Struggling against one of the most severe financial and political crises, the government has adopted an agenda that aims to spur an uptick in the economy and reduce the unemployment rate, which hovers around 13%. In this regard, the government has proposed labour and social security reforms. However, some employee unions are urging a general strike across the entire country to obstruct these reforms.
Brazil recently underwent an unprecedented political and financial crisis. In view of this scenario, recovery of the country's economic growth and political stability is paramount. In order to reduce unemployment and modernise the labour regime, the government has proposed a labour reform, based on Bill 38/2017. The bill sets out a meaningful change in the Labour Code by amending, excluding and including several articles.
The Supreme Court recently rendered two decisions on labour and employment matters that may be understood as the beginning of the reforms promised by Brazil's new president. The cases centred on employees' right to expenses for commuting to and from work and Brazil's working hours regime. These first steps by the Supreme Court are a positive sign of what is to come in the near future.
Law 13,301 recently introduced new rights and rules which have extended the duration of maternity leave for mothers of newborns infected with a disease transmitted by the yellow fever mosquito. According to the new rules, employees who are eligible for maternity leave must receive an additional 60 days of leave if their child is infected by any of the diseases transmitted by the yellow fever mosquito, including the Zika virus and Chikungunya fever.
Under Brazilian law, the courts can schedule public hearings in order to invite legal experts and the general public to debate important matters to be decided by the courts. The Superior Labour Court recently organised a series of public hearings to discuss relevant labour matters, including whether asking job candidates to provide clearance certificates for criminal records constitutes grounds for moral damages.
Mediation is one of the most important principles of labour dispute resolution. However, despite the growing number of labour claims, the number of mediation proceedings has remained stagnant and research shows that there has been little improvement in this regard. This scenario may change in the near future, as Congress recently took steps to encourage parties (and courts) to resolve disputes – including labour disputes – through mediation.
Law 13,257/2016 was recently enacted, extending paternity leave from five days to 20 days. The law is part of a project launched by the government to protect children and is restricted to employees who work for companies enrolled in the Citizen Company Programme.
The Superior Labour Court recently ruled on a case filed by an employee who was dismissed eight months before completing the vesting period established in the company's stock option plan. The court ruled that the dismissal was unlawful, as the company had maliciously intended to prevent the employee from purchasing stock. The employee was granted indemnification in lieu of the stock option.
The Ministry of Labour and Employment recently issued new rules on drug testing which require all professional drivers involved in road passenger transport and road cargo transport to undergo drug testing. The rules may help employers and employees to avoid labour accidents and provide adequate treatment for drug-addicted employees.
Provisional Measure 680 – which launched the Employment Protection Plan (EPP) – has finally entered into force. Under the new law, companies now have until December 31 2016 to participate in the plan. The EPP seeks to protect formal jobs and encourage negotiations between employers and employees.
A national anti-bullying programme was recently introduced by Law 13,185. The programme provides a framework for creating, developing and disseminating policies to counter bullying. Employers must consider how to address these issues – in particular, when bullying occurs outside the workplace, as seems to be the case with most cyberbullying.
Provisional Measure 664/2014 was recently converted into Law 13.135, which introduced new conditions and measures. For example, under the provisional measure, an employee had to be injured or ill for a minimum of 30 days before claiming continuous pay; the new law has reduced that period to 15 days. Further, the law has increased a spouse's pension entitlement to 100% of the deceased person's retirement salary.
The Supreme Court recently suspended the effects of the Superior Labour Court's decision which made the Special Extended Consumer Price Index the applicable index to adjust outstanding labour-related debts. Further, the period for which an employee must be unable to work before he or she can claim continuous pay has been reduced to 15 days. Finally, the 'dirty' list (ie, a list of companies with employees working in conditions akin to slavery) has been reinstated.
The Supreme Court recently issued a preliminary injunction granting the Civil Court of Children and Youth the power to issue entertainment work permits to minors. The injunction was granted based on the Supreme Court's understanding that although all labour matters should be decided by the labour courts, the issue of work permits to minors is a civil matter, as it is considered a voluntary procedure.
Companies involved in labour suits were taken by surprise by a recent Superior Labour Court ruling on an incidental proceeding challenging the constitutionality of the index used to adjust outstanding labour-related debts. In its ruling, the court held that labour debts must be adjusted based on the Special Extended Consumer Price Index and rejected the use of the referential rate to adjust such debts.
The government recently launched the Employment Protection Plan, which allows companies in crisis to reduce employees' working hours – and proportionally, their salaries – by up to 30% for up to 12 months. Its success will depend on how optimistic companies are in relation to when their crisis is likely to end and whether they will be able to adhere to all related obligations.
Changes to Brazil's outsourcing rules are expected following the House of Representatives' recent approval of a new draft law. In contrast to the existing provisions on outsourcing, the draft law would allow any part of a company's business to be outsourced, rather than only non-core activities as at present. Companies hope that the new law will make outsourcing less bureaucratic and more unrestricted.
The Superior Court recently approved a collective preliminary injunction to suspend the terms of Ordinance 540/2004 that partially regulated the Ministry of Labour and Employment's 'dirty' list, which contained all employers found to have employees working in conditions akin to slavery. As such, two important public banks recently resumed the financing of employers that were on the dirty list.
The government recently amended the rules on guaranteed pay and unemployment insurance. The first measure extends the period for which an employee must be unable to work due to a work-related illness or injury before he or she can make a claim to receive one year of continuous pay. The second sets forth a regressive grace period before employees can claim unemployment insurance.
A new Ministry of Labour resolution allows parties to enter into temporary employment contracts for terms longer than three months, permitting temporary employment contracts to be extended for an additional six months. Companies must not only comply with temporary employment law and the new resolution, but also monitor the way in which temporary workers are terminated in order to avoid any repercussions.