On July 14, 2017, the new Labour Law 13.467/2017 was published, it will be in force 120 days after its official publication. Its objective is to modernize the labour relations in Brazil. It is an important change in Brazil`s labour scenario that can influence investment decisions, reduce excessive labour conflicts and foster job creation.
Why is Brazilian labour law modernization important to the country?
- the current law is outdated and is not in line with the social and productive dynamics of the modern world any longer;
- the law is rigid and leaves very little room for adjustments to the demands of workers and employers within companies or in Brazil’s sectors and regions;
- the law induces conflicts and does not value mechanisms for dialogue, negotiation, and consensus between employees and employers;
Key modernization issues under discussion in Brazil
The modernization of labour relations in Brazil revolves around four fundamental axes, these are:
I) STRENGTHENING AND VALUING FREE AND SPONTANEOUS COLLECTIVE BARGAINING
Considering the scenario of legal uncertainty prevailing in Brazil in relation to the validity of collective bargaining, and in line with ILO Conventions 98 and 154, the discussion in question is intended to encourage and promote the full development and utilization of the tools for voluntary negotiation between employers or employers’ organizations and workers’ organizations, with a view to the regulation of terms and conditions of employment by means of collective agreements, adapted to national conditions.
II) PRESERVATION OF LABOUR RIGHTS
All workers’ rights are preserved, especially those provided for in the Brazilian Constitution, which sets out an extensive list of rights – more than 30 of them, which include:
- Maximum daily and weekly working hours
- Additional pay for extraordinary working hours
- 13th salary (compulsory Christmas bonus)
- Protection against discrimination
- Right to free unionization
- Maternity and paternity leave
- Right to strike
- 30-day vacation a year
- Right to free and spontaneous collective bargaining
- Protection for female workers
III) NEGOTIABLE WORKING TERMS AND CONDITIONS
The law is designed to make it possible for employees and their unions and companies to negotiate working terms and conditions. These terms and conditions include:
- Representation of workers in the workplace
- Additional pay for work under unhealthy conditions
- Flexible working hours and an annual working hours bank
- Possibility of extending working hours in unhealthy environments
- Rest and meal break of at least 30 minutes
- Home office and intermittent work
- Modality of recording working hours
- Possibility of switching holidays falling in the middle of the week
- Career and wages plan and corporate regulation
- Compensation for productivity and individual performance
- Incentive bonuses in goods and services
- Participation in profits and results
IV) SIMPLIFICATION OF LABOUR RELATIONS
The previous labour laws in Brazil gave rise to many doubts among enterprises and workers and provided a lot of bureaucratic procedures that were harmful to the workplace environment. Therefore, one of the labour modernization objectives is to simplify them with the aim of reducing red tape and legal uncertainty regarding their application in the social and productive scenario of our days, which poses a burden on labour relations and contributes to unemployment.
V) VALUING DIALOGUE BETWEEN EMPLOYEES AND ENTERPRISES
The previous law was based on the premise that labour relations should be regulated in every detail, reducing the space for collective bargaining and dialogue between companies and workers on their working terms and conditions with a focus on ensuring benefits to workers, productivity gains and increased competitiveness.
Labour modernization is intended to afford more possibilities and conditions for employers and workers to better define the details of their relationship through dialogue and collective bargaining, in addition to stimulating companies to provide benefits to their employees and to strive to increase their productivity and competitiveness jointly with them.