In addition to the reduction in wages and suspension of contracts established by MP 936 and summarized in the previous explanatory table, other labor alternatives include:

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 point of view of labor law, the new legislation provides for the adoption of isolation and quarantine measures that must be complied with, as well as compulsory medical examinations and laboratory tests.

For cases of isolation and quarantine (determined by health professionals and authorities), the law determines that the worker’s absence from work will be considered as justified absence, and the employer will continue to be obliged to pay wages for the first 15 days.

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.

b) Telework, anticipation of vacations, suspension of FGTS and other recent labor alternatives
(MPs no. 927 and 928/2020)

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 care facilities: Possibility of extending the workday by written agreement and the possibility of adopting overtime shifts between the 13th and 24th hours of the work 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.

EXISTING (PRE-PANDEMIC) MECHANISMS FOR DEALING WITH LABOR ISSUES

In addition to the measures already announced, there were already some options in the 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 now.

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:

a. Lay off

The suspension of labor contracts and salary reductions to address the crisis generated by the coronavirus pandemic was specifically addressed by Provisional Measure 936 on April 1, 2020.

However, there were already possibilities for suspension and reduction of wages in Brazilian law, which can still be used if the company’s planning does not adhere to the exact terms of PM 936.

Besides the recent MP, Brazilian law already provided for it:

• 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).

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.

In both cases there must be collective bargaining with the Union because they do not count on payments by the Government.

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.

b. 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.