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Labor laws

Complex labor laws

Businessmen have long complained that onerous labor laws, together with high payroll taxes, put them off hiring and push them to pay under the table when they do.

Labor Laws in Brazil were strongly influenced by developments and trends in Europe, the efforts of various countries to codify laws to protect workers and, particularly, by Brazil’s commitments to the International Labour Organization. These influences, alongside significant domestic factors, including burgeoning industrialization and the labor policies of the Brazilian Government, were instrumental to the design of a body of national labor laws.

Labor laws in Brazil, often a conflict ending up in a strike

Union strike in Fortaleza

Consolidated Brazilian Labor Laws

The Consolidated Brazilian Labor Laws (Consolidação das Leis do Trabalho – CLT) came into effect in 1943, as a consequence of efforts by legal scholars to harmonize existing laws and develop an institutional framework.Thus the CLT, which has over 900 articles, provides legal standards governing labor relations in Brazil. Chapters of the CLT encompass:

–  Safety in the workplace;

–  Working hours, the minimum wage, and vacations;

–  Workers health;

–  Labor tutelage;

–  Nationalization of labor;

–  Protection for women and child workers;

–  Individual employment contracts;

–  Trades union organizations;

–  Union fees.

The CLT also provides the framework for the Brazilian labor courts system and related agencies, and establishes rules for labor proceedings. Since 1943, the Brazilian legal system has undergone further developments, and various laws about important issues such as the right to strike have been approved, and new wording has been introduced into certain articles of the CLT.

Basic labor rights

The promulgation of the Federal Constitution of 1988 has introduced new labor rights and enhancements to the standards provided in the CLT. The basic labor rights provided for in the Federal Constitution, the CLT, and specific labor laws are as follows:

–  minimum wage;

–  44-hour work week;

–  irreducibility of wages;

–  unemployment insurance;

– 13th salary (Christmas bonus);

–  profit sharing;

–  overtime pay;

–  annual vacations;

–  maternity leave;

–  paternity leave;

–  prior notice of dismissal;

–  retirement benefits;

–  approval of collective standards;

–  industrial accident insurance;

– Time of Service Guarantee Fund (FGTS);

–  right to strike;

–  provisional job security for members of Accident Prevention Committees, employees that are pregnant or suffering from work-related injuries;

–  tips;

–  commissions;

–  family allowances;

–  education allowances;

–  transport passes;

–  food vouchers;

–  daycare benefits;

–  unhealthy working-conditions premium;

–  risk premium;

–  night-shift premium;

–  transfer premium;

–  funeral assistance;

–  paid weekly rest;

–  unemployment insurance;

–  signed Work Document (CTPS).

Other sources of law observed by the Brazilian Labor Courts include:

–  Collective Bargaining and Labor Agreements;

–  High Labor Court (TST) Jurisprudence Statements;

–  Standards issued by the Ministry of Labor;

–  Certain Conventions of the International Labour Organization.

Labor rights may entail heavy costs for companies and, so, many have adopted outsourcing or sought more flexible labor arrangements (often called flexibilization) through Collective Bargaining or Labor Agreements.

Recent decisions of the High Labor Court (TST) have tended to accept flexibilization as a necessary development in labor relations. Brazil is undergoing significant and historic changes in the field of labor relations. One such change was Constitutional Amendment 45, approved in 2004, which expanded the competence of the Brazilian Labor Courts. Prior to this amendment, the court’s powers were limited to conflicts between employers and employees. Now, the Labor Courts have jurisdiction over a broader range of disputes, including disputes stemming from services provided by self-employed workers.