1. BRAZILIAN LABOR LAW
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Transcript 1. BRAZILIAN LABOR LAW
UNDERSTANDING BRAZILIAN LABOR
AND EMPLOYMENT LAW
April/2012
São Paulo - Rio de Janeiro - Belo Horizonte
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MAIN SUBJECTS
1. BRAZILIAN LABOR LAW - PRINCIPLES
1. Brazilian labor law – principles
2. Employment labor law
3. Employment contracts
4. Outsourcing
5. Applicable laws
6. Structure of labor court and agencies
São Paulo - Rio de Janeiro - Belo Horizonte
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1. BRAZILIAN LABOR LAW - PRINCIPLES
Main Principles:
Brazilian Labor Law is guided by the following main principles:
• Protection of the employee: “unconscionability” defense;
• Application of the most favorable rule to the employee;
• The inalienability of Brazilian labor rights;
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1. BRAZILIAN LABOR LAW - PRINCIPLES
Main Principles:
• The right to maintain the most favorable condition and the
impossibility to change the labor contract in detriment of the
employee;
• The impossibility to reduce the employee salary;
• Intangibility of the employee´s salary;
• Facts and evidence prevail over any formal agreement;
• The job continuity principle.
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2. EMPLOYMENT LABOR LAW
Employment labor law - Features:
• Labor laws are complex and compliance with them is mandatory
• They are socially relevant
• Employers and employees are not allowed to waive or dispose of the
labor rights provided in laws even when they agree to do so
• Courts can decide that an employment relationship exists even if the
parties agree otherwise and if the requisites for the existence of such
relationship are met
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2. EMPLOYMENT LABOR LAW
Employment labor law - Features:
• Brazilian laws and Government stimulate hiring an employee
• Compliance with labor laws is essential
• Companies interested in investing in Brazil have to hire professionals:
As employees
As service providers
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2. EMPLOYMENT LABOR LAW
Employment bond – Requirements:
(common to all employment contracts)
• Individuality: only individuals can be employees;
• Onerosity: employee needs to receive monetary compensation;
• Subordination: employee provides services under subordination;
• Habituality: services provided on regular basis;
• Personality: employee cannot be replace by any other person.
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3. EMPLOYMENT CONTRACTS
Different types of employment contracts (2 groups):
• Employment contract for a term or a set period (exception)
• Employment contract for an indefinite period (rule):
The most important according to laws (the job continuity
principle) and
Used as a point of reference with regard to all other types
of contracts
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3. EMPLOYMENT CONTRACTS
Employment contracts - Features:
• A formal agreement is not a mandatory requirement for hiring an
employee
• The employment contract can be made in writing, orally or implied
from the relationship
• A written employment contract is always recommended
All legal rights and duties involved in the employment
relationship must be clearly stated in the contract
• Most provisions in an employment contract are already set by law or
collective agreement
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3. EMPLOYMENT CONTRACTS
Employment contracts - Features:
• Provisions are mandatory
• Employers already know, when hiring an employee, what they are
required to pay
• Employer must not negotiate or change working conditions to the
detriment of workers
• The risks inherent to the employer´s activities must be taken by the
employer:
The employer is not allowed to transfer such risks to the
employees
This makes the difference between an employment bond
and outsourcing
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4. OUTSOURCING
Outsourcing related labor laws
• No specific law regarding outsourcing
• Few laws outside the CLT related to this matter
• The law of temporary work in cases of:
an extraordinary increase in the production
need to replace an ordinary employee in temporary leave
• Difficulty in identifying whether outsourcing is complying with labor laws
or not
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4. OUTSOURCING
Precedent 331 – Superior Labor Court
• To be used when there is no legal provision
• Precedent 331 establishes:
o The labor bond will not be recognized in cases of hiring a service
provider for 3 types of services:
cleaning and maintenance services;
surveillance services;
specialized services not related to the main activity of the
contracting party provided the requirements of personality
and direct subordination are not present.
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4. OUTSOURCING
Situations that represent risks of recognizing a labor bond:
Outsourcing does not refer to cleaning and maintenance services or
surveillance services
The service provided is related directly to the main activity of the
contracting party
The service provider is subordinated to the contracting party
(subordination and personality)
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4. OUTSOURCING
Unlawful outsourcing – Consequences:
The situation will be considered as illegal
According to Brazilian labor law facts and evidence prevail over any
formal agreement
Documents and written contracts not valid if reality shows the
relationship masks a real employment bond
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4. OUTSOURCING
Unlawful outsourcing – Consequences:
Employment bond will be recognized as such before the Labor Court
Contracting party will be forced to pay to the service provider all benefits
and rights owed in a labor bond
Subsidiary responsibility
Even in a licit outsourcing situation, contractor has subsidiary
responsibility for rights and payment in case service provider fails to pay
the employees
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5. LAW THAT CAN BE APPLIED
Applicable laws that rule labor issues:
•
Brazilian Constitution: enacted in 1988 – main existing rules on
article 7:
The protection of all employment relationship – dismissal is only
allowed to dismiss an employment with the payment of
indemnification;
ii. The right to receive unemployment allowances;
iii. The right to maintain a severance pay fund (FGTS);
iv. The impossibility to reduce the employee´s salary;
v. The right to receive the 13th salary;
vi. 30 day vacation period;
vii. The statute of limitation o any labor claims;
viii. The limit of the employee´s daily and weekly work hours which are 8
and 44.
i.
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5. LAW THAT CAN BE APPLIED
Applicable laws that rule labor issues:
•
Brazilian Labor Law (CLT): enacted during a populist government in
1943 and since then has remained mostly unaltered
•
Decisions from the Superior
Jurisprudence Guidelines
•
Specific Federal Laws
•
Collective Bargaining Agreement and Health and Safety rules
São Paulo - Rio de Janeiro - Belo Horizonte
Labor
Court:
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súmulas
and
6. STRUCTURE OF LABOR COURT
AND LABOR AGENCIES
Structure of Labor Court:
Specialized Federal Court: court structure only to rule on labor
cases
o 3 instances:
• Trial Court: labor claims are filed at trial court;
• Labor Court of Appeal: an appeal can be filed to the Labor Court
of Appeal;
• Superior Labor Court.
On some specific cases, Brazilian Supreme Court
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6. STRUCTURE OF LABOR COURT
AND LABOR AGENCIES
Brazilian Labor Agencies:
Apart from the judicial system, there are other institutions
responsible for enforcing Labor Laws:
•
Ministry of Labor: District Agencies responsible for auditing
companies. Notices of Violation;
•
Labor Public Prosecutor: supervising companies – collective
damages – Class Action - active and voluntarily audit companies;
•
Unions: related to the company´s main Activity - mandatory by law.
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Av. Chedid Jafet, 222. Bl C. 3º andar
São Paulo – SP – 04551-065
Tel: (55 11) 3050-2150
Fax: (55 11) 3050-2151
Rua Líbero Badaró, 425 - 11º andar
São Paulo – SP – 01009-000
Tel: (55 11) 2165-2022
Fax: (55 11) 2165-2000
Rua da Assembléia, 10 – Cj. 31089
Rio de Janeiro – RJ – 20011-901
Tel/Fax: (55 21) 2221-5470
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Belo Horizonte – MG - 30110044
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