Labor Legislation in Brazil
Contractual laboral relations in Brazil are governed by two legal pieces: Federal Constitution and a decree known as Consolidation of Labor Laws (C.L.T.) - see text below. All the private sector must follow C.L.T., as well as part of the civil service; the majority of the civil service and all the military do not sign contracts, but, instead, they have all their laboral status defined by laws.
There is a movement toward consensus that the Brazilian labor legislation is outdated.
The Constitution of 1988 was promulgated after a period of dictatorship (the Unions were particularly affected during that period); analysts say that, as a consequence, the constitution suffered of a overshoot of rights: many rights were granted, without regards to: declaring who has the duty to guarantee the exercizing of the rights (art. 6 determines that education and health are social rights, but who's to respond if children have no schools or hospitals?); economic reality (art. 7, item IV states that the minimum wage must be high enough to pay for all basic needs of a family; economics, however, pushed the salaries to much lower levels).
The C.L.T. was promulgated in 1943, by dictator President Getulio Vargas; Brazilian society was then changing from rural to urban. To protect workers from abuse, in a unregulated (because incipient) labor market, the C.L.T. of populist Vargas was basically a declaration of the rights of workers.
C.L.T. also consolidated the Labor Justice in Brazil; reality has shown that: labor judges and courts have a lot of power (they can determine, e.g., how much the salaries of a litigant category must raise); employees see indemnizations as an off-salary compensation; employers have another reason to think twice before hiring a new employee.
Some ammendments and alterations occured over these more than seven decades, but much of the law remains the same. Thus, several profound changes in Brazilian society, like urbanization, demographics, technology, etc, are not reflected in C.L.T.
Some consequences of these distortions: lower salaries to workers (employers have several non-salary expenses associated with each employee); tendency to informalization, with impact on the Social Security system; uncertainties for employers (Justice claims, dificulties to lay off workers), which decreases investments; higher unemployment rates.
Talks are in progress in the Parliament for deep changes in the legislation. Government, corporations and workers agree in that things must change; however, each party seems to have different priorities.
In the Brazilian Constitution, the Social Rights (which include the Labor rights) are mentioned in articles 6 to 11. Article 7 starts with: "The following are rights of urban and rural workers, among others that aim to improve their social conditions:" and is followed by 24 social rights.
These constitutional rights can not be ignored either by laws, or -even less so- by contractual agreements. So, all Brazilian workers have rights to, for example, a severance-pay (funded by employers, at 8% of monthly salary), a 13th annual salary (equal to the montly salary, usually paid half before June and half in December), annual vacation (30 days, plus a cash bonus equal one third of salary), and others. Again: these rights can not be negotiated between the parties; either a contract is signed with all these rights, or an informal deal is agreed upon.
Consolidation of Labor Laws
The main Labor law is Decree-law nr. 5452, promulgated on May 1st. 1943, known in Brazil as CLT - Consolidacao das Leis do Trabalho (Consolidation of Labor Laws). Click the link for an integral and updated version of the C.L.T.; not surprisingly, this law had many alterations over its over 70 years of existance; click to see a historic of alterations in CLT
Below, a break down of CLT by articles:
Several of the articles describe the Carteira de Trabalho, a small (palm hand sized) official notebook where all the information regarding one's laboral life is registered. There are talks about making this info digital, but workers still depend heavily on keeping their papers updated.
Failing to comply with any ONE of the articles is ground for a labor claim.
Further obligations are imposed to employers of these groups and categories. Examples:
Art. 647 - 667 Institute the Joints of Conciliation and Justice. JCJs are the first to examine claims. JCJs must attempt a conciliation between parts; if one is one reached, the JCJs must judge the cause. The law determined that the JCJs would be composed of one president and two vocals, each representing the employers and the employees. Recent changes extinguished the vocals.
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