Brazilian Congress approves the Provisional Measure of Economic Freedom

On 21 August 2019, the Senate approved the final text for conversion into law of the provisional measure 881/2019 (“PM No. 881”), the so-called “Provisional Measure of Economic Freedom”.

The Provisional Measure of Economic Freedom seeks to reduce the bureaucracy of entrepreneurial activities, especially those at low risk, and, with minimum intervention from the government. If approved, it will affect several different aspects of Brazilian law, including corporate, tax and labour.

In what regards the labour aspects, the final text of the Provisional Measure determines that only companies with more than 20 employees will be required to implement a system to control the employees’ work shift. Currently, the system is mandatory for companies with more than 10 employees.

In addition, the PM No. 881 allows the adoption of the system to control work shift known as “per exception”, not only through collective bargaining agreements, but also by individual agreement, executed directly between the employer and the employee.

The text also affects: (i) the “e-social” (“digital bookkeeping system for tax, social security and labour obligations”) that will be replaced, and (ii) the work booklet, which will become an electronic document, among other aspects.

However, one of the most controversial aspects of PM 881, which allowed for work on Sundays and holidays for all business activities, was withdrawn from the final text. This issue will probably be re-discussed later through a specific law.

The Provisional Measure is now with the President for approval or veto, whether partial or total.