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1. Introduction

 1.1 Main Changes in the Past Year

In the past 12 months, in addition to the rules pertaining to the COVID-19 pandemic (see 1.2 COVID-19 Crisis), the following regulations stood out in the field of labour law:

 Labour Law 13,874/2019 (Economic Freedom Law): it provided for the issuance of the employment record book, preferably by electronic means; it increased from ten to 20 the minimum number of employees that give rise to the requirement of registration of entry and exit times of workers; it authorised the "exceptional time card registration" (only exceptional situations, such as absences, delays, overtime etc, are registered).

Provisional Presidential Decree 905/2019: it created the "green and yellow employment agreement", seeking to stimulate the growth of first jobs for young people by reducing the labour and social security charges. When effective, it regulated the payment of "tips"; amended rules on the work on weekends; the working hours of bank workers. the adjustment for inflation index and interest applicable to labour liabilities, profit-sharing, rules on the inspection of work, and unemployment compensation. Lack of consensus on these subjects caused it to be repealed by another provisional presidential decree.

Relevant matters were also decided by the Federal Supreme Court (STF) in this period, and we highlight the following:

 the declaration of unconstitutionality of the rules brought by Law 13,467/2017 (Labour Reform), which allowed pregnant and nursing women to work on hazardous activities in some cases;

the declaration of unconstitutionality of the provisions of Law 10,671/2003 (Fan Act), which subjected participation in championships to the proof of the teams' tax and labour good standing;

acknowledgment of the right to compensation, regardless of the demonstration of fault or malice of the employer (strict liability) due to occupational accidents suffered by workers in hazardous activities;

the declaration of constitutionality of the rules brought by Laws 13,429/2017 and 13,467/2017, related to outsourcing, especially regarding the authorisation for sub-contracting the "core activities".

 1.2 COVID-19 Crisis

The COVID-19 pandemic has led to the enactment of countless federal, state, and municipal laws, including those related to the Labour Law.

Given the urgency in regulating several issues and the complexity of the legislative process, a relevant increase in the use of provisional presidential decrees (regulations issued by the President in relevant and urgent situations, with the same force as the law and which, despite their immediate legal effects, lose their effectiveness if not voted into law) has been verified.

The main COVID-19-related laws and provisional presidential decrees in the area of labour law are as follows:

Law 13,979/2020 (amended by several laws and provisional presidential decrees): it provided for measures to face the public health emergency; it vetoed the restrictions on the circulation of workers that could affect the operation of public services and essential activities; it imposed the immediate adoption, by the Government, employers, and contracting parties, of measures to protect the health and life of professionals who are essential to the control of diseases and to the maintenance of the public order;

Law 13,982/2020 (as amended by Law 13,998/2020): it established exceptional social protection measures during the period of the fight against the public health emergency; it provided for emergency aid to those who cumulatively are older than 18 years old (except teenage mothers), are not formally employed, are not holders of a social security or social assistance benefit, and who are in a condition of social vulnerability.

Law 13,999/2020: it created the "National Programme to Support Micro and Small Businesses", which grants special credit facilities. The programme forbids loans to companies prosecuted due to the use of slave-like or child labour. Companies that hire the "credit facility" undertake to keep the same number of employees as that of the date of publication of the law or to increase this number by the 60th day after receiving the last instalment of the credit facility;

Provisional Presidential Decree 927/2020: it was not voted into law and, therefore, is no longer effective. During its time of effectiveness, however, it provided for optional initiatives to be adopted by employers in the fight against the pandemic, such as remote working, early individual vacations, collective vacations, early holidays, compensatory time, etc. The Federal Supreme Court suspended the effectiveness of the rule that did not see as an occupational disease the cases of contamination of workers by COVID-19, and of the rule that limited the work of labour inspectors merely to a guidance activity;

Provisional Presidential Decree 944/2020: it created the "Employment Support Emergency Programme", providing for credit facilities to be granted to business owners so they could maintain the payment of salaries during the pandemic;

Provisional Presidential Decree 945/2020: it provided for special and temporary measures to be adopted by the port industry to face the pandemic;

Law 14,020/2020: as a result of Provisional Presidential Decree 936/2020 being voted into law, it created the "Emergency Programme to Maintain Jobs and Income", which provides for the payment of an emergency benefit and allows the employer to suspend temporarily the employment agreements and proportionally reduce the working hours and wages, by means of individual agreements or collective regulations. When the Federal Supreme Court analysed the constitutionality of Provisional Presidential Decree 936/2020, it ruled for the validity of individual agreements to reduce working hours and wages, stressing that the relevant union's agreement with this is unnecessary.

2. Terms of Employment

 2.1 Status of Employee

In Brazil, there is no difference between "blue-collar" and "white-collar" workers.

 The Federal Constitution and the Consolidation of Labour Laws forbid the distinction between manual, technical, and intellectual works.

Given the particularities of certain activities and professions, however, specific rules apply to certain categories regarding compensation, health, safety, engagement formalities, rights and duties of employers and workers.

Additionally, the labour legislation provides for the "position of trust": workers who are in a relevant position at the company and exercise managerial powers (managers, officers, department or branch heads) are not subject to working hours' control and, therefore, are not entitled to the payment of overtime. Additionally, their compensation is formed by a base wage and a job bonus exceeding 40% of their wage. In the case of bank workers, those in positions as officers, managers, inspectors, or bosses and who earn awards exceeding one third of the wage are also subject to different treatment regarding their working hours and the payment of overtime.

With Law 13,467/2017 (Labour Reform), the Consolidation of Labour Laws also began to treat differently those employees who hold a college degree and whose wage is equal to or higher than the cap of the Social Security benefits.

Negotiation made by these employees have the same legal effectiveness and prevail over collective regulations when they deal with subjects such as:

working hours, annual compensatory time, meal and rest breaks;

career, salary, and role plan;

bylaws;

representation of workers at the workplaces;

telework, on-call regime, and intermittent work;

productivity-based and individual performance-based compensation;

classification of the level of hazardousness and extension of working hours in hazardous environments;

incentives.

 2.2 Contractual Relationship

As a general rule, the individual employment agreement can be tacit or express (verbal or in writing), for a term or for an indefinite term, or for the performance of intermittent work.

For certain types of engagement, activities, and specific categories of workers, a written agreement is mandatory, among other formalities. This is the case, for instance, for part-time and intermittent workers, internees, apprentices, professional athletes, temporary workers, etc.

By virtue of the principle of the continuity of the employment relationship, the employment agreement is presumed to have an indefinite duration.

As per the majority understanding, the contract for a term must be delivered in writing.

As a rule, this type of engagement is only admitted in cases of:

services whose nature or transitory nature justifies pre-determination of the term;

transitory businesses activities; and

contracts for a period of probation.

As a general rule, the duration of a contract for a term cannot exceed two years. In the case of a contract for a period of probation, the maximum duration is of 90 days.

In rural areas, there are specific types of engagement for a term, such as the harvest contract (the duration is set in accordance with the change of seasons of agrarian activity) and the short-term contract.

Law 13,467/2017 also created the "intermittent work", under which the provision of services, although subordinated, is not continuous, there being an alternation of the periods of provision of services and inactivity, set in hours, days, or months. This type of agreement must be in writing and must meet other statutory requirements (eg, provide for the hourly rate of work, which must not be less than the amount paid to the other employees performing the same roles).

 2.3 Working Hours

As per the Constitution, the worker is entitled to work for up to 44 hours a week, eight hours a day, with the possibility of compensating hours and reducing working hours, by means of an agreement or a collective-bargaining agreement (acordo coletivo) or collective labour agreement (convenção coletiva).

In cases of "continuous shift rotation" (turnos ininterruptos de revezamento), the maximum number of working hours is six, unless a collective negotiation states otherwise.

The compensation for the extraordinary work must be at least 50% higher than the regular compensation. In the case of work on holidays or on the weekly rest day, the additional pay will be of 100%.

With due regard to certain limits and formalities, the compensatory time is admitted (ie, the extension of working hours in certain days, with the consequent reduction in other days, without the payment of overtime). This compensation may happen during the week, month, and for up to one year.

Some workers are not subject to the working hours' control and are not entitled to the payment of overtime, such as teleworkers, those in positions of trust, and those who work in external activities that are incompatible with the fixation of hours.

For different reasons (historical, occupational health and safety-related reasons, or due to the particularities of certain activities) some workers have different working hours and must abide by specific rules on the working hours and breaks, such as bank workers, telemarketing operators, aircrew, physicians, radiologists, lawyers, internees, and apprentices.

In the case of an imperious need (force majeure, undelayable services or services the non-performance of which may lead to manifest losses), the extension of working hours is permitted, even in the absence of a collective-bargaining agreement or collective labour agreement in this regard.

In addition to those cases, the Consolidation of Labour Laws also permits the extension of working hours for up to two hours a day by means of an individual agreement, collective-bargaining agreement, or a collective labour agreement.

It also permits the agreement on 12 consecutive hours of work and 36 consecutive hours of rest ("12 x 36 working hours"), with due regard to or with compensation for the meal and rest breaks. This may happen through an individual written agreement, collective-bargaining agreement, or a collective labour agreement.

The Consolidation of Labour Laws also regulates part-time work, which is the work that does not exceed 30 hours a week, overtime forbidden, or the work that does not exceed 26 hours a week, with the possibility of an additional six hours of overtime a week.

The compensation of part-time workers must be proportional to their working hours, with due regard to the amounts paid to the employees that work full-time on the same job.

If the part-time employment agreement provides for fewer than 26 hours a week, the additional hours will be considered to be overtime, also limited to six additional hours a week. The additional hours may be directly compensated until the week immediately after their performance, and they shall be settled in the payroll of the following month, if not compensated. Law 13,467/2017 guaranteed to part-time workers the right to vacation in the same proportion as the other employees governed by the Consolidation of Labour Laws and allowed the conversion of vacation pay increased by one third into a pecuniary bonus (abono).

 2.4 Compensation

"Minimum wage" is the minimum consideration owed and paid directly by the employer. It is a fundamental right of all employees. It is established by federal law and unified nationally. It must be adjusted periodically in order to maintain its purchasing power.

The Constitution prohibits its coupling for any purpose, and it shall not be used as an index for obligations.

The minimum wage shall meet the basic vital needs of the worker and their family, such as housing, food, education, health, leisure, apparel, hygiene, transportation, and social security.

The current minimum wage is of BRL1,045 (2020).

In the case of workers who work fewer than 44 hours a week, the minimum wage calculation is proportional, ensuring the hourly rate.

With due regard to the national minimum wage, it is also possible to establish other compensation floors:

professional minimum wage: it is also set by law, but it corresponds to the minimum amount paid to workers in certain categories or regulated professions (eg, physicians and engineers);

normative wage: set by a normative judgment as a result of a collective labour dispute;

agreed wage: set by a collective labour agreement or collective-bargaining agreement.

Due to inflation and consequent loss of the purchasing power of the wage, collective regulations usually provide for wage adjustments.

In addition to the basic wage, consideration paid by the employer, other amounts may be paid to the worker by virtue of the law or collective regulations. Below are some examples:

tips: paid by third parties (eg, clients), they become part of the worker's compensation and have repercussions on some labour charges;

bonuses (abonos): they traditionally corresponded to an advance on sums or wages, but Law 13,467/2017 removed their wage nature, giving them an indemnifying nature;

additional sums (adicionais): additional sums paid by the employer to the worker due to the provision of services under harmful circumstances (eg, work in dangerous, hazardous, or hard conditions; nighttime work, overtime; reassignment of the worker; extra duties);

awards (gratificações): paid by the employer to the employee due to a relevant event or circumstance, as defined by the employer or by the law; the 13th salary is an example of an award set forth in the Constitution, regulated by the law, and the amount of which corresponds to the compensation owed in December;

premium (prêmio): liberality granted by the employer in the form of goods, services or cash to the employee or a group of employees for a performance that exceeds what is normally expected. By express legal provision, it does not have a wage nature, but rather an indemnification nature;

profit-sharing: a sum not coupled to the compensation of the worker. It is contingent upon prior negotiation between the company and its employees, which may happen with the participation of unions or a parity commission chosen by the parties.

 2.5 Other Terms of Employment

Vacations are a situation of interruption of the employment agreement that allow the worker to rest and disconnect from work, without prejudice to the compensation. In addition to the regular compensation, the employee is entitled to an additional pay of one third of their wage, to be paid up to two days before they leave on vacation.

In general, the right to a 30-day vacation is accrued after the provision of services for 12 months, and the worker shall observe the attendance rules. If the worker resigns or is dismissed without cause before the end of these 12 months, they are entitled to proportional vacations.

The vacation must be enjoyed in the 12 months after the accrual of the vacation, and it may be divided into up to three periods (one of them shall not be shorter than 14 consecutive days and the others shall not be shorter than five consecutive days).

In addition to individual vacations, the employer may, by means of a unilateral act or collective regulation, grant collective vacations to all employees of the company, to workers of a certain establishment or of certain sectors.

For each week they work, the worker must be granted a period of 24 hours of paid rest, preferably on Sundays.

In addition to the situations above, the legislation provides for other cases of interruption of the employment agreement. Here are some examples:

maternity leave: paid leave for 120 days (may be extended to 180 days in the case of participation in the "Citizen Company Programme"). The benefit also applies to workers who adopt children or are awarded custody by a court;

paternity leave: paid leave for five days (may be extended to 20 days, as per the "Citizen Company Programme"). Also applies in the case of adoption and court-ordered custody of the child;

sick leave: granted to the employee for health-treatment reasons. The company pays the first 15 days of leave and the other days are paid by the Social Security System.

one day a year to accompany a child of up to six years old to a medical appointment.

Labour legislation does not expressly provide for confidentiality and non-disparagement requirements.

Such duties, however, derive from objective good faith, which must be respected not only during the term of employment agreement, but also in the pre- and post-contract phases. Additionally, nothing prevents the regulation of these duties by means of individual and collective negotiations. Violation of these duties may lead to civil liability (for property and moral damages) and, in certain cases, to criminal liability.

3. Restrictive Covenants

 3.1 Non-competition Clauses

The non-competition clause is a special clause of the employment agreement that intends to protect the confidentiality of the employer's business. Because of it the employee is obliged to refrain from working, on their own or for another employer, in the same activity or in activities related to that performed before, under penalty of damages and/or fine.

Since it represents a certain restriction to the freedom of work, protected by the Constitution, the non-competition clause included in the employment agreement must be governed by objective good faith, reasonability, and proportionality, and must meet certain validity requirements set by the jurists and court precedents:

time limitation: a reasonable duration must be set;

geographic limitation: depends on the spatial dimension where the employer's economic activity has an influence;

compensatory damages: the employee must earn a just financial compensation (eg, equivalent to the compensation they would earn if working as an employee, for a month, multiplied by the number of months the restriction lasts);

specification of the activity: it must be related to the professional activities performed under the agreement.

The clause may be in the agreement since the engagement, added during the term of the agreement (in a separate document or as an amendment to the agreement), or added upon termination.

 3.2 Non-solicitation Clauses – Enforceability/Standards

Although there is no legal provision in this regard, the clause on the non-solicitation of employees and clients is ruled valid by courts.

Its acceptance is also grounded on the objective good-faith principle that must govern parties on all legal transactions. It is advisable to set a reasonable term for the obligation and to define, as precisely as possible, the clients/employees that cannot be solicited.

4. Data Privacy Law

 4.1 General Overview

Law 13,709/2018 (General Data Protection Law - LGPD) is the Brazilian version of Regulation 2016/679 (General Data Protection Regulation - GPDR) of the European Community.

The LGPD provides for the treatment of personal data (ie, information related to identified or identifiable individuals) through physical and digital means, by individuals or legal entities governed by public or private law, aiming at the protection of fundamental rights such as freedom, privacy, and the free development of the personality.

The most relevant part of the law should have entered into force in August 2020, but the beginning of its effectiveness was delayed to 3 May 2021, as per Provisional Presidential Decree 959/2020.

The LGPD has a broad scope of application, being applicable to all legal relationships that involve the handling of data or information between the data subjects and individuals or legal entities that somehow have or obtain access to this data.

Although the LGPD is not mainly dedicated to the regulation of the treatment of personal data in employment relationships (unlike the GPDR), it is clear that the relationship between employees and employers, or between service-providers and companies, leads to the exchange of personal data.

This exchange of information happens at several stages of the relationship (including the pre and post-contract phases), such as when the employee sends a CV or applies for a position, participates in interviews, signs the employment agreement and occasional amendments thereto, is evaluated, inspected, or even punished, delivers medical certificates, and files labour claims.

As per the LGPD, the employee may be considered a "subject" of personal data, that is, the individual to which the personal data subject to treatment refers. For this reason, they have a number of rights before the employer, such as facilitated access to information on the data treatment.

"Treatment" is understood as every operation with personal data (eg, collection, production, receipt, classification, use, access, reproduction, transmission, distribution, processing, filing, storage, elimination, assessment, or control of the information, modification, communication, transfer, diffusion, or extraction).

The treatment of personal data is contingent upon the fulfilment of statutory requirements, such as the subject's consent - in the case of sensitive data (eg, data of nationals regarding the racial or ethnic origin, religious belief, political opinion, union membership, religious, philosophical, or political organisation, health, sex life, genetic or biometric data). In general, the consent must be specific and separated.

The employer may be considered a "treatment agent", either because it is a "controller" (individual or legal entity in charge of decisions related to the treatment of personal data) or an "operator" (individual or legal entity that performs the treatment of personal data on behalf of a controller).

The treatment of personal data must observe, in addition to good faith, several principles, such as:

purpose: the treatment must have lawful, specific, and explicit purposes informed to the subject;

need: the treatment must be limited to a minimum;

security: technical and administrative measures must be used for the protection of data;

damage prevention;

non-discrimination;

liability and accountability.

Thus, the employer must observe the provisions of the LGPD, under penalty of administrative sanctions or of being ordered to redress the damage.

5. Foreign Workers

 5.1 Limitations on the Use of Foreign Workers

The rights and duties of immigrants and visitors, as well as the procedures for the arrival and stay of persons in Brazil are mainly regulated by Law 13,445/2017 (Migration Law) and its regulatory decree (Decree 9,199/2017), among other decrees, ordinances, and resolutions of the relevant bodies.

The Brazilian migratory policy, regarding the employment relationship, is governed by the following principle and guidelines:

equal and free access of the migrant person to work;

guarantee of performance of statutory and contractual legal obligations, enforcement of worker protection rules, prohibition of discrimination based on nationality or migrant condition.

Foreign residents in the country theoretically have the same rights provided for the national workers in the Brazilian labour legislation.

However, there are some restrictions to the use of a foreign workforce, such as the rules on the "nationalisation of work".

As per the Consolidation of Labour Laws, companies that provide public services, industrial activities, or commercial activities, as a rule are obliged to have two thirds of its staff (when comprised of three or more employees) formed of Brazilian employees (this could be fewer, depending on the circumstances of each activity).

The rules on the nationalisation of work were established prior to the Constitution of 1988, however, which raises debate as to its compatibility with the Constitution, especially the principles of equality and non-discrimination. They also originate from before the Migration Law, which changed the paradigm by favouring a humanitarian perspective instead of the previous nationalistic perspective of the former Foreigners' Statute.

In addition to the general rules on the nationalisation of work, there are specific rules and laws restricting the exercise of certain activities and roles to Brazilians (eg, in the case of captains, chief engineers, and part of the crew of vessels under the Brazilian flag) and which impose assistance by Brazilian workers (eg, in the case of foreigners hired as engineers, architects, or agronomists).

 5.2 Registration Requirements

In order to work in Brazil regularly, the foreigner will need a visa.

The visa is a document that grants to its holder the expectation of entering Brazilian territory.

The visitor visa is granted for short-term stays with no intention of establishing residence (eg, tourism, business, transit, artistic or sports activities). The beneficiary of this visa is forbidden from carrying out paid activities in Brazil, but may receive payments from the government, or from an employer or private entity, in addition to competing for awards in competitions or contests.

The temporary visa is granted to those who enter Brazil with the purpose of setting up residence for a term for research, teaching, academic extension, work, work vacation, or investment purposes, or an activity with an economic, social, scientific, technologic, or cultural relevance, artistic or sports activities under a contract for a term.

The temporary visa for work may be granted to the immigrant who comes to work, with or without an employment bond in Brazil, as long as they prove they have a work proposal by a legal entity operating in Brazil; this requirement is dismissed if the immigrant proves they hold a college degree or equivalent degree.

Diplomatic, official, and courtesy visas are granted to foreign authorities and officials who travel to Brazil in a transitory or permanent mission, representing a foreign State or a recognised international body. Brazilian labour legislation does not apply to the holders of diplomatic and official visas.

For a foreign person to be able to work in Brazil, with or without an employment bond, they must also have a residence authorisation for work purposes granted by the Ministry of Labour's General Immigration Co-ordination Office. If the residence application is granted, the foreigner must go the Federal Police for the necessary registrations.

By virtue of an international agreement, nationals of the Member States of MERCOSUR, Bolivia and Chile have the right to residence and work without no other requirements but their nationality. The agreement provides for a simplified process to apply for a residence visa. The temporary residence, up to two years, may become permanent, if the requirements of the international treaty are met.

6. Collective Relations

 6.1 Status/Role of Unions

The main purpose of the union is to protect and co-ordinate the economic or professional interests of all those that, as employers, employees, autonomous workers, or self-employed professionals, exercise the same, similar, or related business activity or profession in the same territory.

The representation is automatic, regardless of the actual registration of the company or employee with the union.

Some professional categories, whether due to the exercise of professions with a special status or extremely singular roles, are exceptions to the union membership rules, which are based on the main activity of the employer: those are the differentiated professional categories (eg, lawyers, physicians, and engineers).

Employees who are members of differentiated professional categories are not entitled to the advantages set forth in a collective instrument in which the employer was not represented by a trade association for its category.

A union acquires legal personality with the registration in the Civil Register of Legal Persons, but its union nature depends on the union registration before the Ministry of Justice and Public Safety, through the National Office of Justice.

The main roles of unions are:

the judicial and extra-judicial representation;

negotiation, mainly aiming at the production of rules that are more beneficial that set forth in the law;

assistance, by providing services that contribute to the full development of the human being (eg, education, health, job placement, leisure, and legal services);

political.

The Brazilian union system comprises three levels of operation: unions, federations, and confederations.

Centrals are national entities that group unions, federations, and confederations of workers based on ideological criteria, regardless of the activities they represent. They are strictly political, co-ordinating the general representation of workers and participating in forums, collective bodies, and other social dialogue spaces. They cannot represent employees nor directly participate in collective negotiations.

 6.2 Employee Representative Bodies

The Constitution provides for the freedom of association to unions, forbidding the interference and intervention of the Government in union organisation.

The professional or union membership is free and, therefore, the law does not require State authorisation for the foundation of a union, except for the registration before the competent agency.

The freedom of association to unions, however, is not unlimited.

The single-trade-union rule adopted in Brazil forbids the creation of more than one union, at any level, to represent a professional or economic category in the same territory (in fact, the union registration requirement is meant to grant transparency and to ensure compliance with the single-trade-union rule).

Also by virtue of an express constitutional provision, although it is defined by the interested workers or employers, the territory of a union shall not be smaller than the area of a municipality.

The Consolidation of Labour Laws contains provisions on the organisation of the unions that, as per the courts' precedents, were received by the Constitution of 1988. For instance, there are rules on the management of a union, to be formed by:

a managing board of at least three and up to seven people;

a fiscal council formed by three members whose work is limited to monitoring the financial management;

a member of the managing board elected as chairperson.

The Consolidation of Labour Laws also sets requirements for the creation of federations and confederations: the former, comprised of at least five unions, must represent the absolute majority of a group of identical, similar or related activities or professions, and may be interstate or national; the latter are formed by at least three federations and their seat is in Brasília.

Law 11,648/2008, which provides for the centrals (which, to emphasise, are not parts of the Brazilian union structure), sets the following cumulative requirements for their creation:

having at least 100 unions, along five regions of Brazil, as members;

having members in at least three regions of the country and of at least 20 unions in each;

having unions in at least five economic activities as members;

having unions that represent at least 7% of the total of unionised employees in Brazil as members.

In addition to unions and centrals, the Brazilian legal system provides for the "representation of employees", the purpose of which is to promote understanding between employees and employers.

The representatives of employees at the companies are responsible for:

representing the employees before the company's management;

improving the relationship between the company and its employees;

to promote dialogue and understanding in the workplace, preventing conflicts;

finding quick and effective solutions for occasional conflicts;

ensuring fair, unbiased, and non-discriminatory treatment to employees;

presenting employees' claims;

monitoring the enforcement of laws and collective regulations.      

These commissions are mandatory in companies with more than 200 workers.

Depending on the total number of employees, the commissions may be formed by three, five, or seven members.

The process to choose representatives is regulated by Law 13,467/2017. All employees may run for representative, except:

workers hired for a term;

workers under a suspended agreement;

worker who are in the course of a prior notice.

The representatives' term is of one year, during which period they must continue with the performance of their roles.

From the registration of candidacy up to one year after the end of the term, the member of the commission shall not be arbitrarily dismissed.

The candidate elected for representative shall not run in the next two subsequent periods.

 6.3 Collective Bargaining Agreements

Collective negotiation is one of the main and most effective mechanisms of social pacification. Through reciprocal concessions, social directly involved players put an end to collective conflicts.

It also has other purposes, such as the creation of legal rules, the democratisation of power, the adjustment of rules to the particularities of certain regions, activities, and historical occasions.

The Constitution requires the participation of unions in collective labour negotiations.

When successful, collective negotiation may give rise to a collective instrument.

The drafting of negotiated collective instruments, although made in writing, is exempt from many formalities.

There are two negotiated collective instruments in the Brazilian legal system:

collective labour agreement: a legal transaction under which two or more unions that represent economic and professional categories stipulate working conditions applicable to the individual employment relationships, within the scope of the respective representations;

collective-bargaining agreement: a legal transaction under which the union that represents the professional category and one or more companies of the corresponding businesses category stipulate working conditions that are applicable, within the company or companies that are parties to the agreement, to the respective employment relationships.      

As a rule, collective labour agreements and collective-bargaining agreements prevail over legislation.

However, they cannot suppress or reduce rights provided for the Constitution and listed in Article 611-B of the Consolidation of Labour Laws, such as:

professional identification rules;

unemployment compensation, family wage, retirement, maternity leave, and paternity leave;

amount of the monthly deposits or of the Severance Pay Indemnity Fund (FGTS) indemnification;

minimum wage;

weekly paid rest;

compensation for extraordinary service of at least 50% more;

the number of vacation days, in addition to the enjoyment of annual vacations with a vacation pay increased by one third of the wage;

occupational health and safety standards, and additional payment in the case of dangerous, hazardous, or harmful activities.

The provisions of a collective-bargaining agreement always prevail over those set forth in the collective labour agreement, even if the latter is more beneficial.

Negotiated instruments may provide for two types of clauses:

economic clauses: these provide for the compensation, such as wage rises, wage floor, awards, overtime, etc;

social clauses: those that do not generate an immediate disbursement by the employer, such as life insurance, job guarantee for a term, occupational safety, and hygiene conditions, etc.

Collective-bargaining and collective labour agreements may be in force for up to two years and shall not have effect after that.

In order to discourage the violation of clauses in collective regulations, fines are usually set (late charges imposed due to a delay in the performance of the obligations, or compensatory charges with the purpose of compensating the other party for the losses caused by the non-payment).

7. Termination of Employment

 7.1 Grounds for Termination

As a general rule, in Brazil, it is not necessary to give a prior or later justification for the termination of the employment agreement.

However, there are exceptions, such as the case of employees protected by job guarantee and the employees of "Empresa Brasileira de Correios e Telégrafos", as ruled by the Superior Labour Court and by the Federal Supreme Court.

The termination of the agreement may happen on the initiative of the employee (resignation), of the employer (dismissal), and by mutual agreement.

It may also happen with cause. Although it is not mandatory, the employer and employee may terminate the employment agreement with cause, especially in the situations set forth in Articles 482 and 483 of the Consolidation of Labour Laws.

In the case of dismissal without cause, by the mere lack of interest of the company in continuing with the agreement, the employee is entitled to the balance of wage, prior notice, accrued and proportional vacation, vacation pay increased by one third, proportional 13th salary, FGTS balance, and a 40% indemnification over the FGTS balance, in addition to the unemployment compensation. In the case of an employment agreement for a term, the employee may also earn an indemnification corresponding to half the compensation to which they would be entitled until the end of the agreement.

In the case of a resignation, the 40% indemnification over the FGTS balance is not paid and the employee is not entitled to the unemployment compensation.

If it is an agreement for a term, the employee who wants the early termination shall pay an indemnification to the employer, which is limited to the amount of the indemnification they would be entitled to in the case of early termination of the agreement by the employer.

In the case of termination by mutual agreement, the employer pays half of the indemnification calculated over the FGTS balance and prior notice (if paid). The other sums are paid in full. The employee is not entitled to unemployment compensation and may use up to 80% of the amounts deposited in the FGTS account.

As for the dismissal with cause, the employee receives only the wage balance, accrued vacations, and vacation pay increased by one third.

In addition to the statutory severance pays previously mentioned, the employment agreement and the collective regulations may provide for other payments.

These are the procedures required in cases of termination, regardless of the type:

annotation in the employment record book;

reporting the dismissal to the relevant authorities;

severance pays and delivery of documents to the employee, which shall happen within ten days counted from the last day of work, under penalty of a fine;

delivery to the employee of the documents proving the communication of the contract termination to the relevant authorities, as well as the severance pays;

delivery of the unemployment compensation form (in cases of dismissal without cause) and proof of the FGTS deposit (in addition to the indemnification in cases of termination without cause or by mutual agreement) to the employee, so they may receive the compensation and use their FGTS account;

physical examination on dismissal, generally.

Since Law 13,467/17 came into force, collective dismissals were made equal to individual and multiple dismissals, and authorisation or prior negotiation with the workers' union for the mass dismissal is not required.

 7.2 Notice Periods/Severance

An employee or employer who wishes to terminate the agreement without cause must report this decision to the other party at least 30 days in advance for the employees on monthly wages, and at least eight days in advance for employees on weekly wages. This is called "prior notice".

The duration of the prior notice is also contingent upon the employee's length of service: employees with up to one year of work are entitled to a prior notice of 30 days, which is increased by three days per year of work of the employee, up to a total of 90 days.

During the prior notice, the worker may have their working hours reduced in two hours or may choose to terminate the prior notice seven days earlier.

The prior notice may be paid, in which case the employee is dismissed from working but will receive full payment for the period.

If the employee fails to give the prior notice, the employer may deduct it from the wage of the corresponding period.

In the case of termination by mutual agreement, the paid prior notice is half the usual amount. There is an omission in the law, however, on the worked period of prior notice. Therefore, the employee and employer shall jointly decide on how it will happen.

During the period of prior notice, the employer that performs an act that justifies the immediate termination of the agreement shall pay for the remaining period of the prior notice and shall be forced to complement the termination. In their turn, if the employee performs any act that justifies the termination with cause during the period of prior notice, they will lose the right to the remaining period and the severance pay may be reviewed and reduced.

 7.3 Dismissal for (Serious) Cause (Summary Dismissal)

Dismissal with cause happens when the employee or employer commits a serious act, set forth by the law, causing a breach of trust and rendering the continuity of the employment relationship impossible.

Actions performed by the employee that justify termination are mostly listed in Article 482 of the Consolidation of Labour Laws:

administrative misconduct;

improper conduct or bad behaviour;

customary engagement in transactions without the employer's authorisation;

sentence passed upon the employee by a criminal court;

negligence;

customary drunkenness;

breach of a company secret;

indiscipline and insubordination;

desertion of post;

any act detrimental to honour or assault committed at work or against a superior;

gambling;

loss of a professional registration or failure to meet the statutory requirements of the profession due to wilful misconduct by the employee;

acts against national security.      

For the termination with cause to happen, the act must be serious and supported by undisputable evidence. The penalty must observe the proportionality and reasonability principles, with double jeopardy being forbidden, as well as any discrimination between workers who committed the same violation. Termination must happen immediately, as soon as the employer becomes aware of the violation committed by the employee.

The employee dismissed with cause will be entitled only to the wage balance owed, accrued vacations, and vacation pay increased by one third.

Some employees are protected by a job guarantee and cannot be dismissed without cause.

The employee may also terminate the employment agreement with cause due to a violation committed by the employer. The "constructive termination" situations are listed in Article 483 of the Consolidation of Labour Laws:

if the employee is required to perform services which are beyond their powers, prohibited by law, contrary to morality, or not covered by the contract;

being treated by the employer or superiors with excessive rigour;

being at obvious risk of serious injuries;

non-performance of contractual and statutory obligations;

if the employer or its representatives violate the honour and good reputation of the employee or their family members;

if the employer or representatives of the employer assaults the employee, except in the case of legitimate self-defence (or defence of another);

if the employer reduces the work of an employee who is paid by pieces or tasks, materially affecting the wages earned.

Although there is a statutory requirement, the constructive termination is contingent upon the filing of a labour claim and a court decision, because it is unlikely that the employer will spontaneously recognise its own violation.

In constructive termination cases, the same severance pays of the dismissal without cause apply.

 7.4 Termination Agreements

For the possibility of settlements to terminate the employment agreement, three relevant amendments to the Consolidation of Labour Laws brought by Law 13,467/2017 are highlighted:

termination by mutual agreement: in this case, the employer pays half of the prior notice and of the FGTS indemnification, and pays the other severance sums in full. The employee is not entitled to unemployment compensation and may use up to 80% of the amounts deposited in the FGTS account;

ratification of extra-judicial settlements by the Labour Courts: the main advantage of this procedure is the legal certainty, ensuring a general release for the employee. In this non-litigious procedure, employer and employee shall be represented by different lawyers;

annual release instrument of the employment agreement: it may happen not only during the term of the employment agreement, but also after its termination. Through this instrument and before the professional union, the employee gives release of the obligations performed by the employer.

 7.5 Protected Employees

Since the Federal Constitution of 1988 entered into force, the job guarantee acquired after ten years of work (estabilidade decenal), provided for the Consolidation of Labour Laws, has ceased to exist. It stated that the employee who worked for more than ten years at the same company could not be dismissed, except for a serious violation or force majeure.

However, there are temporary job guarantees, which protect certain workers from termination without cause and for a certain period. Some examples of these job guarantees are mentioned as follows:

an employee elected for the Internal Commissions for Accident Prevention: the job guarantee begins with the registration of the candidacy and ends one year after the end of the term in office;

pregnant women: begins with the confirmation of pregnancy and ends five months after the birth;

union official: begins with the registration of candidacy and ends one year after the end of the term in office;

co-operative official: it is the same job guarantee as for union officials, from the registration of candidacy until one year after the end of the term in office;

victim of an occupational accident: job guarantee for at least 12 months after the end of the sick pay.

Collective regulations may also create temporary job guarantees, such as in the case of an employee who is about to retire.

Employees covered by the job guarantee can only be dismissed with cause; otherwise, the employee may be reinstated, earning compensation for the period they were not working.

8. Employment Disputes

 8.1 Wrongful Dismissal Claims

The illegal termination of the employment agreement may become the object of a lawsuit.

Employee wrongfully dismissed with cause may claim in court:

that the termination with cause should be turned into dismissal without cause;

severance pays as if the termination happened without cause;

moral damages (eg, if the worker is wrongfully accused of crimes).

If the former employee is covered by a job guarantee, they may demand that their dismissal be found null, and their reinstatement, or compensation for the period of the job guarantee, in addition to moral and/or property damages for losses suffered due to the dismissal be effected.

 8.2 Anti-discrimination Issues

The Constitution states that all are legally equal, with no distinctions. It also states that there will be no prejudice based on origin, race, gender, colour, age, or any other forms of discrimination, in addition to the prohibition of discrimination and distinctions in employment relationships based on colour, gender, age, marital status, disabilities, and type of work (manual, technical, or intellectual).

The Consolidation of Labour Laws has also tried to ensure (formal and material) equality and non-discrimination on employment relationships through several doctrines and provisions, such as the regulations on the wage parity and women's work.

However, this was not enough to stop discrimination in the work environment, which led to the creation of specific laws.

The most relevant of them is Law 9,029/1995, which forbids discrimination in employment relationships based on gender, origin, race, colour, marital status, family situation, disability, and professional rehabilitation, among other criteria.

This law also criminalises practices such as:

demanding tests related to sterilisation or pregnancy;

induction to genetic sterilisation;

promotion of birth control.

Violations of Law 9,029/1999 may lead to administrative fines and prohibition from obtaining loans from official institutions.

In its turn, Law 7,716/1989, defines crimes of prejudice based on race or colour, which includes the crime of denying or impeding a person from getting a job at a private company, punishable with two to five years in prison. The same punishment applies to those who fail to give the necessary equipment under the same conditions as other employees, who prevent professional development or impede the access to another professional benefit, and those who implement differentiated conditions on the work environment (especially regarding wages).

When an advertisement or any form of recruitment requires features that are specific to a race or ethnic group and this requirement is not justifiable, the perpetrator may be punished with a fine or community service.

Law 9,867/1999 provides for the creation of "social co-operatives built to help disadvantaged people enter the economic market through work".

Law 8,213/1991 sets a minimum number of people with disabilities that must be hired, the purpose of which is to help them enter the job market.

There is also Law 13,146/2015 (Brazilian Law for Inclusion of People with Disabilities), which contains several provisions on employment relationships, protecting the right to work (by free choice and acceptance), in an accessible and inclusive environment and with the same opportunities as other people.

The precedents of the Superior Labour Court have also settled where discrimination is presumed in the dismissal of employees with serious and stigmatising diseases (such as HIV patients).

As a rule, the burden of proving the discriminatory dismissal falls onto the employee. However, in cases of employees with serious or stigmatising diseases, the company has the burden of proving the absence of discrimination.

The worker who suffers discrimination for any reason may choose to be reinstated with full compensation for the period they could not work and may receive twice the compensation of the period they were not working. They may also be awarded moral damages.

With public civil action, it is also possible to obtain judgments against the employer for collective moral damage due to discrimination against groups of employees (eg, people with disabilities and women).

9. Dispute Resolution

 9.1 Judicial Procedures

The Labour Courts are bodies of the Judiciary Branch that are, in summary, specialised in conciliations and resolving conflicts derived from employment relationships.

The bodies of the Labour Courts are the Superior Labour Court, the Regional Labour Courts, and the Labour Court judges.

Labour Court judges work in Labour Courts and comprise the first degree of jurisdiction.

The 24 Regional Courts are formed by Appellate Judges and represent the second degree of jurisdiction.

The Superior Labour Court is the last degree of jurisdiction. It is formed by 27 justices. It operates en banc or divided into a Special Body, Sections, Specialised Sub-Sections, and Panels. It also operates as a guardian of the Federal Constitution and is tasked with the standardisation of labour precedents.

The labour claim may be filed:

in writing, with the assistance of a lawyer or the union;

verbally, when the worker goes to the labour courts, reports their situation, and presents the supporting documents.

In general, the parties' capacity to plead in court may only be exercised in ordinary levels of jurisdiction (Labour Courts and the Regional Labour Courts). Appeals to the Superior Labour Court may only be filed by a lawyer.

 9.2 Alternative Dispute Resolution

Arbitration is governed by Law 9,307/1996. It is an alternative way of dispute resolution involving waivable property rights.

Until Law 13,467/2017 was enacted, the possibility of solving employment relationship conflicts through arbitration was restricted to collective work conflicts, by express constitutional authorisation, and in accordance with the majority of scholars and precedents.

Law 13,467/2017, however, expressly authorised the arbitration in individual employment relations when the employee earns a monthly compensation that is above the average (more than twice the cap of benefits of the General Social Security Regime) and if an arbitration clause exists by the employee's initiative or upon their express agreement.

The arbitration award if recognised as a judicially enforceable instrument by the Civil Procedure Code and may be executed by the Labour Courts.

 9.3 Awarding Attorney's Fees

Law 13,467/17 amended several provisions of the Consolidation of Labour Laws, including the attorneys' fees for loss of suit in Labour Courts.

The fees are to be paid to the lawyer, even if they represent themselves, to be set between at least 5% and up to 15% of the sum resulting from the liquidation of the award, from the economic profit obtained or, if it is not possible to measure it, of the adjusted amount in controversy.

The purpose of the attorneys' fees for the loss of suit is to compensate the lawyer for the performance and diligence employed in the lawsuit.