Approved back in July by Congress and President Michel Temer, Brazil’s labor reform will be effective on November 11. Law number 13,467/2017 altered over 110 articles of the country’s the labor legal framework. While most changes will be implemented right away, some still depend on negotiations between companies and workers.

The government argues that the labor reform is necessary to update Brazil’s ancient labor laws with modern negotiation practices and to help fight unemployment. Meanwhile, labor groups fear the reform will remove their recourse to basic workers’ rights and actually worsen unemployment, which already affects over 13 million Brazilians.

We break down to you the main changes that come with the new labor code:

Collective Agreements and Labor Conventions

One of the core points of the changes brought by the reform is legal legitimacy to contracts signed through collective bargaining. The reform actually gives collective contracts greater legal weight than the current book of labor laws.

There are exceptions to that, however. The Brazilian Constitution protects some “essential rights,” which include: minimum wages, higher pay for night work, paid weekly rest, extra time being paid for at least 50 percent higher than regular work hours. Also untouched by the reform are the number of vacation days per year, safety-related issues, maternity leave of 120 days, and advance notice proportional to the length of service.

That debunks the widely spread interpretation that collective agreements would be, by definition, detrimental to workers. The new legislation gives more freedom for parties to agree on specific working conditions.

Home office

For the first time in history, home office will be regulated in Brazil. Per the new legislation, there must be a balance between productivity for the company and the respect to the workers’ quality of life. The reform says that home office allows workers to balance their professional and personal lives, while saving companies charges.

The reform states that all the specifics, like compensation for equipment usage or power and internet expenses, must be addressed in the work contract.

Intermittent work

This is one of the most controversial points of the reform. It allows companies to hire people for small periods – and pay them by the hour or the day of work. The amount paid by the hour must be specified in a contract. It can’t be lower than the value of an hour’s fraction of the minimum wage or what other employees who exercise the same job get.

Workers are also entitled to receiving benefits calculated proportionally to how much they worked – including vacation, severance payments, social security, and the 13th salary. Employees must be summoned at least three days in advance. If companies don’t honor their committed, they must pay, within 30 days, a fine equivalent to 50 percent of the salary that would be due.

After rendering the services, as agreed, the employee will be immediately paid. It is also important to point out that after 12 months of hiring the employee acquires the right to vacation.

Employee’s representatives within companies

The Constitution already protected employees’ rights to have their representatives in companies with more than 200 workers. The reform, now, regulates how that is to happen.

Workers will be able to choose at least three representatives to represent them in negotiation with the bosses. These representatives must be chosen by workers and have all the rights of a regular employee, enjoying two years of stability.

Representatives will be responsible for conciliating labor disputes within the company, including the payment of labor sums, in the course of the labor contract or severance pay.

The minimum of representatives is established as follows:

  • 200 – 3,000 employees: 3 representatives
  • 3,000 – 5,000 employees: 5 representatives
  • Over 5,000 employees: 7 representatives

They will serve a one-year term – and can’t be fired for one year after finishing their term.

Termination

With the reform was born a new way to extinguish the contract of work, the so-called “mutual and consensual termination.” This new way allows the employee and company to jointly decide to terminate the contract, committing to a compromise.

Up until now, workers who quit a job or were dismissed for a ‘just cause’ were not allowed to withdraw money from their FGTS severance fund. If they were fired, then employers would pay a fine equivalent to 40 percent of the amount in their FGTS fund, and the worker would be allowed to withdraw the amount. Now, the mutual termination allows the worker to touch 80 percent of his FGTS fund – and companies would only have to pay 20 percent of the fine.

This point was the object of criticism, as unions warn that companies could coerce workers into accepting a “mutual” termination.

Vacation in installments

Up until now, workers could split their vacation time into two periods of time – of at least 10 days. Those under 18 or over 50, however, were not allowed the split. The Labor Reform lifts this restriction and allows workers to split their vacation time into three stints – one of which being for at least 14 days, and the other two of a minimum of five consecutive days, each. Vacation time can’t begin weekly resting day or two days before a holiday.

Working hours

Unions feared that the reform would allow companies to increase the weekly work journey. However, the Ministry of Labor issued a statement explaining that the already established 44-weekly hours would not be touched. What the reform does is to allow collective agreements to regulate how workers will comply with their 44-hour workweek.

The reform creates the possibility of a 12-hour work day (followed by 36 hours of rest), respecting the limit of 44 hours per week (or 48 hours, with overtime) and 220 hours monthly.

Breaks

One of the controversies generated on this topic is that the Reform allows breaks within the working day to be negotiated, with the only requirement that at least 30 minutes of rest be granted to the worker who serves the standard 8-hour workday. Prior to retirement, the worker was entitled to at least one hour and a maximum of two hours rest or rest period.

Equal pay for equal work and allowance

With the reform, the definition of equal pay for equal work become stricter. Now, to be entitled to the same pay, the compared employees should work in the same branch of a company, for example.

And in terms of allowance, different payments to employee as the cost allowance, travelling expenses, bonuses, medical insurance, meal help will no longer be considered as part of employee salary.

Union tax

Before the Labor Reform, the union tax was a mandatory contribution, both to registered employees and autonomous professionals, as well as employers. Now, it becomes optional. The deadlines previously established will not be modified, for those who choose to contribute to their union entities.

Termination of the employee relation – ratification before Union

Before the reform, the termination of a contract had to be approved by a union or the Ministry of Labor – a way to avoid abuse from companies. Now, that is no longer required.

The approval of the termination of an employment contract can now be made within the company, before the lawyers of the employer and the official, and the assistance of the Union is available.

Outsourcing

Companies could only outsource “non-core” activities, such as security or maintenance. However, a new law approved by Congress liberates outsourcing to any kind of labor, central or otherwise to the company’s services. For example, a hospital may outsource its security or cleaning staff, but now it could even potentially outsource its doctors and nurses – formerly hired directly by the institution.

The Labor Reform highlighted that the contracted employees will be entitled to the same rights as regular employees of the contracting company, when they provide service in their premises, regarding certain areas such as: food and transport helps; medical and outpatient care in the premises of the contractor or place designated by him; appropriate training, when required; health conditions and measures to protect health and safety at work.

This article was published on the Brazilian Report website: https://brazilian.report