Dear Clients,

On March 22, 2020, the Federal Government published Provisional Measure no. 927/2020 with the main labor measures to face the state of public calamity recognized by Legislative Decree n. 6/2020 and the public health emergency of international concern due to the coronavirus (COVID-19).

In general, 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 valid the labor measures adopted by employers in the thirty-day period prior to the date it goes into effect, if they do not conflict with the MP’s provisions.

The main point of the MP 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.

The MP also expressly states that the present state of calamity constitutes force majeure for the purposes of the Labor Law.

The main measures proposed by the government with the MP to tackle the crisis were:

1. 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 a 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.

2. Individual and Collective Holidays

• The employer may put employees on vacation (individual or collective) with 48 hours notice;
• 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 may be paid until the 5th day of the month following the month in which the vacation begins;
• 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.

3. Holidays

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

4. Hour bank

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

5. Suspension of Administrative Requirements on Occupational Health and Safety

• The requirement for medical examinations and periodic training is suspended;
• Only the termination examination remains mandatory, but it can be waived if the last medical examination was performed less than 180 days ago;
• CIPAs can be maintained until the state of public calamity is over, and ongoing electoral processes can be suspended.

6. 
   Suspension of Contracts and Salaries – Lay Off
   
   
   Lay Off
   
   

• The MP initially provided for the suspension of the labor contract and wages for up to 4 months for participation in a professional qualification course or program offered by the employer, which would depend on individual agreement with the employee or group of employees but not on union negotiation. On the same day of its publication, however, President Jair Bolsonaro announced the “repeal of the measure.” A new PM addressing the issue is awaited.

7. Suspension of the FGTS payment deadline

• Suspends the demand for FGTS payment for March, April and May 2020. 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 June 20, 2020, and the information provided will characterize a confession of debt and the amounts not declared will be considered in arrears;
• In case of contract termination, the employer will be obliged to collect the corresponding amounts and the termination fine.

8. Other Provisions

• Employees in health establishments: Possibility of extending the workday, including for unhealthy activities, by individual agreement and with the possibility of compensation within 18 months;
• Suspension of procedural deadlines for administrative processes for 180 days;
• The 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 at the company’s discretion;
• Limitation of the work of labor inspectors for a period of 180 days from the date the MP goes into effect.

MP 927/2020 takes effect immediately and is provisionally valid for 120 days.

The above text is not exhaustive and does not represent or replace a specific recommendation from an analysis of the case. DDSA Advogados will be available to guide its clients regarding the applicability of Provisional Measure 927/2020.