The approval of the ‘Economic Freedom’ Policy and its impacts in labor relationships
Recently the Brazilian Congress approved the Provisional Measure No. 881 of April 30, 2019 (“MP 881/2019”), which seeks to facilitate and update the business environment by simplifying a series of procedures that companies in general must currently observe in their routines, with the purpose of generating taxes, jobs and innovation.
Some of these changes have an impact on employers’ labor routines and simplify their operation, with the goal of facilitating the hiring of new workers and lowering the unemployment rate, which remains high, despite the legal innovations brought by the 2017 Brazilian Labor Reform.
In addition to specific rules applicable to economic and trade relations, the MP 881/2019 introduces further updates to the set of labor laws, in addition to the 2017 Brazilian Labor Reform. For now, and as far as labor relations are concerned, the main innovations relate with working hours and new forms to register them.
The MP 881/2019 extends the recognition of the registration of working hours control by exception, which must be formalized through individual agreement with the employee, convention or collective bargaining agreement. The workday control by exception is a kind of control by which the employer controls only the extraordinary working day. In other words, if the employee works with normal hours/days, he will not have to record his work schedule and breaks: only the exceptions will be mentioned on his workday control.
Likewise, said legal diploma innovates because it exempts companies with less than 20 registered employees from the obligation to control working hours. By way of comparison, currently, only companies with less than 10 employees have permission not to control the working hours.
MP 881/2019 also indicates that soon the eSocial system, which concentrates a series of labor and social security routines and obligations, will undergo major changes to make it faster, easier and more intuitive. Such innovations, however, will not excuse employers from using the system after the adjustments are made, which will be timely informed by the Brazilian Federal Government to all users.
Another labor document that will soon be subject to important modifications — should MP 881/2019 be converted into law, after presidential sanction — is the Work and Social Security Card (CTPS) which will once for all become electronic. The employer will need to sign the CTPS within five days from starting date simply by informing the number of Individual Taxpayers Registry (CPF) of the new hire.
It is also worth to note that the current text of MP 881/2019 exempts low risk economic activities from licenses, authorizations and permits prior to the start of their respective operations, according to the criteria to be set by the Brazilian Federal Government.
The MP 881/2019 also proposes the amendment of articles of the Brazilian Civil Code, with the purpose of reinforcing the patrimonial autonomy of legal entities, which could only be disregarded in case fraud against a creditor is proven. In the event of disregard of the legal entity, only the assets of the partner or manager who has committed the fraud or benefited from it will be affected.
Without disregarding the need for presidential sanction, it is already possible to identify that, further to the Executive, the Legislative also seeks to make a possible contribution in order to foster economic activity and generate more jobs.
To achieve this goal — which is still in progress —, it is essential that future rules incorporated into the legal system following the ratification of MP 881/2019 are implemented by employers and reviewed by the Judiciary, in order to ensure that they meet the needs of both companies and workers, which are in principle interested in improving the Brazilian business environment.