The world is experiencing an unprecedented pandemic due to the new coronavirus agent (COVID-19). Inevitably, some economic sectors will be greatly affected, since, for To prevent the spread of the virus, several restrictive measures are being adopted, especially to avoid contact between people.

Please note that this newsletter was finalized on 03/25/2020 at 4:00 pm and that our team is closely following the changes in the legal scenario, seeking the best alternatives for our clients. We know that the unique and unprecedented conjuncture will continue to bring a series of day-to-day modifications, which demand well-informed and parsimonious decision-making. We will be updating every minute and constantly prepared to inform you of all significant changes during this period.

1. recent measures

a. Law 13.979/2020 – MEASURES TO TACKLE THE PUBLIC HEALTH EMERGENCY

The first rule issued about COVID-19 was Law no. 13,979, of February 6, 2020, regulated by MS Ordinance no. 356, of March 12, 2020.

From the labor law point of view, the new legislation foresees some situations that draw attention from the labor point of view, such as the adoption of isolation and quarantine measures of compulsory compliance, as well as the compulsory performance of medical examinations and laboratory tests.

For these cases, the law determines that the worker’s absence from work will be considered as justified absence, and the employer’s obligation to pay wages during the period of absence will remain.

The employee who is off work for more than 15 days, as long as he meets the other requirements required by law, will be entitled to ordinary sick pay, as of the 16th day off work.

So far there has been no change in the social security legislation in face of the possible restrictive measures of Law 13,979/2020. Thus, it remains mandatory to establish the inability to work, by means of a medical examination by the INSS.

For the purposes of the provisions of Law No. 13,979/2020, it is considered:

• Isolation: separation of sick or contaminated persons, or affected baggage, means of transport, goods or postal parcels, from others, in order to avoid contamination or spread of the coronavirus;

• Quarantine: restriction of activities or separation of suspected contaminated persons from those who are not ill, or of suspected contaminated baggage, containers, animals, means of transport, or goods, in order to avoid possible contamination or spread of the coronavirus;

We highlight the Interministerial Ordinance nº 5/2020, published on 3/17/2020, which establishes that the non-compliance with the measures foreseen in article 3 of Law 13,979/2020 will result in the civil, criminal, and penal accountability of the offending agents.

The duty to communicate and share information lies with the occupational physicians. However, the company may collaborate with the health authorities in the immediate communication of: (i) possible contacts with coronavirus infectious agents; and, (ii) circulation in areas considered as coronavirus contamination regions.

The sharing of essential data to identify people infected or suspected of being infected with COVID-19 is mandatory and its sole purpose is to prevent the spread of the disease. However, this obligation will also extend to companies when the data is requested by a health authority.

b. MP’s no. 927 and 928/2020 – LABOR ALTERNATIVES FOR FACING THE STATE OF PUBLIC CALAMITY

On 03/22/2020 the Federal Government published the Provisional Measure no. 927/2020 with the main labor measures to face the state of public calamity and public health emergency of international importance due to the coronavirus (COVID-19).

The MP regulated some of the options that were already being used by companies, such as telecommuting, further reducing the labor risk involved in such practices. The MP considers validated the labor measures adopted by employers in the thirty-day period prior to the date it goes into effect, as long as they do not contradict the provisions of the MP.

The main point of PM 927/2020 is the possibility of entering into individual written agreements with employees, regardless of the salary amount, which will prevail over other normative, legal, and negotiating instruments, as long as the limits of the Federal Constitution are respected.

However, after a number of criticisms of PM 927/2020, especially regarding the possibility of suspending employment contracts for 4 (four) months by means of an individual agreement between the parties, without any type of compensation, the Federal Government revoked this possibility by means of PM 928/2020 published on 03/23/2020.

MP 928/2020 also amends the Access to Information Law (Law 12.527/2011), suspending response deadlines for Public Administration bodies or entities that are in quarantine, telecommuting or equivalent, and that rely on:

• face-to-face access by public officials in charge of the response; or
• public agent or sector primarily involved in the measures to confront the pandemic of the new coronavirus.

Thus, with the repeal of article 18 (suspension of labor contract) by MP 928/2020, the main measures to tackle the crisis proposed by the Government with MP 927/2020, were:

Teleworking

• Possibility of changing the work regime without individual or collective agreements;
• Communicate the change to the employee 48 hours in advance;
• Not subjecting employees to time control or overtime pay;
• Provisions about the necessary infrastructure must be laid down in the written contract;
• If the employee does not have the equipment and infrastructure for telecommuting: (i) the employer will provide the equipment on a loan basis and pay for infrastructure services; and (ii) if the equipment cannot be provided, the working hours will be counted as time at the employer’s disposal;
• Telecommuting is allowed for interns and apprentices.

Individual and Collective Holidays

• The deadline for communicating vacations (individual and collective) is now 48 hours;
• Vacation may be granted, even if the employee has not completed the vesting period;
• The payment of the constitutional third of vacation can be made until December 20;
• Vacation pay can be paid until the fifth day of the month following the start of the vacation;
• The cash bonus (sale of vacation) will depend on the employer’s agreement;
• The maximum limit of annual periods and the minimum limit of calendar days provided for in the CLT for collective vacation do not apply. Previous communications to the local body of the Ministry of Economy and Trade Unions are dispensed with.

Holidays

• Non-religious holidays can be brought forward. The use of religious holidays depends on the employee’s agreement;
• Advance notice must be given 48 hours in advance;
• They can be used to compensate the time bank balance.

Hour bank

• Possibility of conclusion by individual or collective agreement;
• Compensation within 18 months, counting from the date of the end of the state of calamity.

Suspension of Administrative Requirements on Occupational Health and Safety

• The obligation to carry out the occupational medical exams and periodic training foreseen in the NR’s is suspended;
• Dismissal examination is mandatory, but may be waived if the last medical examination was performed less than 180 days ago;
• CIPA’s can be maintained until the state of public calamity is over, and the electoral processes in progress can be suspended.

Suspension of the FGTS payment deadline

• Suspends the demand for FGTS payment for March, April and May 2020. It is valid for all employers;
• The collection can be made in up to 6 monthly installments, starting in July 2020;
• The employer is obliged to declare the information until 06/2020, and the information provided will characterize a debt confession and the amounts not declared will be considered to be in arrears;
• In case of contract termination, the employer will be obliged to collect the corresponding amounts and the termination fine.
  

Other Provisions

• Employees in health establishments: Possibility of extending working hours by written agreement and possibility of adopting overtime shifts between the 13th and 24th workdays and 24th time of the interjourney break. Such hours can be compensated by means of a time bank (compensation over 18 months) or paid as overtime;
• Suspension of procedural deadlines for administrative processes for 180 days;
• Cases of coronavirus (COVID-19) contamination will not be considered occupational, except upon proof of the causal link;
• Collective agreements and conventions that have expired or are due to expire can be extended for 90 days;
• For 180 days from the date the MP goes into effect, the Labor Inspectors will act in an orienting manner, except regarding the following irregularities: (i) lack of employee registration; (ii) situations of serious and imminent risk; (iii) occurrence of a fatal work accident; and (iv) work in conditions analogous to slavery or child labor.

2. Existing Mechanisms (pre-pandemic) for Dealing with Labor Issues

In addition to the measures already announced, there are some options in current legislation for application in times of crisis that, although not specific to the current pandemic situation, are valid solutions that can be implemented by employers right away.

Some of these options, especially those dealing with pay and working hours reduction, depend on collective bargaining, but others can be agreed upon directly with the employees. See below, in a summarized way, each one of them:

Lay Off

Lay-offs are provided for in two ways in the legislation:

• Temporary reduction of the working day and of the employee’s salary (Article 7 of the Federal Constitution and 611-A of the CLT); and
• Suspension of employment contracts for professional requalification (article 476-A of the CLT).

In both cases there must be collective bargaining with the Union.

The first hypothesis deals with the reduction of wages and working hours to adapt to temporary retraction scenarios.

The option foreseen in article 476-A of the CLT foresees the suspension of contracts for a period of two to five months, requiring as a counterpart the funding of a professional qualification course or program.

As the contract will be suspended and no wages will be paid, the object of the negotiation with the Union will include monthly compensatory aid (such as scholarships) and maintenance of benefits such as health insurance.

This possibility had been included in the Provisional Measure 927/2020, by individual negotiation, but it was harshly criticized, especially for allowing employees to go 4 months without wages and without any counterpart from the government (release of FAT or unemployment insurance) or from the company.

Paid leave

In paid leave, the employee stops providing services for a certain period of time, without loss of pay. In this case, the leave period counts as a period of service, since it constitutes an interruption of the employment contract with normal payment of wages.

It is recommended that the leave, even if paid, be reduced to writing, in order to provide a deadline for returning to work, with the possibility of extension or suspension at any time, due to the exceptional situation in which the leave is granted.

We clarify, finally, that the above text is not exhaustive and does not represent or replace a specific recommendation from an analysis of the case.

The labor team at DDSA – De Luca, Derenusson, Schuttoff Advogados will be available to guide its clients.