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Global

Brazil Lightens Labour Laws

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The major reform of Brazilian labour law announced in July, all being well, will come into effect in the middle of November.

Brazil’s outgoing labour code dates from 1945 and provided one of the world’s most employee friendly labour regimes. As with Macron’s France, the Brazilian government views the current code as a contributor to Brazil’s high levels of unemployment (between 12% and 14% in 2017). It is the usual perceived trade-off between workers’ rights and work opportunities, producing similar reactions from Brazilian trade unions.

The changes are many and wide ranging and may yet be subject to late amendment. Global employers operating in the country will need to review their employment contracts, policies, payroll processes and handbooks to reflect them. Here is a brief overview:

Working time

  • Normal commuting to work no longer counts as working time
  • Remaining at work due to poor weather or dangerous travel conditions is no longer treated as overtime
  • Alternating periods of work and non-work can be agreed between employer and employee under certain conditions
  • Remote working (from home or elsewhere) can be expressly excluded from the working time regime
  • Part time workers can work up to 30 hours per week without the option of overtime or 26 hours per week with the option of 6 hours overtime

Holidays

  • If the employee agrees, holiday leave can be split into 3; one for at least 14 consecutive days and two for at least 5 consecutive days

Pay and allowances

  • There are stricter rules governing when an employee can claim equal pay
  • Meal vouchers, medical insurance, bonuses, travel expenses and cost allowances will no longer be part of normal remuneration for the calculation of social security contributions

Ending employment

  • Terminating employment contracts no longer requires trade union or Ministry of Labour ratification
  • Termination will be possible by mutual consent subject to new compensation rules
  • Voluntary resignation programmes will be valid

Disputes

  • The employment contract can provide for dispute resolution by arbitration

Worker representation and collective bargaining

  • Workers in companies with more than 200 employees may elect a committee to represent worker interests; the new law has protections for the worker representatives
  • Collective agreements between unions and employers covering specified areas (such as holiday, breaks and working hours) will prevail over the labour law code.
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