1. Emergency Measures

Decrees, orders or guidelines in effect and pertaining to reopening facilities.

States and cities have different rules related to reopening facilities and, further, it also varies in accordance with the activity performed by the company. It is necessary to check the Decrees, orders and guidelines in effect for your type of activity and location before reopening.

Optimal approach to keep track of the latest updates.

States and cities usually have their own website with updated information about applicable COVID-19 rules. Here are some websites that include current information about the Decrees, orders or guidelines in effect in São Paulo and Rio de Janeiro:

General Controllership of the Municipality of São Paulo: https://www.prefeitura.sp.gov.br/cidade/secretarias/controladoria_geral/a_cgm/index.php?p=297823

Decrees of the Government of São Paulo with measures to prevent and combat the new coronavirus: https://www.saopaulo.sp.gov.br/spnoticias/decretos-do-governo-de-sp-com-medidas-de-prevencao-e-combate-ao-novo-coronavirus/

Attorney General of Rio de Janeiro publications related to COVID-19 State and Federal Legislation: https://pge.rj.gov.br/covid19/

2. State Aid

Government subsidies and special relief resources allocated to support employers, and workers, in their efforts to maintain employment and pull through the crisis.

On 1 April 2020, the Brazilian Federal Government issued Provisional Measure (MP) No. 936/2020, which established an emergency employment and employees’ income maintenance program (Program) and determined additional measures that could be adopted by companies during the COVID-19 pandemic. On 7 July 2020, the MP was converted into Law No. 14,020/2020.

The Program first established by the MP and now part of the Law No. 14,020/2020 has three defined goals:

• preserve employment and employees’ income during the state of public calamity;
• ensure continuity of work and business activities;
• reduce social impact caused by the coronavirus pandemic.

To achieve the goals of the Program, Law No. 14,020/2020 establishes the possibility to (i) reduce salary and working hours and (ii) to suspend employment agreements. Law No. 14,020/2020 also establishes an Emergency Benefit to be paid by the Federal Government to the employees, when the reduction of working hours/salary or suspension is implemented (see section VI. Cost-Reduction Strategies, part a. Furloughs and salary reductions for more information).

3. Health and Safety Measures

Requirements mandated by law or any official guidance.

States and cities have different rules, both compulsory and recommended, regarding healthy and safety measures, which vary in accordance with the activity performed by the company. Nevertheless, the employer has the duty to preserve the employees’ rights to perform and develop their activities in a healthy and safe work environment. Thus, preventive measures should be implemented by employers.

Recommendations:

• promote a specific coronavirus prevention program, with support from SESMT (Specialised Service in Safety Engineering and Occupational Medicine) and CIPA (Internal Commission for Accidents Prevention), with distribution of posters and booklets on care and hygiene.
• as much as possible, establish policies for aerating workplaces, opening access and availability of sanitizer in entries/exits and other strategic locations in the high-traffic/common areas.
• establish permanent visits to the different workplace stations/areas to verify the effectiveness of the prevention measures and their compliance by employees.
• inform and frequently provide guidance to employees concerning the consequences of the COVID-19 disease and about routine changes in the workplace.
• identify marginally suspicious cases (either employees with flu-like symptoms or those who have, or have had, contact with potentially infected people) and arrange for their immediate removal from the workplace.
• inform employees, in the event of a suspicion or confirmed case of infection, without disclosing the worker’s name, in order to balance the right to privacy with the right of co-workers to be informed of potential risks.
• provide the necessary referral for medical care for employees with flu-like symptoms.
• take the necessary measures to refer the sick employee to the Social Security Agency, after the 15th day of consecutive sick leave, in accordance with the social security legislation.
• allow paid leave for employees that need to take medical tests to identify the disease.
• establish minimum distances between employees during the execution of activities and while using common areas, such as cafeterias, changing rooms, resting areas, etc.
• allow remote work according to the need, possibility and nature of the activity of the company.
• establish a rotation scheme to have a portion of the employees working both from home and at the company’s workplace.
• in those cases where employees who use public transportation prove to be subjected to agglomerations, if possible, temporarily offer free alternatives or more individualised means to commute.

Measures typically implemented by employers and the associated legal risks, limitations, obligations and issues to consider.

Measures recommended and typically implemented:

• cleaning measures, obligations to wear masks, physical workplace modifications, social distance at the workplace, guidelines regarding the use elevators and the company’s common areas. No associated risks.

Measures adopted by some companies and those that may be mandatory depending on employer’s activity and location:

• temperature monitoring (does not require the employee’s consent);
• COVID-19 testing (the employee’s consent is required).

In both cases, the employer should be careful to avoid any type of discriminatory treatment, must provide the employees with information on the data that is collected and they should be conducted by a health professional (e.g. doctor, nurse, technical professional in health, who works at the company or is hired by the company for such purposes). Also, the employer should have a protocol in place on how to proceed in view of the results verified. We recommend deleting the information as soon as it becomes irrelevant.

Additional measures:

• social distancing technology and contact tracing tools (though neither are, at this time, very common in Brazil, the employee’s consent is required)

Employers should be careful to avoid any type of discriminatory treatment and must provide the employees with information on the data that is collected. Here too, it is recommended to delete the information as soon as it becomes irrelevant.

4. Teleworking

Policies and procedures for telework once the business reopens.

Telework remains an option and is an alternative already established by the Brazilian Labour Code (CLT). It requires amendments to the employment contract, health and safety guidelines, and agreement by the parties with respect to infrastructure and costs.

Guidelines issued by some states and cities, advise employers to continue to offer accommodations for employees who need to continue to work remotely (e.g. employees who fall within one or more at-risk-groups).

Recommendations for teleworking:

• provide at least the minimum work conditions for the employee (computer, accessories, internet, etc.);
• if the employee is not released from control of working hours, advise him/her to fill out a spreadsheet with the working hours actually performed, with subsequent delivery to the manager or the HR department;
• issue, in writing, instructions to the employee regarding the observance of ergonomics, conservation of the equipment provided by the company, organisation, concentration and fulfillment of tasks;
• if necessary, issue a warning or suspension via teleconference (e.g. video or audio teleconferencing platforms like Skype and Zoom) and confirm the application of the disciplinary measure in writing, by email;
• in case of termination during this period, the company should observe the mandatory termination procedures, such as payment of the mandatory severance and delivery of the termination documents within 10 days, counted as of the last day worked. The termination medical examination will be necessary, unless a work-related medical examination, performed in the last 180 days, already exists.

5. Managing COVID-19-Related Employee Issues

Management of quarantine, childcare and medical leave for employees affected by COVID-19.

Brazil does not recognise family leave, administrative leave or unpaid parental leave. However, employers may choose to adopt unpaid leave if requested by employees. Employees affected by COVID-19 will be on medical leave. Employers are responsible for the payment of the regular remuneration during the first 15 days of leave, and the social security agency is responsible for the payment of a sick leave allowance for the remaining period of the medical leave. Depending on the terms of the applicable collective bargaining agreement, employers may have to pay a supplementary sick leave allowance.

Employees who fear infection and refuse to work.

We recommend verifying if there is any valid reason other than a “fear of infection”. Depending on the situation, employers may agree on remote working or may demand the immediate return to in-office work. Disciplinary measures may also be adopted.

Disclosure of employees who are infected.             

Individuals who may have been exposed to suspected or confirmed cases of infection, should be advised to monitor their health for 14 days from the last day of possible contact. However, in general, the name of the infected employee should not be disclosed; employers should communicate just the department where he/she works.

6. Cost-Reduction Strategies

To what extent can employers implement the following cost-reduction strategies as a result of COVID-19, and what are the primary limitations on each? 

• Furloughs and Salary reductions.

(Click here to download the image in PDF)

NOTES

• Current maximum amount of the unemployment insurance: BRL 1,813.03.
• Companies must inform the Ministry of Economy and the employees’ union within 10 days, counted as of the execution of the agreements.
• The monthly allowance does not have salary nature (i.e., it is not subject to labour and social security charges). The monthly allowance may be granted by the employer in all alternatives above, but it is only mandatory in the situation detailed in the chart above.
• Employee’s job stability: during the period of the salary / working hours reduction or temporary suspension of employment agreement and an equal period thereafter.
• For pregnant employees: the stability period of Law No. 14,020/2020 will only start to count after the end of the job stability period already guaranteed to pregnant employees by Brazil’s Federal Constitution. Hence, after the end of the period of 5 months after the delivery of the baby, the employee will still be entitled to the job stability period of Law No. 14,020/2020.
• Termination without cause may be executed during the employee’s job stability period, however, it will result in the payment of the mandatory severance + an additional indemnification established in Law 14,020/2020, except for employees with disabilities who cannot be terminated without cause during the state of public calamity.
• It is possible to adopt both alternatives (reduction of salary + temporary suspension of employment agreement) for the same employee if the limit of 180 days is observed.
• Other situations in which the Law No. 14,020/2020 allows individual written agreements to perform reduction of salary and working hours or suspension of the employment agreement:
  • When the total amount received monthly by the employee is kept: in case of proportional reduction of working hours and salary or temporary suspension of the employment agreement when the individual agreement negotiated does not result in a reduction of the total amount received monthly by the employee, on a monthly basis, including in this amount (i) the Emergency Benefit paid by the Government, (ii) the monthly allowance offered/paid by the employer and (iii) in case of working hours reduction, the salary paid by the employer due to the remaining working hours.
  • Retired employees: employees who are already retired in accordance with the Brazilian rules and receive the retirement benefit from the Government, but continue to have an active employment agreement, are not entitled to receive the Emergency Benefit. However, the employer may still adopt the measures for proportional reduction of working hours and salary or temporary suspension of their employment agreement through an individual written agreement if, in addition to the requirements mentioned in the chart above for the execution of an individual written agreement, the employer pays a monthly allowance in accordance with the following conditions: (a) the amount of the monthly allowance must be at least equivalent to the amount of the Emergency Benefit that the employee would receive if he/she was not retired; (b) in the case of an employer with a gross revenue higher than BRL 4.8 million in the calendar year for 2019, the amount of the monthly allowance must be at least equal to the sum of the amount mentioned in the previous item (a) and the amount equivalent to 30% of the employee’s salary.

Besides the alternatives established by Law No. 14,020/2020, enacted in view of the COVID-19 pandemic, the Brazilian Labour Code previously  recognised the possibility to suspend employment agreements for a period of 2 (two) to 5 (five) months for professional qualification (e.g. the participation of the employee in a course or professional qualification program offered by the employer). Over the course of the COVID-19 crisis, most employers have decided against employing this option. To adopt this alternative, there are several aspects that the employer must be aware of, including the necessity to negotiate a collective bargaining agreement with the employees’ union. During the suspension of the contract, the employee may apply for a professional qualification scholarship granted by the Special Secretariat for Social Security and Labour, linked to the Ministry of Economy (for more information, please visit http://trabalho.gov.br/seguro-desemprego/modalidades/bolsa-qualificacao).

• Redundancy

Redundancy is considered a termination without cause in Brazil. There is no rule currently in place that forbids termination during the COVID-19 pandemic. Thus, companies may continue with to take such action during this period, upon the payment of the mandatory severance. Although negotiations with unions are not mandatory to perform large scale/mass terminations, depending on the size of the company, location and union representing the employees, we recommend negotiating with the union before carrying out such terminations.

An alternative that may be adopted in large scale/mass terminations, would be to negotiate with the union and implement an Incentivised Dismissal Program (“PDI”), where the company offers other benefits in addition to the mandatory severance, and employees who wish to receive these additional benefits, voluntary elect to be terminated, and also grant full release to the employment agreement.

• Facility closure.

The Brazilian Labour Code provides that in the event of partial or temporary interruption of the business activity, or the closure of a company due to a determination of a public authority, the employer may consider the employment contracts to be extinguished and claim “fact or order of the Government” (Government Act – “Fato do Príncipe”). As a consequence, the compensation due to employees, related to this period, shall be paid  by the respective public authority. We recommend that employers proceed with great caution when considering this option, because, in a court proceeding, it will be very difficult to obtain a favorable decision recognising this condition.

The most common procedure is to terminate the agreements without cause, upon the payment of the mandatory severance. Depending on the number of employees to be terminated, location of the company and the union that represents the employees, a negotiation of the terminations with the union is recommendable, as well as the alternative option to adopt the Incentivised Dismissal Program (“PDI”) mentioned above.

7. Best Practices

Tips, recommendations and common pitfalls.

We recommend updating policies regarding health and safety measures in the workplace, implementing employee training programs, evaluating the need for work-related travel and in person meetings, accommodating employees of at-risk-groups or those who live with members of an at-risk group, adopting reduced in-office working hours, rotating shifts for (groups of) employees, flexibility in working hours and offering the option for teleworking, if possible.