Labor and Employment related Matters
In Brazil, labor and employment related matters are ruled by the Federal Constitution and by the Brazilian Labor Code (Consolidação das Leis do Trabalho – “CLT”), and other supplementary federal, state, municipal and social security legislations, court decisions, and collective bargaining and collective labor agreements.
This doing business intends to provide an overview of the employment and labor law regarding the most important topics for doing business in Brazil under discussion nowadays.
Furthermore, it is important to emphasize that, although Brazil has a strong labor and employment legislation in force, under the Brazilian labor principles, the factual findings also play a critical role, because many times they are more important than formal documents for establishing the employees’ rights and obligations.
TABLE OF CONTENT
1. Governing law_P.05
Any labor contract is governed by the law of the country where the services are rendered, according to the territoriality principle or lex loci executionis. Thus, if workers are based in Brazil, and perform their activities in Brazil, they are subject to the Brazilian legislation. However, if services are rendered part in Brazil and part abroad, the Brazilian law may apply subject to the factual findings.
2. Labor and employment law applicable to employees_P.06
Brazilian labor law recognizes a labor employment relationship when an employee renders services to a company on a personal and regular basis, with subordination, and upon compensation.
3. Employment registration_P.07
The hiring of an employee needs to be registered on the “employment booklet”.
4. Basic labor rights_P.08
a. Work hours Limitation_P.08
b. Thirteenth salary or Christmas bonus_P.08
c. Vacation_P.09
d. Guarantee fund for length of service_P.10
e. Other benefits
5. Overtime_P.11
If employees work extra hours during business days (Monday to Saturday), overtime is subject to, at least, a 50% increase. As for Sundays and holidays, overtime is increased by 100%. However, rates can increase due to collective bargaining agreements, employment agreement or the company’s practices.
6. Severance pay_P.12
According to the Brazilian labor law any employee may be dismissed without cause, at any time, provided that the employee receives a prior notice of thirty days and the due severance pay.
7. Amendments to the employment agreement _P.13
The Brazilian Labor Code provides that any amendment to an employment agreement is only valid if made in writing by mutual consent, and not in detriment to the employee.
