Brazil has introduced new measures to assist employers managing the employment consequences of the COVID-19 crisis. This article explains.
The new employment support measures come in two Provisional Measures, MP 1,045 and MP 1,046.
MP 1,045 introduces the New Emergency Programme for Maintaining Employment and Income. It provides for measures to address the consequences of the COVID-19 public health emergency in the employment context.
MP 1,046, introduces employment-related measures to deal with the COVID-19 public health emergency.
Most of the measures were originally implemented through Provisional Measures No. 927 and 93 (the latter being converted into law 14,020/20, but there are some changes.
Emergency employment benefit for employers
In MP 1,045, employers can again benefit, now for a maximum of 120 days, from the state-funded Emergency Employment and Income Preservation Benefit (BEM). The amount paid will be based of the unemployment insurance portion to which the employee would be entitled, in the event of either a proportional reduction of working hours and wages or a temporary suspension of the employment contract.
The proportional reduction in working hours and wages may be agreed on a sectoral, departmental, partial or total basis, and must be agreed upon in a collective labour agreement or individual written agreement between employer and employee. In the case of an individual agreement, the reduction percentages are limited to 25%, 50% and 75%, while in collective agreements, the percentages can differ.
The temporary suspension of the employment contract also follows the rules above in relation to coverage and how it is agreed. During the suspension period, employees continue to be entitled to the same benefits granted during employment, and continuing to provide work services is prohibited, even partially, through home office, remote work or distance work.
A company that earned gross revenue exceeding BRL 4,800,000.00 in the calendar year 2019 can only suspend the employment contract of its employees by paying monthly compensation of 30% of the employee's salary during the agreed period of suspension.
For both reduced wages and hours and suspension of the employment contract, the following rules still apply:
- Individual agreements may be agreed upon by physical or electronic means and must be communicated to the appropriate unions within ten calendar days, counted from the date of execution.
- While in receipt of BEM, the company may offer the employee a monthly compensation payment, of an amount defined in the agreement or collective agreement. This will be an indemnity and does not become part of the employment contract for any purpose.
- Continued employment is guaranteed during the agreed period, except in the event of resignation, termination of employment by mutual agreement or termination for just cause.
- If an unfair dismissal occurs during the period of provisional guarantee in employment, the employer will be liable to pay indemnities in addition to the severance payments provided for in legislation.
- The measures can be implemented by means of an individual written agreement or through collective bargaining with employees with a salary equal to or less than BRL 3,300.00 (three thousand and three hundred reais) or with a higher education diploma and a salary equal to or higher twice the maximum limit of social security benefits. Otherwise, implementation depends on collective bargaining agreements, except for reductions in working hours and wages of up to 25%, when the reduction or suspension does not result in a decrease in the total monthly amount received by the employee.
Teleworking, vacation, overtime and health and safety at work
Under MP 1,046, employers may adopt, also for of up to 120 days, measures regarding:
- Work under the 'teleworking regime', which can now be unilaterally implemented by an employer without an individual or collective agreement and without prior registration in the employment contract. It is extended to interns and apprentices.
- Early granting of individual vacation, even if the acquiring period has not elapsed, upon at least 48 hours' prior notice. The additional 1/3 bonus payment may be paid after granting.
- Granting of collective vacation to all employees or sectors of the company, for a period exceeding 30 days, provided that employees are notified in writing or electronically.
- The use and anticipation of holidays, including religious ones.
- Compensation of overtime through the implementation of an hour bank agreement, for 18 months from the date of MP 1.046. Companies that perform essential activities may set up a special work hours compensation scheme through an hour bank whether or not their activities have been interrupted.
- The suspension of administrative requirements for safety and health at work for 120 days from the date of termination of MP 1,046, except for dismissal or termination examinations of workers who are on the 'teleworking regime' or working. The obligation to carry out occupational inspections and periodic training for health and auxiliary workers working in hospital environments is maintained. However, mandatory periodic training of current employees (provided for in regulatory standards for health and safety at work) is suspended for sixty days from the date of publication of MP 1,046. Periodic occupational medical examinations of workers in on-site activity that are overdue during the period of validity of MP 1.046 may be carried out within 180 days from the date they were due.
- Deferral of payment of the Severance Pay Fund (FGTS) for April, May, June and July 2021. These payments can be made inup to four installments without adjustment of the amount due, starting in September 2021. It will be up to the company to opt for deferral payments until August 2021.
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.