In Brazil, worker-employer deals could prevail over law in gov't proposal

President Michel Temer announced changes in labor regulations. The proposal postpones the deadline for joining the Employment Insurance Program (PSE) for a year and allows working hours and salary to be reduced by 30% without dismissals. Also announced was a bill establishing that deals between employers and trade unions may prevail over the legislation. The statement was made Thursday (Dec. 22).

Employment

The Employment Insurance Program is a follow-up to the Protected Employment Program (PPE), launched by former President Dilma Rousseff, due to expire at the end of this year. It allows the reduction of working hours and salary, with the government compensating for 50% of the cut, which is in turn limited to 65% of the highest monthly payment of the employment insurance. For that, the government will resort to the Support for Workers Fund (FAT).

The changes also affect the rules on contracts governing temporary jobs, whose contracts will be allowed to expire in 120 days or be extended for the same period. As it stands today, the period is set at 90 days, and may be extended by another 90.

The government also presented a bill changing the Consolidation of Labor Laws (CLT)—the laws governing labor in Brazil. Among other measures, the bill gives legal force to deals arranged between workers and their employers.

The legislation also includes new rules for part-time jobs, currently limited to a weekly 25 hours with no overtime pay. The idea is to expand the amount of hours to 30, with no overtime, or a 26-hour week with the possible addition of six overtime hours a week.

For the drafting of the text, a number of meetings were held with the six main trade union centers and three major employers' confederations, according to Labor Minister Ronaldo Nogueira. Only the points of consensus were included in the piece, he said.

In his statement, President Michel Temer noted that the move aims to bring peace between workers and employers, and reduce litigation. The president remarked, however, that “Manicheans should be driven away—those who believe that the truth can be found on just one side, the angry, those who avail themselves of annoyance. It's what I always say, against the argument, let one present the document, which is what Ronaldo did today.”

Rights Preserved

While explaining the measures, Labor Minister Ronaldo Nogueira said the changes pursue three lines—the improvement of rights, legal security, and job opportunities for everyone. He pointed out that the government is not curtailing rights, but rather enhancing labor relations, with legal security between capital and labor.

Nogueira earnestly explained that the working hours per month remain 220 hours and per week, 44 hours. Workers usually have eight working hours per day and two overtime hours. According to him, this will not change. The maximum working hours are, exceptionally, 12 hours per day.

The minister reported that the economic team, with great competence, produced a two-part process of adjustment in the economy with the constitution amendment of government spending cap and the social security reform, but other measures also have to be adopted.

Reactions

The head of the Superior Labor Court (TST), Ives Gandra praised the measures as they are open to collective bargaining: “The government will not solve the employment problem, it is your job, gentlemen [trade union leaders.] You are now within a more secure regulatory framework. We, members of the court, will also be more reassured. When the law is clearer, it is easier to interpret it.”

For the president of the Federation of Industries of the State of São Paulo (FIESP), Paulo Skaf, the measures announced mark "the beginning of the modernization of labor relations." He noted a positive aspect of the changes: greater room for bargaining.

Trade Unions

João Carlos Gonçalves, also known as Juruna, secretary-general at the Força Sindical union, argued that the measures are a way to strengthen the role of trade unions. The statement, he said, shows the importance of negotiation and the presence of union representatives in debates under an atmosphere free of legal contention. There will be more flexibility, and workers will have a voice on his vacation and work week.

The Central Única dos Trabalhadores (CUT), in turn, said they did not attend the event. CUT, a union center historically linked to the Workers' Party (PT), criticized the changes and argued that the government's proposal may lead to “an intermittent work week, with workers being entirely at the disposal of their employers, and being paid for the hours of work only.” The association also says that most workers are left unprotected and that the majority of trade unions are small and have little representation, which may undermine talks.

Translated by Fabrício Ferreira / Amarílis Anchieta