Ten things you didn’t know about employment law in Brazil

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The 2016 Olympic Games kicks off in Rio de Janeiro on Friday 5 August with a colourful and energetic opening ceremony. It will run until 21 August, followed by the Paralympic Games from 7 September to 18 September.

The organisers are reported to have hired around 90,000 people to work at the games – there are 15,000 competitors in the athletes’ village who are expected to eat 60,000 meals a day, cooked by 300 chefs.

But for employers that operate in Brazil, what are their legal obligations to their workers?

XpertHR’s guide to employment law in Brazil gives a full breakdown, including these 10 interesting facts:

1. Employing foreign nationals

Organisations with three or more employees that employ foreign nationals must ensure that at least two-thirds of their workforce is Brazilian. In general, foreign nationals require a visa to work in Brazil.

2. Be aware of quotas

Employers with 100 or more employees are required to employ a minimum quota of employees with disabilities or who have undergone rehabilitation by the social security authorities.

3. “13th month payment”

Every year, employees are entitled to be paid a “13th month” of salary by their employer. This is also known as the Christmas bonus and is paid in two instalments.

4. No annual leave without 12 months’ service

Staff are not able to take paid annual leave until they have completed 12 months’ service with their employer. They are only able to take “collective” holidays (where an employer imposes holiday that all employees must take at the same time).

5. Redundancy doesn’t exist

There is no legal concept or definition of redundancy in Brazil. An employee who is dismissed due to the employer’s financial difficulties, insufficient work or a company restructuring would face a “dismissal without cause”, and this entitles him or her to a notice period and severance package.

6. Use of agency workers is limited

Employers can only use temporary agency workers in certain circumstances – where they need to meet an exceptional increase in workload or cover employees who are absent. Temporary work agencies must be registered with the Ministry of Labour and Employment to be able to employ workers and assign them temporarily to “user” companies.

7. Positive action is permitted in certain circumstances

Brazilian employment law permits, although does not require, organisations to adopt temporary “positive action” measures aimed at establishing equality between women and men. They are allowed to launch initiatives to correct “distortions” that affect women’s training, access to employment and working conditions.

8. Employer contributions

All employees have an account with the statutory Fundo de Garantia do Tempo de Serviço (Service Guarantee Fund), into which their employer must pay the equivalent of 8% of the employee’s pay per month. Employees are entitled to withdraw the balance as a severance payment in certain circumstances.

9. Contracts can be terminated at any time

An employer or employee can generally terminate a contract at any time without any particular reason, providing proper notice is given. There is protection for employees while certain circumstances apply, such as pregnancy or maternity.

10. No obligation to inform or consult

There is no general statutory obligation on employers to inform and consult employees or their representatives. Trade unions do not have a general right to be informed and consulted by the employer, for example on collective redundancies or business transfers. If they are, this entitlement will be based only on collective agreements.

This article has been updated. It previously appeared on 20 June 2014. 

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