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Brazil

Published on Thursday 2nd February 2017

    • Brazil

      The Brazilian Labour Law does not prevent a foreign employer from hiring employees to work in Brazilian territory. However, the foreign entity would need a Brazilian taxpayer number in order to comply with labour and Social Security obligations resulting from such employment relationship, since work performed in Brazil is generally subject to Brazilian Labour Law. In brief, although foreign companies are not prohibited from hiring employees in Brazil, there would be practical obstacles to comply with the Labour Law. In addition, it could trigger corporate and tax exposure.

      A foreign company can hire independent services in Brazil but outsourcing agreements are only lawful for engaging specialised services that are not part of the contracting party’s core business. 

      Last verified on Thursday 9th March 2017

    • Brazil

      Yes. The Brazilian Labour Code (CLT) provides for a one-third–two-thirds  ratio between foreign and national employees, applicable to both payroll and headcount. In other words, a Brazilian company with three or more employees can have a maximum of one-third foreign employees and pay a maximum of one-third of its total payroll to foreign citizens. The following situations allow the foreign citizen to be counted as Brazilian for the purposes above: Portuguese citizens; foreign citizens with authorisation to live in Brazil on a permanent basis, valid for a minimum of 10 years; and foreign citizens with Brazilian children or spouse.

      Last verified on Thursday 9th March 2017

    • Brazil

      As a general rule, an employment relationship is subject to Brazilian Labour Law if the work is performed in Brazilian territory. This general rule is applicable regardless of the employees’ nationality and of the location of admission and signature of the employment agreement. However, we envisage three possible scenarios in which a labour relationship governed by Brazilian Law could also be governed by the labour laws of other jurisdictions:

      • if the employment agreement sets forth benefits and guarantees pursuant to other countries’ legislation, they would apply in addition to the ones established by local law;
      • if the work is performed in Brazil under special authorisation by immigration authorities allowing the employment relationship to be kept abroad (eg, technical support from a foreign company – employer – to a Brazilian customer or partner to transfer technology to Brazil); and
      • temporary transfer of an employee to another country, in which case the applicable law would be of the foreign country for the duration of the transfer although some guarantees established by Brazilian law would also apply.

      Last verified on Thursday 9th March 2017

    • Brazil

      In Brazil, employers and employees are not required to execute written employment agreements. According to the CLT, there is an employment agreement whenever there is an individual who personally works to another individual or entity, on a regular basis, upon payment and subject to direct orders and supervision. As a consequence, the employment conditions can be tacitly arranged. Employment conditions established by a written employment agreement signed by the employee and by the employer are enforceable provided that they are consistent with the CLT, which governs most aspects of an employment relationship in details. Although the employment relationship can be tacit, the employer is required to register it on the employees’ labour card (CTPS). An employment agreement subjects the parties to the applicable labour, social security and tax law. As a consequence, in terms of registration, the employer will also be required to register the main work conditions with the social security system (INSS), to the Ministry of Employment and to the Federal Bank ­handling the Severance Fund (FGTS). There are no fees, duties or taxes resulting from admission of an employee or registration of employment agreement per se. Still, for the sake of clarification, the cost of the employment ­relationship will include salaries, statutory and contractual benefits, contributions to social security and severance provision. In addition, it will create tax obligations (eg, withholding of income taxes).

      Last verified on Thursday 9th March 2017

    • Brazil

      Because Brazilian Labour Law regulates most aspects of an employment relationship in a very detailed manner, in theory the parties would not need an employment agreement. However, it is recommended for an employer to have written instruments to govern certain aspects of the employment relationship because, in the event of litigation, labour courts tend to interpret unclear situations on behalf of the employee, who is considered the weaker party of the agreement.

      Last verified on Thursday 9th March 2017

    • Brazil

      The statutory labour rights include:

      • a national minimum wage of approximately US$300 per month;
      • 30 days of vacation per year;
      • a vacation bonus (one-third of the vacation payment);
      • a 13th salary;
      • Guarantee Severance Fund (FGTS) at 8 per cent of the monthly compensation;
      • a prior notice for termination of minimum 30 days and maximum 90 days, depending on the length of the employment;
      • indemnity for unfair termination equal to 50 per cent of FGTS account balance;
      • overtime payment;
      • enrolment in social security;
      • shared payment of transportation costs; and
      • weekly rest.

      Individual circumstances may also trigger other additional pay (eg, for occupational hazard, unhealthy work conditions and night shifts). In addition, there are also collective labour agreements that are applicable according to the business and location. They are mandatory regardless of union affiliation and valid for up to two years. Employment statutory costs are generally considered to be “operational costs” and therefore subject to income tax deduction, depending on classification by tax law and compliance with the legal conditions applicable.

      Last verified on Thursday 9th March 2017

    • Brazil

      The most important statutory labour benefits include:

      • a national minimum wage of approximately US$280 per month;
      • 30 days of vacation per year (accruing one-twelfth per month and payable on a pro rata basis in case of termination for any cause);
      • a vacation bonus (one-third of the vacation payment);
      • a 13th salary (accruing one-twelfth per month and payable on a pro rata basis in case of termination for any cause);
      • a Guarantee Severance Fund (FGTS) at 8 per cent of the monthly compensation;
      • a prior notice for termination without cause at employer’s initiative of minimum 30 days and maximum 90 days, depending on the length of the employment;
      • indemnity for termination without cause at employer’s initiative equal to 50 per cent of FGTS account balance (10 per cent for the government and 40 per cent to the employee);
      • overtime payment;
      • enrolment in social security;
      • shared payment of transportation costs; and
      • weekly rest.

      Individual circumstances may also trigger other additional pay (eg, for occupational hazard, healthy work conditions, night shifts and day care for children). In addition, there are also collective labour agreements applicable according to the business and location. They are mandatory regardless of union affiliation and valid for up to two years.

      Last verified on Thursday 9th March 2017

    • Brazil

      Unions and employers associations are legitimate representatives of employees and employers (respectively) in negotiations and litigation regardless of nationality. The most important role of unions is to negotiate collective labour agreements or bargaining arrangements with companies established in Brazil or with the employers’ associations representing their business sector. Salary adjustments and other collective work conditions are negotiated on an annual or biannual basis. Foreign employees with agreements governed by the Brazilian Labour Law are also represented by these local unions.

      Last verified on Thursday 9th March 2017

    • Brazil

      Yes. The Brazilian Federal Constitution authorises employees and employers to create unions and employers associations regardless of governmental approval. They are, however, required to register with the Ministry of Employment because there can only be one union per business sector per location. It is the employer’s responsibility to identify the correct union representing its employees. Representation is compulsory and does not depend on affiliation.

      Last verified on Thursday 9th March 2017

    • Brazil

      Unions and employers’ associations cannot be considered independent parties because they are supposed to represent the employees and the business respect­ively. Unions are generally allowed to take legal actions to protect collective and individual interests of the employees they represent. Their ability to negotiate labour rights is, however, very limited because, save for a few exceptions mentioned by the law (eg, offsetting systems to avoid overtime payments, salary adjustment under inflation rates, salary reduction for a limited period of time and special work shifts), they are not authorised to validly waive or suppress labour rights. Still, once they are able to set forth a collective labour agreement or bargaining arrangement for a company or business sector, compliance is mandatory for the duration of the agreement.

      Last verified on Thursday 9th March 2017

    • Brazil

      Unions are generally authorised to cause a stoppage after unsuccessful negotiations with employers, pursuant to the employees’ decision and provided they observe certain legal conditions, including prior notification of 48 or 72 hours, depending on the nature of the business. During the strike, any of the parties as well as the public attorney can file a collective lawsuit for the Labour Court of Appeal to decide on the legal grounds of the stoppage and on the merits of the claims. In practice, before that, labour courts act like mediators seeking an agreement to end the strike. During the strike, the employment agreements are suspended and therefore cannot be terminated. The days not worked cannot be deducted from salary, except if expressly negotiated with the union or if the strike is considered abusive by the labour court. The employer cannot hire substitutes unless necessary for the conservation of goods, assets and equipment. During the strike, the union shall guarantee sufficient number of employees to ensure essential activities listed by the law.

      Last verified on Thursday 9th March 2017

    • Brazil

      As a general rule, the applicable legislation and jurisdiction is determined by the work location. This is to say that the Brazilian labour legislation will apply to the work performed in Brazil even if the parties had originally elected another jurisdiction. However, we envisage three possible scenarios in which a labour relationship governed by Brazilian law could also be governed by the labour laws of other jurisdictions as follows:

      • if the employment agreement sets forth benefits and guarantees pursuant to other countries’ legislation, they would apply in addition to the ones established by local law;
      • if the work is performed in Brazil under special authorisation by immigration authorities allowing the employment relationship to be kept abroad (eg, technical support from a foreign company – employer – to a Brazilian customer or partner to transfer technology to Brazil); or
      • temporary transfer of an employee to another country, in which case the applicable law would be of the foreign country for the duration of the transfer although minimum guarantees established by Brazilian law would also apply.

      Last verified on Thursday 9th March 2017

    • Brazil

      Since the creation of the International Labour Organization (OIT) in 1919, Brazil has ratified 96 international treaties and conventions, of which 82 are in force and 14 have been revoked, as follows:

      Convention Title Status
      3 Maternity Protection Convention Revoked on 26 July 1961
      4 Night Work (Women) Convention Revoked on 12 May 1937
      5 Minimum Age (Industry) Convention Revoked on 28 June 2001
      6 Night Work of Young Persons (Industry) Convention In force
      7 Minimum Age (Sea) Convention Revoked on 9 Jan 1974
      11 Right of Association (Agriculture) Convention In force
      12 Workmen’s Compensation (Agriculture) Convention In force
      14 Weekly Rest (Industry) Convention In force
      16 Medical Examination of Young Persons (Sea) Convention In force
      19 Equality of Treatment (Accident Compensation) Convention Cancelled
      21 Inspection of Emigrants Convention In force
      22 Seamen’s Articles of Agreement Convention In force
      26 Minimum Wage-Fixing Machinery Convention In force
      29 Forced Labour Convention In force
      41 Night Work (Women) Convention Revoked on 25 April 1957
      42 Workmen’s Compensation (Occupational Diseases) Convention In force
      45 Underground Work (Women) Convention In force
      52 Holidays with Pay Convention Automatically revoked on 23 September 1998
      53 Officers’ Competency Certificates Convention In force
      58 Minimum Age (Sea) Convention Automatically revoked on 28 June 2001
      80 Final Articles Revision Convention In force
      81 Labour Inspection Convention In force
      88 Employment Service Convention In force
      89 Night Work (Women) Convention In force
      91 Paid Vacations (Seafarers) Convention Automatically revoked on 24 September 1998
      92 Accommodation of Crews In force
      93 Wages, Hours of Work and Manning (Sea) Convention Not in force
      94 Labour Clauses (Public Contracts) Convention In force
      95 Labour Clauses (Public Contracts) Convention In force
      96 Fee-Charging Employment Agencies Convention Revoked on 14 January 1972
      97 Migration for Employment Convention In force
      98 Right to Organize and Collective Bargaining Convention In force
      99 Minimum Wage Fixing Machinery (Agriculture) Convention In force
      100 Equal Remuneration Convention In force
      101 Holidays with Pay (Agriculture) Convention Automatically revoked on 23 September 1998
      102 Social Security (Minimum Standards) Convention In force
      103 Maternity Protection Convention In force
      104 Abolition of Penal Sanctions (Indigenous Workers) Convention In force
      105 Abolition of Forced Labour Convention In force
      106 Weekly Rest (Commerce and Offices) Convention In force
      107 Indigenous and Tribal Populations Convention Automatically revoked on 25 July 2002
      108 Seafarers’ Identity Documents Convention Automatically revoked on 21 January 2010
      109 Wages, Hours of Work and Manning (Sea) Convention Convention not in force
      110 Plantations Convention Revoked on 28 August 1970
      111 Discrimination (Employment and Occupation) Convention In force
      113 Medical Examination (Fishermen) Convention In force
      115 Radiation Protection Convention In force
      116 Final Articles Revision Convention In force
      117 Social Policy (Basic Aims and Standards) Convention In force
      118 Equality of Treatment (Social Security) Convention In force
      119 Guarding of Machinery Convention In force
      120 Hygiene (Commerce and Offices) Convention In force
      122 Employment Policy Convention In force
      124 Medical Examination of Young Persons (Underground Work) Convention In force
      125 Fishermen’s Competency Certificates Convention In force
      126 Accommodation of Crews (Fishermen) Convention In force
      127 Maximum Weight Convention In force
      131 Minimum Wage Fixing Convention In force
      132 Holidays with Pay Convention In force
      133 Accommodation of Crews (Supplementary Provisions) Convention In force
      134 Prevention of Accidents (Seafarers) Convention In force
      135 Workers’ Representatives Convention In force
      136 Benzene Convention In force
      137 Dock Work Convention In force
      138 Minimum Age Convention In force
      139 Occupational Cancer Convention In force
      140 Paid Educational Leave Convention In force
      141 Rural Workers’ Organizations Convention In force
      142 Human Resources Development Convention In force
      144 Tripartite Consultation (International Labour Standards) In force
      145 Continuity of Employment (Seafarers) Convention In force
      146 Seafarers’ Annual Leave with Pay Convention In force
      147 Merchant Shipping (Minimum Standards) Convention In force
      148 Working Environment (Air Pollution, Noise and Vibration) Convention In force
      151 Labour Relations (Public Service) Convention In force
      152 Occupational Safety and Health (Dock Work) Convention In force
      154 Collective Bargaining Convention In force
      155 Occupational Safety and Health Convention In force
      158 Termination of Employment Convention Revoked on 20 November 1996
      159 Vocational Rehabilitation and Employment (Disabled Persons) In force
      160 Labour Statistics Convention In force
      161 Occupational Health Services Convention In force
      162 Asbestos Convention In force
      163 Seafarers’ Welfare Convention In force
      164 Health Protection and Medical Care (Seafarers) Convention In force
      166 Repatriation of Seafarers Convention In force
      167 Safety and Health in Construction Convention In force
      168 Employment Promotion and Protection against Unemployment Convention In force
      169 Indigenous and Tribal Peoples Convention In force
      170 Chemicals Convention In force
      171 Night Work Convention In force
      174 Prevention of Major Industrial Accidents Convention In force
      176 Safety and Health in Mines Convention In force
      178 Labour Inspection (Seafarers) Convention In force
      182 Worst Forms of Child Labour Convention In force
      185 Seafarers’ Identity Documents Convention In force

      Other international treaties are signed with other countries for immigration purposes.

      Last verified on Thursday 9th March 2017

    • Brazil

      The majority of the labour judges understand that the election of arbitration cannot limit the employees’ access to labour courts. In addition, and based on the same constitutional principles, the respective decisions would not be valid because employees cannot validly waive statutory employment rights but towards court. Still, there are few precedents considering that non-statutory employment rights (eg, contractual bonuses and stock option rights) could be subject to arbitration. In addition, and although not common, collective labour agreements or arrangements can validly include arbitration clauses for their revision and renewal. As regards jurisdiction, the Brazilian Federal Constitution establishes that Brazilian labour courts have exclusive jurisdiction over disputes resulting from work performed in the Brazilian territory. There are also precedents recognising the jurisdiction of Brazilian labour courts whenever there are relevant elements of connection with Brazil (eg, employee’s nationality, place of admission, location of the employer, etc). In all these cases, a decision from a foreign court would not limit the employees’ access to a Brazilian labour court or substitute a local decision.

      Last verified on Thursday 9th March 2017

    • Brazil

      The Brazilian Labour Code establishes a mediation system involving unions (Camaras de Conciliação e Julgamento or CCJ)). It has been created in 2000 in an attempt to reduce the number of individual labour claims overburdening labour courts. However, labour courts themselves were of the opinion that (i) the CCJ could not be a requirement before litigation due to the constitutional principle of unlimited access to courts and (ii) that a settlement reached before a CCJ would not limit the employee’s right to claim for differences through a lawsuit due to the nature of employment rights (which are regarded as public matter by the Federal Constitution and, as such, cannot be waived except before a court of law). In view of that, the CCJs have become innocuous.   

      Last verified on Thursday 9th March 2017

    • Brazil

      Brazilian Labour Law provides that the jurisdiction is of the labour court with authority in the last territory where the employee (claimant or defendant) worked. Exception is made for employees who do not have a main work location because frequent travel is part of the agreement. In this case, jurisdiction is determined by the employee’s residence or to the location of the agency or branch that he or she is directly subordinated to. The labour claim must be in Portuguese, as well as all the documents brought by the parties. Documents and testimonies in other languages require sworn translation. A few terms in Latin are also validly used to refer to legal expressions.

      Last verified on Thursday 9th March 2017

    • Brazil

      A class action may be filed by the union or by the Public Attorney’s Office for Labour Affairs before labour courts to enforce labour rights or to create or modify working conditions. A class action is filed on behalf of a group or category of employees referred as a group. There is also the possibility of a lawsuit filed by multiple plaintiffs if the claims are the same, against the same employer and subject to the same jurisdiction. A labour claim with multiple plaintiffs can be filed directly by the plaintiffs or by the union as their substitute. Different from the class action, this collective lawsuit requires identification of each plaintiff. According to the Federal Constitution, labour courts have jurisdiction over any dispute resulting from a labour relationship. As a consequence, labour courts have exclusive jurisdiction over grievances of human rights in a labour relationship, which actually constitute very common source of labour claims.

      Last verified on Thursday 9th March 2017

    • Brazil

      Regardless of nationality, a diploma obtained abroad needs to be confirmed by a public Brazilian law school, which normally requires additional study and tests. After that, the lawyer also needs to be approved by the Brazilian Bar Association, which also requires additional tests. Exception is made to lawyers registered with the Portuguese Bar who are accepted by the Brazilian Bar without further tests or confirmation of their diploma. The foreign lawyer registered with the Brazilian Bar Association can then act in Brazil with no special limitations, subject to the same duties and with the same professional rights of a Brazilian lawyer. Foreign lawyers may act in Brazil as consultants on foreign law.

      Last verified on Thursday 9th March 2017

    • Brazil

      Generally speaking, a foreign award does not limit the jurisdiction of Brazilian labour courts. If the foreign award is not challenged in its merits, it could be enforced by a Brazilian court after ratification by the Superior Court of Justice. However, if the decision is challenged in a Brazilian labour court with concurrent jurisdiction, the Brazilian court would have the authority to review all elements of the case and take its own decision.

      Last verified on Thursday 9th March 2017

    • Brazil

      Yes. Labour courts can grant interim relief, provided there is consistent evidence of the credit and that waiting for a final decision would cause irreparable loss or jeopardise final enforcement. The relief shall be requested by the plaintiff since the judge cannot grant it voluntarily. Once relief is granted, the same labour court will proceed with immediate enforcement. For this purpose, the court may use agreements with public institutions to block bank accounts and forfeit credits, vehicles and real estate. An interim relief is a temporary decision to be cancelled and substituted by a final decision. The effects of the interim relief are applicable to assets located abroad, although actual enforcement will depend on the laws of that jurisdiction. There are no limitations to interim reliefs against unions.

      Last verified on Thursday 9th March 2017

    • Brazil

      A labour court can order any party or third-party to present documents, information and even to testify. Once notified, the witness is obligated to attend the hearing and commit to the truth. Non-attendance without just cause subjects the witness to a fine or even police force.

      Last verified on Thursday 9th March 2017

    • Brazil

      There are several remedies to challenge court resolutions that depend on the type of proceeding and circumstances. Generally speaking, by virtue of a constitutional principle, all judicial decisions entitle the defeated party to file at least one appeal to review the entire case. Depending on the type of proceeding and grounds for appeal, there may be access to a third instance. The same applies to the enforcement proceeding. In addition, motions for clarification and interlocutory appeals are rather common. After the decision becomes final (no longer subject to appeals) the only remedy against it may be an annulment action based on limited grounds listed by the law. The information above refers to judicial decisions on ordinary labour claims. In terms of statutory labour rights, arbitration is subject to judicial review within the applicable statute of limitations.

      Last verified on Thursday 9th March 2017

    • Brazil

      The grounds for an appeal are essentially: the laws and regulations; international conventions and treaties; other court orders and decisions; collective labour agreements and bargaining arrangements; constitutional principles and guarantees; legal contractual provisions; and conflicting court precedents in similar cases. There are several ways to challenge a court award depending on the circumstances. In an ordinary labour claim, an appeal may be filed within eight days. A motion for clarification may be filed within five days. Although the purpose of such motion is not to modify the award, the modification sometimes results from the clarification or correction requested. If the award is not subject to appeal, it may be the case of independent lawsuits (ie, a writ of mandamus or annulment action).

      Last verified on Thursday 9th March 2017

    • Brazil

      The prevailing position of labour courts is that the right to sue an employer is not generally waivable as statutory employment rights are all upheld as a matter of public policy. In addition, based on a constitutional guarantee of access to courts, a labour court would have the authority to review the merits and the arbitration agreement or award and take its own decision.

      Last verified on Thursday 9th March 2017

    • Brazil

      Yes. The Brazilian Labour Code (CLT) provides that labour debts are subject to monetary correction to reflect inflation and to interests of 1 per cent per month. Attorney’s fees may be awarded depending on the nature of the lawsuit and on the circumstances. Attorney’s fees are not awarded in ordinary individual labour claims, except if the plaintiff is represented by an attorney of the union. 

      Last verified on Thursday 9th March 2017

    • Brazil

      Yes. Although the employment for an indefinite period of time is the general rule, there are exceptions. Employees can be hired for a definite period of time directly by the employer – based on an employment agreement for a limited period of time – or indirectly, through a temporary services agency.

      An employee can be directly hired for a limited period of time for (i) services of a temporary or transitory nature and (ii) corporate activities that are not permanent. The term is limited to the duration of (i) or (ii) and cannot be longer than two years, including renewals.

      A company may also hire an employee for a limited period of time using a temporary agency duly registered with the Minister of Employment for that purpose. In this situation, the individual is employed by the agency but put temp­orally under the orders and directions of the company, which is jointly liable for the payment of employment rights. A company can only hire individuals through temporary agencies to cover temporary needs of the company resulting from the temporary substitution of regular and permanent employees or an extraordinary increase in the amount of work. The maximum duration of this type of agreement is of three months, renewable twice for an extra three months per renewal, upon the Ministry of Employment’s consent, totalling maximum of nine months.

      Last verified on Thursday 9th March 2017

    • Brazil

      Yes. The law authorises a probationary initial period – which is supposed to include training – of maximum 90 days (45 days renewable for other 45 days). There are, however, collective labour agreements establishing reduced probationary periods so the limitation can be shorter, depending on the business and location.

      Last verified on Thursday 9th March 2017

    • Brazil

      Employees hired for a definite period of time, under probation or through temporary agencies, are entitled to all labour benefits and social security except for severance payments if terminated at the end of the event justifying the transitory arrangement and before its maximum duration. After that, the employment agreement is automatically extended for an unlimited period of time, entitling the employee to severance payments in the event of termination without cause.

      Last verified on Thursday 9th March 2017

    • Brazil

      Based on Court Precedent # 331 of the Superior Labour Court, outsourcing is only deemed legal for labour purposes if the services are not directly related to the services taker’s core business. There are exceptions recognised by courts to telecommunication and other public services but not unanimously. As for the private sector, an emblematic case involving forestry businesses is waiting for decision by the Supreme Court, to better define the prohibition of “core business” outsourcing.

      A bill of law specifically governing this matter is expected to be voted by senate this year.

      Until then, based on current precedents, if the services outsourced are considered to be directly related to the services taker’s core business, then the services taker and the services provider are jointly and severally liable for the compliance with labour law and for the corresponding payments related to the services provider’s employees. This also includes judicial recognition of an employment relationship with the services taker and consequent illegibility to its benefits plans and other advantages granted to regular employees.

      But even in case the outsourcing is legal (ie, specialised services not included in the services taker’s core business) the services taker is secondarily liable for the compliance with labour obligations resulting from the employment agreements entered by and between the services provider and its employees. This is to say that even under lawful outsourcing agreements, the services taker can be forced to pay for the services provider’s labour debts in case the latest becomes insolvent. 

      Last verified on Thursday 9th March 2017

    • Brazil

      There is no legislation governing non-solicitation and non-competition agreements entered by and between (former) employees and employers.

      During the employment agreement, the employee is generally prevented from being in direct or indirect competition with the employer. Non-compliance is subject to disciplinary penalty up to termination for cause – depending on the details of the case – without limitation to the employee's obligation to indemnify the employer for losses and damages caused.

      However, labour courts tend not to confirm non-competition and non-solicitation pacts surviving termination based on a general Constitutional Principle of Freedom of Employment.

      The (few) court precedents accepting non-competition pacts after termination of the employment relationship were based on certain requirements:

      • compensation for the duration of the pact, proportional to the limitations undertaken by the former employee;
      • reasonable limitation to the duration of the pact; and
      • clear indications of the businesses, positions and regions in which the former employee cannot work.

      Last verified on Thursday 9th March 2017

    • Brazil

      For a foreign client with a possible business deal in Brazil, it would be important to check the characteristics of the transaction for the possibility of employment succession. The acquisition of a business in Brazil generally causes the transfer of employment agreements and existing labour liabilities to the new owners or controllers. It would also be important to check if the characteristics of the business deal could be interpreted as the creation of an "economic group", triggering joint labour liability. As regards employment agreements, the Brazilian Labour Code covers almost all employment conditions in a detailed manner. The ability of the parties to avoid or waive statutory labour rights and obligations is very limited. Therefore, employers should opt to short and simple employment agreements covering the basic employment conditions but not all labour routines. Non-written provisions, such as verbal agreements and tacit clauses, are valid and effective as long as any party is able to demonstrate it. Labour courts tend to be very protective towards employees, who are considered to be the weaker party of the employment relationship, with limited ability to validly negotiate the employment conditions. Employment conditions can only be changed upon employee’ Brazilian Labour Law is very extensive. The Labour Code alone has 922 articles, not counting sparse legislation and other sources of labour rights such as regulations by the Ministry of Employment and the Federal Constitution. As a consequence, the answers provided above are general and are not exhaustive.

      Owing to the ongoing financial crises in Brazil, there is a number of modifications to labour law to be voted during 2017 as already announced by President. They go from facilitation of working hours offsetting to the increase of unions’ legitimacy to negotiate differently from what is established by statute, all aiming to preserve job positions even if in detriment to acquired employment rights. 

      Last verified on Thursday 9th March 2017

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