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By Ed Taylor
Oct. 23—In two rulings within a single week, Brazil's supreme labor court has reversed a decades' long policy on pay due employees working in dangerous or unhealthy conditions.
The Consolidation of Labor Laws (CLT) of 1943, Brazil's basic labor legislation, requires employers to pay employees working in dangerous conditions a 30-percent wage premium and employees working in unhealthy conditions a premium of between 10 percent and 40 percent of the minimum wage. Under previous judicial interpretations of the CLT, an employer could be required to pay one or the other of these two premiums but not both to the same employee. Late September rulings in two separate cases reversed this position, however, and held that when an employee's working conditions are both dangerous and unhealthy, the employer must pay both premiums.
The first case involved railroad equipment manufacturer Amsted Maxion, a joint venture between U.S.-based Amsted Industries and Brazil's Iochpe-Maxion. A company welder working with inflammable products and exposed to a deafening work environment sued to receive at least one of the two benefits. In a surprise and unprecedented unanimous decision, however, the court awarded the employee both benefits. Writing for the court, Justice Claudio Brandao said that Brazil's 1988 Constitution does not support the CLT's separation of the two benefits, since Article 7 guarantees the right of workers to receive extra benefits for dangerous and unhealthy working conditions without any restriction.
The court held that applying both wage premiums does not constitute compensating employees twice for the same problem, since the two situations are different in kind: while dangerous working conditions threaten a worker's life, unhealthy conditions are harmful but not life-threatening.
According to his attorney, Andre Marcolino de Siqueira of the firm AMS-ALMS Attorneys, the employee, who worked for Amsted Maxion between 2004 and 2009, will receive an additional 30 percent of wages paid to compensate for dangerous working conditions and 20 percent of the minimum wage to compensate for unhealthy conditions during those five years.
“We will use this case as a precedent in our other suits,” Siqueira added.
The second case involved an employee of Citrosuco, one of the world's largest orange juice producers, who was already receiving the dangerous conditions benefit and sued to receive the unhealthy conditions benefit as well.
Ruling in the employee's favor, justice Emmanoel Pereira said “there is no sense in continuing to say that the payment of one benefit eliminates the necessity to pay the other.” The justice added that by increasing the cost for companies of maintaining employees in unhealthy and dangerous working conditions, the court “is stimulating the employer to improve the working conditions of its employees, a fact which favors the reduction of company costs.”
The new policy could have an important impact on the payroll of companies in sectors like chemicals, agribusiness and metallurgy, all of which have a heavy multinational presence in Brazil.
Speaking for the employers, labor law attorney Jurandir Zangari Junior of the law firm Zangari Attorneys told Bloomberg BNA on Oct. 16 that in his opinion both cases could still be overturned within the supreme labor court or if necessary by Brazil's federal supreme court.
“The constitution is clear in saying that these extra benefits for life and health threats must be applied as determined by law and the CLT states that they cannot be combined,” he said.
To contact the reporter on this story: Ed Taylor in Rio de Janeiro at email@example.com
To contact the editor responsible for this story: Rick Vollmar at mailto:%firstname.lastname@example.org
The Amsted Maxion decision is available at http://www.tst.jus.br/noticias/-/asset_publisher/89Dk/content/id/10376666, the Consolidation of Labor Laws athttp://www.planalto.gov.br/ccivil_03/Decreto-Lei/Del5452compilado.htm, both in Portuguese.
For more information on HR law and regulation, see the Brazil primer.
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