Introduction
In Brazil, Labour Law is protective of employees. Some basic principles implicitly or expressly provided by Law will govern any employment relationship in Brazil. The most relevant principles are: (a) prevalence of facts: in the determination of labour consequences, the relevant facts surrounding an employment relationship will prevail over formal documents; (b) prohibition of detrimental changes: employers are prevented from making changes to employment terms and conditions that are detrimental to employees, whether or not the employee has previously consented with the change; and (c) joint liability (group of companies): companies belonging to a group of legal entities under the same control, direction or management are jointly liable for the obligations of any company belonging to such group with respect to employment relationships.
Key Points
- The most common practice is hiring workers as employees.
- Employment agreements in Brazil are usually for indefinite term; fixed term employment agreements are only allowed in specific situations.
- All companies and employees are mandatorily represented by Unions.
- Employments are at will, meaning that any party may terminate the employment agreement without cause upon mandatory prior notice and payment of the severance.
- Work permits must be requested whenever a foreigner wants to work in Brazil.
Legal framework
In Brazil, labour relations are a matter of Federal law, so the States and Municipalities have no power to legislate over labour matters. Therefore, labour rights are nationally standardised and the same labour costs and consequences will apply regardless of an employer’s place of business or place of incorporation.
The basic principles concerning labour relations in Brazil are contained in the Labour Code, the so-called “Consolidação das Leis do Trabalho – CLT”, enacted on 1 May 1943. On 11 November 2017, the Labour Reform became effective. It changed more than 100 articles of the Brazilian Labour Code. The changes intended to: (i) update the Brazilian Labour Code, (ii) improve labour relations, (iii) value collective negotiations between workers and employers, (iv) reduce the number of labour claims filed every year, (v) reduce the workforce informality, and (vi) simplify labour procedures.
New Developments
Since 21 March 2023, because of law 14.457/2022 enacted in September 2022, companies that mandatorily should have a CIPA (now called “Internal Committee for Accident Prevention and Harassment”) must implement measures to combat and prevent sexual harassment and other forms of violence in the company. In summary, companies that already have the obligation to have CIPA, must (i) review its internal policies to address prevention and combat measures of sexual harassment and other forms of violence, (ii) set forth procedures for complaints (e.g., independent and anonymous hotlines/report lines), (iii) include the subject in CIPA’s activities, and (iv) perform trainings, at least on an annual basis, to the employees on the subject.
