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Brazil – New bill aims to make labour legislation more flexible

01 August 2016

Brazilian Vice President, Michel Temer, is working on a bill to make labour legislation more flexible, aiming to change the Consolidacao das Leis do Trabalho (CLT), the country’s legislative standard law on labour law and procedural labour law, created in the 1950’s.

The bill will be sent to the legislative chambers before the end of the year and will address several issues such as wages, the working day and collective bargaining.

It will also address the regulation of “outsourced” workers. The bill could lead to certain workers becoming legal entities, which would make them responsible for social contributions and responsibilities that nowadays are under enterprises’ responsibilities.

The project has to be discussed once again by workers and businessmen, in order to determine its reach. Nevertheless, the common understanding is that the situation of outsourced workers needs regulation.

“Speaking on behalf of over 30,000 companies from the services sector, our goal is to ratify the need to enact a proper law for outsourcing in Brazil”, Vander Morales, President of FENASERHTT (Federação Nacional dos Sindicatos de Empresas de Recursos Humanos, Trabalho Temporário e Terceirizado or National Federation of Trade Unions, Human Resource Companies, Temporary and Outsourced Work), said, during a meeting held with the Chief Minister of the Civil House, Eliseu Padilha.

The sector employs over 12 million workers. The development of a proper regulatory framework would eliminate legal insecurity, incentivize investments and employment creation, and represent a step forward against informality.

The sector handed a document to Minister Padilha that expresses certain facts about outsourcing:

  • There is no difference in terms of wages between outsourced and regular workers. Professional qualifications are the main variables that have an influence on wages.
  • Outsourced workers are hired in accordance to the CLT; therefore, they have every right and benefit granted by Collective Bargaining. There is no intention to make the CLT more flexible.
  • If the sector is regulated, Outsourcing will be consider as a career choice, and not merely a temporary job.
  • Regulatory framework will benefit the economic sector, as there will be an income increase for the Social Security, the Employee Indemnity Guarantee Fund, and federal taxes such as PIS/COFINS and ISS.
  • With the end of legal insecurity caused by the absence of a law for Outsourcing, legal expenses shall be reduced.

In addition, FENASERHTT was welcomed by the Minister of Labour, Ronaldo Nogueira, who suggested that temporary work can promote first jobs. The sector can generate jobs right away through the Law on Temporary Work.

“Outsourcing and temporary work laws can provide a significant impulse to the Brazilian formal labour market”, Martin Padulla, Founder and Managing Director of staffingamericalatina, business partner of Staffing Industry Analysts. “Incentives for this vital sector may directly contribute to the modernization of the labour market and to social and economic progress in times in which Brazilians, particularly youth, need this in order to build their future.”

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