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By Ed Taylor
Brazil's Senate July 11 approved the country's most extensive labor reform since its Consolidated Labor Laws (CLT) were approved in 1943.
The reform, which had already passed the lower house of congress, will allow companies and unions to reach joint agreements on 15 specific labor issues that would take precedence over existing labor legislation, giving them the force of law. Collective bargaining agreements have become more common in recent years but have always been subject to review by Brazil's ubiquitous labor courts, which have often rejected them in deference to the rigid provisions of the CLT. The reform also takes away the courts' power to impose new labor obligations on employers through their rulings.
For Luciana Freire, legal director of the Sao Paulo State Federation of Industries, Brazil's leading business association, giving precedence to collective bargaining agreements over labor legislation is the key feature of the reform.
“It is very important for what is negotiated to be respected by the judiciary,” Freire said in a July 11 statement.
Among other issues, companies and unions will be free to negotiate flexible hours up to 12 in a single day without requiring overtime compensation as long as the weekly and monthly totals remain no higher than 44 and 220 hours, respectively. Profit-sharing programs, the division of vacation time, productivity bonuses, safety issues, and salary and job plans would also be subject to collective bargaining.
To guarantee senate approval, Brazil's President Michel Temer agreed to alter some parts of the reform through veto or decree.
Significant reforms, most effective in November, include the following:
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For more information on Brazilian HR law and regulation, see the Brazil primer.
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