confirmed.

Still in this scenario of instability, the Committee of the Superior Labor Court, formed to regulate Law No. 13.467/2017, proposed an instruction. According to the document, the application of the Labor Legislation's procedural norms that have been modified or added by Law No. 13.467/17 is immediate, but the changes should not reach "past or consolidated situations under the aegis of the repealed law."

There is, therefore, a great deal of instability and legal uncertainty for the application of Law No.13.467/17, which, although brought many innovations to labor law, has left several gaps that prevent these innovations from being implemented definitively and safely.

Check out the changes brought by Ordinance 349/18:

AUTONOMOUS

  • Once all legal formalities have been complied with, the hiring of the self-employed person, with or without exclusivity, continuously or not, removes the status of employee, as long as legal subordination is absent (which entails recognition of employment relationship).
  • To the self-employed person is guaranteed the possibility of refusing to perform the activity demanded by the contractor, guaranteed the application of a penalty clause, if foreseen in the contract.
  • Drivers, commercial representatives, real estate agents, partners and workers of other professional categories regulated by specific laws related to activities compatible with the autonomous contract, provided they comply with all legal formalities, will not have the status of employee set forth in art. 3 of the Labor Code (CLT).

INTERMITTENT WORK

  • It is considered intermittent work the provision of services with legal subordination, not continuous, with alternation of periods of service and inactivity, depending on the type of activity of the employee and the employer.
  • Every 12 months, the employee acquires the right to enjoy, during the next 12 months, 1 month of vacation, during which he/she cannot be called to provide services by the same employer.
  • The contract must be written and registered in the labor booklet (CTPS), and should contain:

    • identification, signature and domicile of the parties;
    • 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 that of daytime and observing the provisions of § 12; and
    • the place and payment term of the remuneration.
  • The employee, after prior agreement with the employer, can enjoy his vacation in up to 3 periods. In the event that the call period exceeds one month, the payment of the due installments, such as remuneration, weekly rest paid, legal additional, proportional vacations with a one-third bonus and the pro rata 13th salary cannot be stipulated for a period longer than one month, and must be paid by the 5th business day of the month following the month worked.
  • The parties shall be entitled to agree, through the intermittent employment contract, the places of service, the shifts to which the employee will be called to provide services, and the forms and instruments of convocation, as well as the response to the call.

PERIOD OF INACTIVITY – INTERMITTENT WORK

  • The period of inactivity is considered to be the time interval distinct from that for which the intermittent employee was called and has rendered services, in accordance with the terms of §1, art. 452-A, from the Labor Code.
  • During this period, the employee may provide services of any nature to other contractors, whether or not they engage in the same economic activity, using an intermittent work contract or other type of hiring.
  • In the intermittent employment contract, the period of inactivity will not be considered time available to the employer and will not be remunerated, as long as there is no remuneration for time available in the period of inactivity.

SEVERANCE PAYMENT AND PRIOR NOTICE – INTERMITTENT WORK

  • Severance payment and prior notice will be calculated based on the average of the amounts received by the employee in the course of the intermittent employment contract. The calculation shall take into account only the months during which the employee has received remuneration installments within the last 12 months or the period of validity of the intermittent employment contract, whichever is shorter.

SOCIAL AND SEVERANCE INDEMNITY FUND CONTRIBUTIONS – INTERMITTENT WORK

  • The employer will pay for their own and for the employee's social contributions, as well as the deposits of the FGTS, based on the amounts paid in the monthly period and will provide the employee with proof of compliance with these obligations.

TIPS

  • The companies will note in the labor booklet of their employees the fixed salary and the average values of the tips for the last twelve months.

REPRESENTATION OF EMPLOYEES

  • The employees' representatives committee shall not replace the union's role of defending the collective or individual rights and interests of the category, including in judicial or administrative matters, in which case the participation of unions in collective bargaining shall be mandatory.

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
Marília Chrysostomo Chessa
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