The Brazilian Labor Public Minister (MPT) website reports that since the beginning of the coronavirus pandemic until April 28, 2020, it has received more than 10,000 complaints, issued more than 7,000 recommendations, and opened 2,078 inquiries. Also, it issued 19,218 orders and 30,224 documents, among notifications, letters, and requisitions, all concerning COVID-19.

According to the MPT, most of its institutional work with companies focus on protecting the worker’ health and safety, on raising awareness among employers about the importance of preventing the dissemination of the new coronavirus in the workplace.

These are important information and data that demonstrate the MPT’s active role and should be used as an alert for companies regarding the risks and their prevention, especially when considered the possible framework of cases of contamination of employees by COVID-19 as a labor disease.

In this respect, by definition, occupational illness is the one acquired or triggered as a result of particular conditions in which work is performed and directly related to it. The work is concurrent with the disease; it is a risk factor, but not necessarily a determining one. The disease can affect anyone but may be caused by particular conditions in which the work is performed.

Law no. 8080/90, which created and established the rules of the Brazilian Single Health System (SUS), attributed to the Health Ministry the formulation of an official list of work diseases.

Based on this determination, the Health Ministry issued the Ordinance no. 1.339/1999, listing the work-related diseases. SUS must consider these diseases as a reference of the grievances originated in the workplace, for clinical and epidemiological use, also establishing the possibility of its revision, annually.

Considering that this is a new coronavirus and that we are at the peak of the pandemic, there is still no definition by the Ministry of Health of whether COVID-19 will be included in the list of work-related diseases. In any case, the list of the Ordinance no. 1.339/99 brings several contagious and/or endemic diseases which, depending on the exposure conditions, can be considered work-related and used, by similarity, for the COVID-19 framework in the same category. Among these diseases, we can mention viral hepatitis, dengue, yellow fever, and malaria.

When talking about contagion, we do not refer only to workplace but also to the exposure of the worker going to and coming from work and the equivalent of the infection ‘on the way to work accident’, considered, by legal definition, a work accident, as set for in article 21, item IV, paragraph “d” of Law no. 8213/91, in full force after the revocation of MP no. 905, of 2019.

The risks and uncertainties affect all employers, from small companies to large organizations. In an attempt to minimize future consequences, Provisional Measure (MP) no. 927/20, which establishes labor-related measures, sets in its article 29 that cases of contamination by coronavirus would not be considered occupational, except upon proof of a causal connection.

MP no. 927/20 attributed to the employee the burden of proving that the COVID-19 contamination occurred in the workplace, due to the employer’s fault. However, in a decision rendered on April 29, 2020, the Federal Supreme Court, when judging precautionary measures filed in seven Direct Unconstitutionality Actions, suspended the effects of article 29 of Provisional Measure no. 927/20. It also suspended article 31, which limited the assessment of labor inspectors to the guidance during the public calamity.

Federal Supreme Court granted the decision under its thesis, which established the criteria for concluding that the employer is objectively liable for damages to the employee. The constitutionality of this liability was declared in full session on March 12, 2020, with general repercussion status. The thesis defined was the following: ‘Article 927, sole paragraph, of the Civil Code, is compatible with article 7, item 28 of the Federal Constitution, being constitutional the objective liability of the employer for damages resulting from work accidents in the cases specified by law or when the activity usually developed, by its nature, presents repeated exposure to a particular risk, with potential damaging and implying to the worker a  more significant burden than the other members of the community‘.

Given the line adopted by the Supreme Court, the contagion from the new coronavirus and its consequences to workers who have not had their activities suspended may be considered an illness equivalent to work sickness, with the employer being liable for the resulting damages.

For a better understanding, it is appropriate to clarify the difference between the employer’s subjective and objective liability.

Subjective liability depends on proof of intent or fault by the agent. For example, in the case of the new coronavirus, such liability is attributed to the employer who has adopted all possible safety measures to prevent contagion but has kept employees from the risk group, such as diabetics, for not consulting the medical service about possible [co]morbidities of their employees, who are suffering from the contagion and even die.

On the other hand, the objective liability does not result from the fault of the agent and, as declared by the Supreme Court, is characterized when the activity customarily carried out, by its nature, exposes the worker to higher risk than the other members of the community. In the case of the pandemic by the new coronavirus, the best example is health professionals.

Regardless of the activity developed by the company, in times of pandemic and severe exposure to contagion by simple circulation on the streets and the work environment, employers need to redouble their care and safety measures to avoid the illness of teams and the risks of probable compensation actions.

Workers with chronic diseases such as diabetes, hypertension, cardiovascular deficiency, renal deficiency, asthma, and individuals over 60 years of age are the most likely to have complications and die of COVID-19, integrating the so-called risk group of the new coronavirus.

For these employees, safety measures and restrictions should be stricter.

Ordinance no. 454/20 of the Health Ministry declared the state of community transmission of the coronavirus throughout the country. In article 4, it establishes that people over 60 years must observe the social distance, restrict their travel to strictly necessary activities, avoiding group transportation, trips and sport, artistic, cultural, scientific, commercial, religious, and other events with a concentration of people.

Given these rules, the employer must adopt measures that provide collaborators over 60 years with the conditions to render their services in safety, social distancing, and displacement restriction, since the health complications of these people by COVID-19 are uncontrollable, unpredictable and independent of the measures adopted by the employer in the work environment.

The same can be said for all other individuals considered as risk groups, and the decision to keep these employees in the workplace attracts the responsibility of the employer for exposing these employees to the risk of contagion and its consequences.

At this time of public calamity, when the Supreme Court maintains the obligation of governmental supervision of companies, the MPT invokes the task of guiding and supervising the work environment, the personal conditions of employees, and the flexibilization of labor rules for maintaining employment.

To regulate and facilitate the orientation and inspection of companies, the MPT issued several Technical Notes and Recommendations. Although the companies’ adoption is not mandatory, they suggest relevant alternatives, besides pointing out how that body will act in its inspection functions concerning issues related to the pandemic. Based on the Technical Notes guidelines, the MPT will analyze the complaints and inspection reports to establish News of Fact and Civil Inquiries.

Below is a summary of the Technical Notes and Recommendations, which can be consulted through the links provided.

Technical Note no. 01/2020 – MPT work: [a] monitoring the actions carried out by the Health Surveillance, at all levels; [b] encouragement to the Operational Support Centers specialized in health, to contact the sanitary authorities, with the purpose of monitoring and becoming aware of the containment plans; [c] encouragement to the MPT enforcement agencies to approach the local health managers; and [d] systematic monitoring of the measures of the Public Health Emergency Operations Center for COVID-19.

Technical Note no. 02/2020 defines activities of risk of exposure to the virus, adopting the criteria of Occupational Safety and Health – OSHA for classification of degrees of risk to exposure, considering the functions performed by workers, thus understood:

        1. very high risk of exposure: those with high potential of contact, with confirmed or suspected cases of COVID-19 during medical, laboratory or post-mortem procedures, including doctors, nurses, dentists, paramedics, nursing technicians, professionals who perform tests, collect sample, or perform an autopsy;
        2. high risk of exposure: professionals who come into contact with confirmed or suspected cases of COVID-19, such as health providers and support professionals who enter the rooms or environments where confirmed or suspected patients are or have been, professionals who transport patients, such as those who work in ambulances, and professionals who work in preparing bodies for cremation or burial;
        3. medium risk of exposure: professionals who demand close contact (less than 2 meters) with people who may be infected with the new coronavirus, but who are not considered suspect or confirmed cases; who have contact with travelers who may have returned from areas of disease transmission, in areas without community transmission; who have to contact with the general public (schools, high concentration of people environments, big stores); who work in areas of community transmission; and
        4. low risk of exposure: those who do not require contact with suspected cases, recognized or that could take the virus, who have no contact [less than 2 meters] with the public; professionals with minimal contact with the general public and other workers.

The MPT concludes, in this Technical Note, that the type of transmission of cases in each location, such as where community transmission already occurs, will imply an increased risk for groups of workers. From this context, the MPT, by Technical Note no. 02/20, established the measures to be adopted by all its members.

Technical Note no. 03/2020 – the text, from March 17, before MP 927/20, sets out guidelines to ensure equal opportunities and treatment at work for female and male workers, recommending flexible working hours with no reduction in wages, providing them to attend sick family members or those vulnerable to infection by COVID-19.

Technical Note nº 04/2020 – the Note provides guidelines for the protection of male and female domestic workers. Among the recommendations are the supply of gloves, masks, and protection glasses to professionals when it is not possible to dispense their attendance.

Technical Note nº 05/2020 – the text brings recommendations for the protection of the workers’ health, employees, trainees, and teenage interns.

Technical Note nº 06/2020 – the objective is to promote social dialogue, collective negotiation, and protection of employment and occupation, given the socio-economic context resulting from the COVID-19 pandemic.

Recommendation no. 1 – MPT recommend that companies accept self-declaration of workers with symptoms of COVID-19 as a justification for the absence from the workplace.

Technical Note CONAFRET nº 01/2020 – Orientation of MPT’s action in the face of government measures to contain the pandemic, destined to freight and passenger transportation companies, through digital platforms.

Recommendation Black Gold Operation – recommends that oil and gas service providers/operating companies adopt preventive and guarantee measures of workers’ rights and operations safety, due to the coronavirus pandemic.

Recommendation to ANTAQ – Recommendation to the National Agency of Water Transportation require the companies in the sector to adopt a plan to combat the dissemination of the new coronavirus.

At a time of so many uncertainties and economic difficulties, awareness of the risks and the adoption of measures to contain the transmissibility of COVID-19 are essential to protect the company from losses with future demands. Therefore, it is recommended to know and adopt the measures proposed by MPT.

The liability of the company for the contagion of its employees has patrimonial nature, which translates into the payment of compensation. However, depending on the situation caused by the employer, its legal representatives may be held criminally liable, according to article 268 of the Criminal Code, which provides that:

‘Art. 268 CP. To infringe the determination of the public authority, destined to prevent the introduction or propagation of contagious disease. Penalty – detention, from one month to one year, and fine’.

For example, considering the Health Ministry determination that people over 60 years should observe the social distance, restrict movements and avoid public transportation, if the employer forces its sexagenarian employees to continue working in the company facilities, their legal representatives can be framed in this legal provision and respond criminally.

In conclusion, even for companies whose activities are legally considered essential, the employer must adopt all possible and necessary measures to ensure the workers’ safety and health, the adaptation of the activities of groups at risk to teleworking and the use of the ways to make work contracts more flexible, as provided for and authorized in Provisional Measures no. 927/20 and no. 936/20.

The employer who determines the maintenance or return to work, during a pandemic and state of public calamity, without observing the safety rules and the normative acts of prevention and containment of the disease, assumes the risk of being held responsible for moral and material damages, as well as their representatives will become criminally liable for the spread of contagious disease.

The professional teams of Fraga, Bekierman & Cristiano Advogados are at your disposal to help with the requested legal clarifications.

Law no. 13,982/2020 provides on the Emergency Aid and other measures in its article 5, and establishes that the company can deduct, from the social security contributions, the amount corresponding to the first fifteen wage days of the employee whose temporary incapacity to work is provenly related to the new coronavirus (COVID-19), observing the maximum contribution wage to the RGPS.

Therefore, two points must be taken into account. The first is that only the absence from work due to COVID-19 authorizes the transfer of the first fifteen days to the Brazilian Social Security (INSS). Another one is that, regardless of the amount of the wage-related to these first fifteen days, the law limits the offsetting right to the maximum wage contribution, which currently is BRL 6,101.06 (six thousand, one hundred and one Brazilian reais and six cents).

Thus, if the amount corresponding to fifteen-day wages is higher than the legal limit, the company must pay the full amount and may deduct the maximum amount authorized, BRL 6,101.06 (six thousand, one hundred and one Brazilian reais and six cents), from the transfer to INSS.

In this context, according to the Guidance Note no. 21/20, of the e-Social Management Group, to immediately benefit from this right, the company shall carry out the following procedures:

        1. to register the amount related to the first fifteen days of leave in the usual record; and
        2. additionally, in case of work leave due to COVID-19, it must create a new informative record using the social security contribution code 51 (the same as the family wage), and the nature of record 9933 (the same as the sickness aid), informing the amount of the register (fifteen first days of absence due to COVID-19) up to the maximum contribution wage.

Following the above, the company will not be subject to taxation, and the value of this record will be sent to DCTFWeb for the deduction, together with the amounts related to the family wage, when applicable. The Brazilian Federal Revenue responsible for the distinction of the benefits out of the register’s code.

To receive the first fifteen days of sickness aid paid by the company, the employee must present a medical statement in the sense that his or her absence is due to contamination by COVID-19.

The Public Ministry of Labor, through Recommendation no. 1 of the COVID-19 Working Group, recommends that companies also accept self-declarations from their workers that have symptoms of COVID-19. According to the Ministry, the statement should be presented in writing and sent by e-mail, digital message, or any other means.

According to the text of the Recommendation no. 1 of the COVID-19 Working Group, the pandemic has caused overcrowding in the health services, which prioritize the care of the most severe cases, and cannot offer a quick response to workers who present symptoms of the disease. Therefore, according to the text, most of the workers will not be able to obtain the medical statements to submit to the employer.

If the work leave is superior to fifteen days, the employee must request the sickness aid via the communication channels with the INSS, and then must follow the Social Security requirements regarding the evidence of the contamination by COVID-19.

The employee must prove to the company the request for sickness aid and the INSS’s decision, since his/her work absence for more than fifteen days, without the due confirmation of the sickness aid application, will be considered an unjustified absence.

The professional teams of Fraga, Bekierman & Cristiano Advogados are at your disposal to help with the requested legal clarifications.

OBJECTIVE OF THE PROGRAM

    • Preserve employment and income;
    • Guarantee the continuity of work and business activities, given the decrease in economic activities; and
    • Reduce social impacts due to the consequences of the state of public calamity and public health emergency.

2. PROGRAM MEASURES

    • Payment of the Emergency Employment and Income Preservation Benefit;
    • Proportional reduction of working hours and wages; and
    • Temporary suspension of the employment contract.

3. IMPLEMENTATION OF THE MEASURES

    • The Ministry of Economy will be in charge of coordinating, executing, monitoring, and evaluating the Emergency Employment and Income Maintenance Program and editing complementary rules necessary for its execution.
    • The Ministry of Economy will regulate the form of transmission of information and communications by the employer about the measures adopted by the company, based on the Emergency Program and the way of granting and paying the Emergency Benefit.

4. EMERGENTIAL BENEFIT OF PRESERVING EMPLOYMENT AND INCOME – ARTICLE 5 of MP nº 936/20

The Emergency Employment and Income Preservation Benefit, paid for with Federal resources, will be paid in the following cases:

(a) Proportional reduction of working hours and wages;

(b) Temporary suspension of the employment contract.

The Emergency Employment and Income Preservation Benefit will be provided monthly and due from the date of commencement of the reduction in working hours and wages or temporary suspension of the employment contract, subject to the following conditions:

(a) The employer shall inform the Ministry of Economy of the reduction in working hours and wages or the temporary suspension of the employment contract, within ten days, counting from the date of conclusion of the  negotiation;

(b) The payment of the first installment will be made within 30 days, counting from the date of completion of the negotiation, provided that the company informs the negotiation within the ten days mentioned in item (a) above.

(c) The first installment of the Emergency Benefit will be paid within 30 days, counting from the date on which the information was provided;

(d) If the employer does not provide the information within ten days, it will suffer the following penalties:

(i) It will be necessary to pay, even with the reduction of the working hours or suspension of the contract, the full amount of the remuneration perceived by the employee before the implementation of the reduction of the workday and the salary or the suspension of the employment agreement, including social charges; and

(ii) The obligation to pay the remuneration and expenses in full will only cease when the employer provides the reduction or suspension information to the Ministry of Economy.

It is up to the employer to provide the correct information to the Ministry of Economy, provided that Emergency Benefits paid improperly or in excess will be registered in the Federal Union’s existing debt, in which case the Law of Tax Foreclosures will be applied for judicial execution.

The receipt of the Emergency Benefit does not prevent the concession or change the amount of unemployment insurance to which the employee may be entitled in the future, due to eventual dismissal, subject to the requirements of Law No. 7.998/90 (Unemployment Insurance Law).

5. EMERGENCY EMPLOYMENT AND INCOME BENEFIT VALUE

The amount of the Emergency Benefit will be based on the monthly unemployment insurance amount to which the employee would be entitled, under the terms of the Unemployment Insurance Law, subject to the criteria and requirements provided for in articles 7 and 8 of Provisional Measure 936 / 20.

VALUES OF UNEMPLOYMENT INSURANCE IN 2020:

Average Salary Ranges Installment Value
Up to R $ 1,599.61 The average salary is multiplied by 0.80 (80%)
From R $ 1,599.62 to R $ 2,666.29 What exceeds R$ 1,599.61 multiplies by 0.5 (50%) and adds up to R$ 1,279.69
Above R $ 2,666.29 The installment will be R$ 1,813.03 invariably

 

The Emergency Benefit will be paid to the employee independently:

(a) the fulfillment of any acquisition period;

(b) the duration of the employment agreement; and

(c) the number of wages received.

The Emergency Benefit will not be paid to the employee re:

(a) receiving any benefits from the General Social Security Regime, except for the pension for death or accident allowance;

(b) receiving unemployment insurance, in any of its modalities; and

(c) receiving a professional qualification scholarship.

The employee with an intermittent employment agreement formalized until the date of publication of Provisional Measure No. 936/20 will be entitled to the Emergency Benefit in the amount of R $ 600.00 (six hundred reais), for 3 (three) months. The monthly benefit will be due from the publication of Provisional Measure No. 936/20 and will be paid within 30 (thirty) days.

An employee who has more than one intermittent employment agreement will be entitled to only one Emergency Benefit of R $ 600.00 (six hundred reais).

The employee with more than one formal employment relationship may receive the Emergency Benefit for each employment relationship with reduced working hours and salary or suspension of the employment agreement.

6. PROPORTIONAL REDUCTION IN WORKING DAYS AND SALARY

According to Article 7 of Provisional Measure No. 936/20, during the state of public calamity, the employer may agree to a proportional reduction in working hours and wages, subject to the following conditions:

(a) preservation of hourly wages;

(b) the maximum term of 90 days;

(c) agreed by an individual or collective written agreement;

(d) the individual agreement will be written, and the employer’s proposal must be sent to the employee at least two calendar days before the start of the application of the reduction; and

(e) guarantee of employment during the period of the reduction and, after the re-establishment, for a period equivalent to such reduction.

Employees who enter into working hours and wage reduction agreements with their employers or who are covered by a collective workforce and wage reduction agreement, signed between the employer and the local union, will be entitled to the emergency benefit.

The reduction in working hours and wages may be applied exclusively in the following percentages: 25%, 50%, or 70%.

The re-establishment of the working day and the salary previously paid will be reestablished in 2 calendar days, counted:

(a) the cessation of the state of public calamity; or

(b) from the date established in the individual agreement as to the end of the period for the reduction of hours and wages.

Provisional Measure No. 936/20 establishes that the reduction in working hours and wages may be applied for a maximum period of 90 days during the period that the state of public calamity lasts. The state of public calamity was decreed by Legislative Decree No. 6/20, valid until 12.31.2020. The employer will be able to decide the best time to reduce the workday and the salary, since the 90 days provided for in the Provisional Measure elapse within the period of the state of public calamity.

The employer will be able to anticipate the end of the agreed reduction period and will have to inform the employee about his decision two calendar days in advance.

Provisional Measure No. 936/20 establishes the cases in which the reduction in working hours and wages may be implemented through an individual agreement and those cases in which collective bargaining is required. The table below summarizes the rules of the Provisional Measure regarding the reduction of hours and wages allowed and the requirements for formalizing an individual or collective bargaining.

Reduction Emergency Benefit Amount Individual Agreement Collective Bargaining
25% 25% of unemployment insurance All employees All employees
50% 50% of unemployment insurance Employees receiving up to three minimum wages (R $ 3,135) or more than two ceilings from the RGPS (R $ 12,202.12) All employees
70% 70% of unemployment insurance Employees receiving up to three minimum wages (R $ 3,135) or more than two ceilings from the RGPS (R $ 12,202.12) All employees

 

In short:

(a) 25% reduction: individual agreement with any employee;

(b) Reduction of 50% or 70%: individual agreement with employees who receive up to 3 minimum wages or more than R$ 12,202.12;

(c) Reduction of 50% or 70%: collective bargaining for employees who receive more than three minimum wages and less than R$ 12,202.12 or who earn more than R$ 12,202.12 and do not have a higher education degree.

7. TEMPORARY SUSPENSION OF THE WORK CONTRACT

During the state of public calamity, the employer may agree to temporarily suspend the employment contract with its employees, for a maximum period of 60 days, which may be divided into up to two periods of 30 days.

The temporary suspension of the employment contract can be agreed upon by individual written agreement between employer and employee. It must be forwarded to the employee at least two days before the suspension begins.

During the period of temporary suspension, the employee will be entitled to all benefits granted by the employer. Provisional Measure No. 926/20 does not exclude any benefit, be it legal, conventional, or given freely by the employer.

No benefit is strictly excluded, not even the transportation voucher. However, this is a benefit for which the employer anticipates the amount spent on transportation so that the worker moves from his residence to the workplace and vice versa, and its concession would not be justified during the contract suspension period.

During the period of temporary suspension of the employment contract, the employer will not contribute to the General Social Security System, and the employee may pay social security contributions as an optional insured.

The employment contract will be reestablished within two calendar days, counting:

(a) The cessation of the state of public calamity, as defined by Legislative Decree No. 6/20, with a term of validity up to 12.31.2020; or

(b) the date established in the individual agreement as to the end of the suspension period (maximum of 60 days); or yet,

(c) The date of the employer’s communication, informing the employee of his decision to bring the agreed suspension period to an end.

If, during the contract suspension period, the employee maintains work activities, even if partially, through teleworking, remote or remote work, the suspension will be uncharacterized, and the employer will be subject to:

(a) the immediate payment of remuneration and social charges for the entire period;

(b) the penalties provided for in the legislation in force, for non-compliance with the rules provided for in the Provisional Measure; and

(c) sanctions provided for in collective bargaining or collective convention.

The company that earned, in the calendar year of 2019, gross revenue exceeding R$ 4,800,000.00 (four million and eight hundred thousand reais) can only suspend the employment contract of its employees by paying monthly compensatory aid equivalent to 30% of the employee’s salary, during the period of temporary suspension from work.

The compensatory aid will comply with the following criteria:

(a) It should be provided for in the individual or collective bargaining;

(b) It will have an indemnity nature;

(c) It will not be included in the calculation basis of the income tax withheld at source or the annual income tax adjustment statement for the employer’s income;

(d) It will not be included in the calculation base of the social security contribution, and other taxes levied on the payroll;

(e) It will not be included in the calculation base of the amount due to the FGTS; and

(f) May be excluded from net income to determine corporate income tax and social contribution on corporate net income taxed by taxable income.

 

Company’s Annual Gross Revenue Monthly Compensatory Aid Paid by the Employer Emergency Benefit Amount Individual Agreement Collective Bargaining
Up to R $ 4.8 million Not mandatory 100% unemployment insurance Employees receiving up to three minimum wages (R $ 3,135) or more than two ceilings from the RGPS (R $ 12,202.12) All employees
More than R $ 4.8 million Mandatory 30% of the employee’s salary 70% of unemployment insurance Employees receiving up to three minimum wages (R $ 3,135) or more than two ceilings from the RGPS (R $ 12,202.12) All employees

 

8. COMPENSATORY AID – REDUCTION IN DAY AND WAGE AND SUSPENSION OF THE WORK CONTRACT – ARTICLE 9 OF PROVISIONAL MEASURE No. 936/20

The Emergency Benefit may be accumulated with the payment of monthly compensatory aid by the employer as a result of the reduction in working hours and wages or the temporary suspension of the employment contract.

The compensatory aid for the temporary suspension is only payable by companies with annual gross revenue above R$ 4,800,000.00 (four million and eight hundred thousand reais), in a minimum percentage of 30% of the salary. Companies with annual gross income below this ceiling or any company that signs working hours and wage reduction agreement may also grant monthly compensatory aid. In such cases, the monthly compensatory support must observe the following rules:

(a) Have a value defined in the individual agreement agreed or in collective bargaining;

(b) It will have an indemnity nature;

(c) It will not be included in the calculation base of the social security contribution, and other taxes levied on the payroll;

(d) It will not be included in the basis for calculating the amount due to the FGTS;

(e) May be excluded from net income to determine corporate income tax and Social Contribution on Net Income of corporate entities taxed by taxable income; and

(f) In the case of reduced working hours and wages, compensatory aid will not be included in the salary due by the employer.

9. PROVISIONAL GUARANTEE IN EMPLOYMENT

Article 10 of Provisional Measure No. 936/20 recognizes the provisional guarantee in employment for the employee who receives Emergency Benefit as a result of the reduction in working hours and salary or the temporary suspension of the employment contract, in the following terms:

(a) During the period that the workload and wage reduction lasts;

(b) During the period of temporary suspension of the employment contract;

(c) After the re-establishment of the working day and the salary or the end of the temporary suspension of the agreement, for a period equivalent to that agreed for the reduction or suspension (for example, 60 days of suspension of employment agreement – 120 days job guarantee).

If the employee is dismissed without cause during the period of provisional guarantee in employment, in addition to the severance payments provided for in the legislation in force, the following indemnities will be due:

(a) 50% of the salary to which the employee would be entitled in the period of provisional guarantee in employment, in the event of a reduction in the working day and a salary equal to or greater than 25% and less than 50%;

(b) 75% of the salary to which the employee would be entitled in the period of provisional guarantee in employment, there is a hypothesis of a reduction in working hours and a salary equal to or greater than 50% and less than 70%;

(c) 100% of the salary to which the employee would be entitled in the period of provisional guarantee in employment, in the hypotheses of reduction of the working day and salary in a percentage higher than 70% or temporary suspension of the employment contract.

Employees who resign or are dismissed for just cause are not entitled to the payment of the indemnities listed in item 9.2.

10. COLLECTIVE BARGAINING AND COLLECTIVE CONVENTION

Measures to reduce hours and wages or suspend the employment contract referred to in Provisional Measure No. 936/20 may be entered into through collective bargaining.

The collective bargaining agreement or collective convention may establish percentages of reduced working hours and wages different from that established in Provisional Measure No. 936/20. Depending on the reduction percentage adjusted in a collective rule, the emergency benefit will not be due or will be reduced, in the following terms:

(a) No perception of the emergency benefit for working hours and wages lower than 25%;

(b) 25% on the calculation basis provided for in article 6, for a reduction in work hours and salaries equal to or greater than 25% and less than 50%;

(c) 50% on the calculation basis provided for in Article 6, for a reduction in working hours and wages equal to or greater than 50% and less than 70%; and

(d) 70% on the calculation basis provided for in Article 6, for the reduction of hours and wages above 70%.

Collective labor agreements or agreements previously entered into can be renegotiated to adapt their terms, within ten calendar days, counted from the date of publication of Provisional Measure No. 936/20.

Individual agreements for the reduction of working hours and wages or temporary suspension of the contract must be communicated by the employers to the respective local union of the employee category, within up to 10 calendar days, counted from the date of its execution.

11. OTHER PROVISIONS

(a) The reduction in working hours and wages or the suspension of the employment contract cannot affect the exercise and functioning of public services and essential activities provided for in Law No. 7,783 / 89 and Law No. 13,979 / 20.

(b) Irregularities found by labor inspection will subject violators to legal fines.

(c) The provisions of Provisional Measure No. 936/20 apply to apprentice and part-time employment contracts.

(d) During the state of public calamity, the courses or professional qualification program referred to in article 476-A of the CLT may be offered by the employer exclusively in the face-to-face modality. It will last no less than one month and not more than three months.

(e) Electronic means may be used to meet the formal requirements provided for in Title VI of the CLT – collective bargaining – including for calling, deliberating, deciding, formalizing and advertising a convention or collective bargaining agreement, and the deadlines provided for in that Title are halved.

The House of Representatives will vote today (06.16.2020) the Provisional Measure 927, of March 22, 2020, that provides for alternative measures that may be adopted by employers to preserve employment and income during the state of public calamity resulting from COVID-19, recognized by the Federal Senate in Legislative Decree No. 06/2020, with effect until 12.31.2020.

The final text of MP 927/2020 after the vote will refer to the Federal Senate for evaluation. For now, by an act of the President of the National Congress, the MP 927/2020 has been extended until the beginning of July, with the following measures maintained:

1. Teleworking. Sections 75-A to 75-E of the Brazilian Labour Laws Consolidation (“CLT”) regulates teleworking, but, as long as the state of public calamity declared in Legislative Decree 06/2020 continues, with effects expected until 12.31.2020, MP 927/2020 predicted that the rules for this modality would be as follows:

a) Amendment to the employment contract – exception. The alteration of the face-to-face work regime to that of telecommuting, remote work or another type of distance work, as well as the return to the face-to-face work regime, will be at the sole discretion of the employer, without the need for individual or collective agreement and registration before the change in the individual employment contract;

b) Definition of teleworking to apply the rules of MP 927/2020. It is remote work or distance work in the provision of services that are predominant or totally outside the employer’s premises, with the use of information and communication technologies that, by their nature, do not constitute external work;

c) Deadline for communicating to the employee the change in the work regime. Communication must occur at least 48 hours in advance, in writing or electronically;

d) Provisions on the acquisition of equipment and reimbursement of expenses. Responsibility for the purchase, maintenance or supply of technological equipment and infrastructure for the provision of teleworking, remote or distance work, and the rules for reimbursement of expenses must be established in, signed before a change of work regime begins, or within a maximum period of 30 days from the date of the change;

e) If the employee does not have the necessary equipment or infrastructure to provide teleworking, remote, or remote work:

i) the employer may supply the equipment on a lending basis and pay for infrastructure services, in the case of teleworking or remote work. Everything must be established in writing, with the observation that the resulting expenses are not part of the salary;

ii) if the employer cannot supply the equipment and if the teleworking regime is maintained, the standard working day period will be counted as working time available to the employer;

iii) distance work is also equivalent to homework, without necessarily using technological equipment, such as, for example, the production of clothes by sewists. In this case, too, if the employee does not have the appropriate equipment, this must be provided by the employer.

f) Workday. Regular working hours will be considered, with no provision for overtime work in this modality. The available time, readiness or alert system will only be valid if provided for in an individual or collective agreement; and

g) Interns and Apprentices. Interns and apprentices will also be able to work in teleworking, remote, or distance work.

2. Anticipation of Individual Vacations. The granting of individual vacations are provided for in Sections 129 to 138 of the CLT. During the period that the state of public calamity endures, these rules were relaxed by MP 927/2020, in the following points:

a) Notice. When deciding to grant individual vacations, the employer will inform the employee about the anticipation of his/her vacation, in a minimum period of 48 hours, in writing or by electronic means, indicating the period to be taken by the employee.

b) Minimum period. Vacations may not be taken in periods of less than five calendar days.

c) Acquisition Period. They may be granted, by decision of the employer, even if the corresponding acquisition period has not elapsed. Also, an employee and an employer may enter into an individual written agreement to anticipate the granting of vacation periods in the future.

d) Vacation Payment. Payment of vacation pay during the state of public calamity may be made up to the fifth business day of the month following the start of the vacation. For example, vacation granted in April / 2020 may be paid by the fifth business day of May / 2020.

e) Additional Vacation Payment. The employer may choose to pay the 1/3 vacation additional after it is granted, until the deadline of December 20, together with the payment of the 13th salary. It is up to the employer to decide whether or not he can pay the employee’s request to convert the 1/3 vacation additional as a cash bonus. The employee within 48 hours must make this request after being notified of the vacation grant.

f) Risk Group. Workers belonging to the coronavirus risk group (elderly over 60 years old and diabetics, patients with chronic respiratory diseases such as asthma and bronchitis, cardiovascular diseases, patients with kidney failure, of any age) should be prioritized for the vacation, individual or collective.

g) Healthcare Professionals. Vacation Suspension. During the state of public calamity, the employer may suspend the vacation of health professionals or those who perform essential functions, by formally communicating the decision to the worker, in writing, or by electronic means, preferably, 48 hours in advance.

3. Collective Vacations. Collective vacations, which are provided for in Section 139 to 141 of the CLT, have as main requirement the prior communication to the local body of the Ministry of Economy and Employment and the local union. MP 927/2020 made this rule and other flexibles, as follows:

a) Notice. The employer may, at its discretion, grant collective vacations, notifying the group of employees affected, at least 48 hours in advance. Also, companies are exempted, during the state of public calamity, from making the prior notification of collective vacations to the local agency of the Ministry of Economy and Employment and the local union.

b) Limit. During the state of public calamity, the employer does not need to comply with the requirement of only two annual collective vacation periods, nor the minimum number of 10 consecutive days provided for in the CLT;

c) Other Applicable Rules. The same rules applicable to individual vacation apply to collective vacations in terms of acquisition periods, payment dates, and payment dates of the additional 1/3.

4. Anticipating Holidays. The MP also established new rules for anticipating and offsetting holidays.

a) Notice. Employers may decide to anticipate the use of non-religious holidays, notifying the set of benefited employees in writing or electronically, at least 48 hours in advance, expressly listing the holidays that will be used and that can offset the balance in the bank hours;

b) Religious and Non-Religious Holidays. The use of religious holidays will depend on the employee’s agreement, upon manifestation in an individual written agreement. Companies should be aware that employers can anticipate only non-religious holidays. Religious holidays must be the object of a written contract with employees.

5. Bank of Hours. The rules of the bank of hours established in Section 59, §2nd of the CLT were made more flexible by MP 927/2020. The MP authorizes, for the duration of the state of public calamity, the interruption of activities by the employer and the special workday compensation regime, through the Bank of Hours, instituted by collective agreement between the company and the local union or by formal individual agreement.

a) Limits. The Bank of Hours agreement may establish the compensation for the days of interruption of activities, by extending the workday by up to 2 hours, not exceeding the workday of 10 hours daily, within a period of up to eighteen months, counting from the closing date of the state of public calamity. This compensation will be established by the company, without the need for a collective agreement.

b) Interruption of the Employment Contract. The termination of the employment contract occurs when the employee stops providing services, as determined by the employer, and continues to receive wages and benefits.

c) Compensation. The compensation for the interrupted period, the number of days of interruption, will be at the discretion of the employer, and the payment for early vacations is the object of the Bank of Hours provided for in MP 927/2020. If the company maintains its normal internal activities, the Bank of Hours rules established in a collective agreement or collective agreement will remain in effect.

6. Safety and Health at Work. The following rules have been established:

a) Occupational Medical Examinations. During the state of public calamity, occupational medical examinations are suspended, except for the dismissal medical examination.

b) Medical Examinations in case of Dismissal. Regardless of the date of termination of the employment contract, the dismissal examination may be carried out within 60 days, counting from the closing date of the state of public calamity. It is up to the company to keep the contacts of the disconnected employee up to date, making it possible for him to call for the dismissal exam.

The dismissal examination may be waived if the most recent occupational medical examination was carried out less than 180 days ago.

The postponement or dismissal of the dismissal exam can only occur if the doctor responsible for controlling the occupational health of the company considers that there is a risk for the worker.

It is also recommended that, if possible, the company carries out the dismissal exam as soon as possible to avoid future discussions regarding allegations of occupational illnesses and worsening illnesses. For example, if the employee is dismissed in May/2020, the company will only have the legal obligation to take the exam in January/February 2021. Until then, this former employee may have an accident or have a health problem, and the absence of a dismissal exam may make it difficult to prove the company’s lack of responsibility for possible sequelae or aggravation of illnesses.

c) Training. The periodic and eventual training of employees provided for in occupational health and safety standards will have their mandatory suspension. It must be carried out within 90 days, counting from the date of the closure of the state of public calamity.

d) CIPAS. The CIPAS may be maintained during the State of Public Calamity period, and the mandates may be extended, with the possibility of suspending ongoing electoral processes.

7. Suspension of the Employment Contract and Directing the Worker to Qualification. Article 18 of MP 927/2020, which established the rules for the suspension of the employment contract and the worker’s direction for qualification, was repealed by MP 928/2020.

8. Deferment of FGTS Payments.

MP 927/2020 suspended the enforceability of the FGTS payment by employers concerning the competencies of March, April, and May 2020, due in April, May, and June 2020, respectively, and authorized its installment payment. This suspension is valid for all companies and does not depend on prior formal adhesion, but the employer must declare, by June 20, 2020, the information on the payments that will be paid in installments.

The information provided will constitute a declaration and recognition of credits, characterized as a debt confession and an enforceable instrument for the collection of FGTS credit.

The payments will be made in installments, without the need for updating, fines, and charges, in up to 6 (six) monthly installments, starting in July 2020.

Unreported amounts will be considered in arrears, requiring full payment, plus restatement, fines, and charges, and the installments declared falling due will be regarded as immediately collectable.

The ongoing FGTS debt installments, which have payments due in March, April, and May 2020, will not prevent the issuance of a clearance certificate. And the terms of the certificates issued before the date of entry into force of MP 927/2020 will be extended for 90 (ninety) days.

9. Other Labor Provisions of MPF 927/2020.

a) Health establishments. During the period of the state of public calamity, health establishments, by an individual written agreement, even for unhealthy activities and a special 12×36 day, may:

i. for imperative necessity, exceeding the legal limit on the duration of work, to deal with force majeure;
ii. adopt an overtime schedule between the 13th and the 24th hour of the intra-day interval, guaranteeing paid weekly rest, without any administrative penalty;
iii. overtime hours may be compensated, within 18 months, counting from the end of the state of public calamity, through an hour bank or paid as overtime.

b) Suspension of Lawsuit Deadlines. For the period of 180 (one hundred and eighty) days, counted from the date of entry into force of MP 927/2020, the lawsuit deadlines for the presentation of defense and administrative appeals originated from labor infractions, and FGTS debit notifications are suspended.

c) Coronavirus contamination. The cases of contamination by the coronavirus will not be considered occupational illness, except upon proving the causal link. This presumption of exclusion from the employer’s liability is not a guarantee that companies will not be subject to claims alleging illness acquired in the workplace or due to the need for work, such as the use of transportation. For this reason, before implementing the measures contained in MP 927/2020, or any other that the company considers necessary, we suggest assessing the risk of exposure of employees, as well as possible actions to minimize the likelihood of contagion.

d) Overdue Collective Agreements and Conventions. The collective agreements and conventions overdue and about to expire, within 180 (one hundred and eighty) days from the date of entry into force of MP 927/2020, may be extended, at the employer’s discretion, for 90 (ninety) days. It is an appropriate measure, as it will allow companies to wait to pass the crisis generated by the coronavirus to negotiate new collective agreements and conventions.

e) Inspection. Within the same period of 180 (one hundred and eighty) days, counted from the date of entry into force of MP 927/2020, the tax auditors will act only in a pedagogical manner, except to:

i. lack of employee registration, based on complaints;

ii. situations of grave and imminent risk, only for irregularities immediately related to the configuration of the case;

iii. the occurrence of a fatal occupational accident determined through an accident analysis tax procedure, only for irregularities immediately related to the causes of the accident; and

iv. work in conditions similar to slave or child labor.

f) Application of the Rules provided for in MP 927/2020. The rules provided for in MP 927/2020 apply to temporary employment contracts provided for in Law No. 6,019 / 74, to rural workers contracts provided for in Law No. 5,889 / 73 and to domestic workers contracts of Complementary Law No. 150/2015.

10. Measures adopted by companies before Provisional Measure 927/2020.

The final provisions expressly state that the labor measures adopted by employers that do not contravene the provisions of MP 927/2020, taken in 30 (thirty) days before the date of its entry into force, are valid.

However, it is worth clarifying that, although it is not expressly mentioned, this validation only applies to the rules contained in the Provisional Measure. As MP 927/2020 provides for the possibility of adopting other measures not contemplated in its text, decisions taken by the company that violates the constitutional rule or section of the CLT are not subject to the validation provided for in Section 36.

***

Given the countless social and economic repercussions resulting from the pandemic of the new coronavirus (COVID-19), public authorities have recommended preventive measures and imposed restrictions on the entire population. Public and private entities adopted precautionary protocols and reformulated their activities to better adapt to times of crisis.

The first measures planned to deal with the public health emergency resulting from the spread of COVID-19 were set out in Law No. 13.979, of February 6, 2020, among them: isolation and quarantine of people; temporary closure of ports, highways and airports; compulsory laboratory exams and tests and medical treatments; requisition of goods and services, with subsequent compensation; exceptional and temporary authorization to import products without registration with Anvisa; and exemption from bidding for the purchase of health goods, services, and supplies for dealing with calamity.

With the worsening of the crisis, , the Brazilian Senate recognized the state of public calamity (Legislative Decree No. 6, 2020), with effects until December 31st, 2020. In the same direction, the Governments of mainly all the States, as well as the respective Governments of the biggest Municipalities, declared a situation of public emergency, to implement measures to face the pandemic. General restrictions on the movement of people were imposed, with the suspension of classes in public and private schools and universities, closure or teleworking regime in public agencies, reduction in the operation of public transport, and closure of commercial establishments. Offending agents are subject to civil, administrative and criminal liability, as regulated by the Ministries of Justice and Public Security and Health.

Aware of the repercussions caused by such an emergency, the teams from Fraga, Bekierman & Cristiano Advogados prepared this report with a summary of the main normative acts related to COVID-19 and their impacts on business continuity.

Tax and Customs Aspects
For more detailed information about tax aspects, please access our Newsletter about the main tax measures to mitigate the impacts of Covid-19 clicking here.
Labor Aspects
For detailed information about labor aspects, please click here.
Contractual Aspects
Check out the material that our team has prepared regarding the contractual alternatives in the context of the pandemic by clicking here.
Other Legal and Economic Aspects
Here are the main measures proposed by the authorities so far.
Public Bodies Functioning and Terms
Except for the health area, all public agencies have adjusted their functioning to deal with the emergency scenario of COVID-19.

 

Our offices in Rio de Janeiro and São Paulo are available to answer any questions about the measures described above.

The partner Luiz Carlos Fraga was recognized as a leading private practitioner in Labor Law and in the Health sector by Análise Advocacia 500, an important Brazilian directory that identifies and points out the country’s most admired lawyers and law firms.

For more information, access: http://www.analise.com/site/maisadmirados

Fraga, Bekierman & Cristiano Advogados was recognized in Tax, Corporate, Contracts, and Labor Law by Análise Advocacia 500, an important Brazilian directory that identifies and points out the country’s most admired lawyers and law firms.

For more information, access: http://www.analise.com/site/maisadmirados

Fraga, Bekierman & Cristiano Advogados was recognized as a Recommended Firm in Labor Litigation by the Leaders League, an international media and rating agency for top executives at the international level.

For more information, access: https://www.leadersleague.com/en/rankings

The Brazilian Supreme Court (STF) decided that “the outsourcing or any other form of labor division between distinct legal entities is lawful, regardless the corporate purpose of the companies involved, and kept the subsidiary liability of the hiring company” (Theme n# 725)

The understanding was settled at the combined judgment of the Allegation of Breach of Fundamental Precept (ADPF) n# 324/DF and the Extraordinary Appeal n# 958.252/MG (with general repercussion), ended in 08.20.2018.

At the trial, the Supreme Court Ministers agreed that the outsourcing is possible regardless of the activities developed by companies and declared unconstitutional the understanding at the Precedent n# 331 of Superior Labour Court (TST), that considered as lawful only the outsourcing of the so-called ancillary activities, that means, those not directly linked to the main object of the hiring company, such as security services hired by bank agencies and cleaning services hired by shopping centers for example, among others.

By a majority of votes (7×4), it has prevailed the understanding that the Federal Constitution does not prohibit the outsourcing of activities, whether they are main or ancillary activities. The Ministers understood that the outsourcing is supported by the constitutional principles of free enterprise and free competition, which guarantee that the economic agents are free to formulate business strategies to induce higher economic efficiency and competitiveness.

The STF highlighted that the hiring company shall verify the reputation and the economic capability of the hired company (the outsourcing), both for the provision of services and compliance with social security and labor obligations since, in case of breach of such obligations, the hiring company will have subsidiary liability, after regular judicial process.

The understanding of the Supreme Court also applies to contracts executed before Law n# 13.467/2017 (Labour Reform), whose article 4 allowed for the large outsourcing, of any activities.

Finally, the STF emphasized that the supply of manpower by a third company (manpower intermediation) is not considered outsourcing, since it results in fraud to the labor relationship with the relevant employer (article 9 of Labour Code) and an insult to labor social value (article 1, IV of the Federal Constitution).

Fraga, Bekierman & Cristiano Advogados teams in Rio de Janeiro and São Paulo are available to clarify any possible doubts.

Our partners Roberto Bekierman, Marcelo Leonardo Cristiano, Luiz Carlos Fraga, and Lycia Braz Moreira, collaborated with the preparation of Doing Business 2018: Reform to Produce Jobs.

For more information, access: Doing Business Site