Employer, beware, an archaic labour code penalises businesses and workers alike
Mar 10th 2011 | SÃO PAULO | from the print edition
IN 1994 Ricardo Lemos (not his real name) and two friends bought a chain of pharmacies in Pernambuco, in Brazil’s north-east. Immediately afterwards they were taken to court by four former employees of the pharmacies who claimed they were owed 500,000 reais (then $570,000) for overtime and holidays. Since the new owners lacked the payroll records, the labour court ruled against them—even though they had only just bought the business and the claimants had been in charge of payroll and work scheduling. The court froze their bank accounts, so they had to close the stores, with 35 redundancies. Seventeen years later three of the cases have been settled, for a total of 191,000 reais. The last drags on as the claimant’s widow and son squabble over how much to accept.