Bloomberg Law for HR Professionals is a complete, one-stop resource, continuously updated, providing HR professionals with fast answers to a wide range of domestic and international human resources...
By Ed Taylor
April 13—Brazil’s supreme labor court has ruled that companies cannot reduce employee overtime even if this is accepted by unions representing the employees.
Still reeling from the global financial crisis, many Brazilian businesses reached agreements with their labor unions in 2009 to reduce salaries or overtime, some of which were later challenged by individual workers.
In its April 1 decision, the country’s highest labor court ruled in one of these cases that companies cannot limit overtime in periods of hardship even if this is agreed to by the affected unions.
The case involved a Brazilian company that in 2009 limited overtime hours to a maximum of two a day. The local union agreed to the limitation and signed a collective bargaining agreement protecting the employer from any fine for reducing overtime. A company employee challenged this agreement on the grounds that it violated his rights as guaranteed by law. The company argued that it could not be penalized for reducing overtime because the decision was not unilateral and was taken in agreement with the local union.
In its ruling, the supreme labor court upheld a lower court decision that the company's action to reduce overtime was prejudicial to employees and the agreement signed with the local union exempting the company from penalization was null and void.
According to the high court's ruling, employee overtime is a basic right “not subject to collective bargaining,” so whatever the contents of the 2009 agreement with the local labor union, the company remained subject to the penalties established by law for limiting overtime. The court fined the company and ordered it to pay damages to the employee who brought the suit.
Labor attorneys criticized the court’s decision, arguing that the terms of agreements between management and labor should prevail.
According to attorney Juliana Bracks Duarte of the law firm Bracks Associated Attorneys, the clause exempting the company from paying fines should not be declared invalid because it was accepted by the union.
“It is absurd to reject a clause like this which is not endangering the health or safety of employees,” Duarte said. “On the contrary, it is reducing the daily work period, giving the employee more time with his family.”
For attorney Antonio Carlos Aguiar of the firm Peixoto & Cury Attorneys, “if the union can negotiate constitutionally and this was not a unilateral decision, there is no reason to impose a fine.”
Aguiar added that overtime amounts to a “variable salary” that can be eliminated when it is no longer necessary.
To contact the reporter on this story: Ed Taylor in Rio de Janeiro at firstname.lastname@example.org
To contact the editor responsible for this story: Rick Vollmar at email@example.com
For more information on Brazilian HR law and regulation, see the Brazil primer.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)