Decrees, orders or guidelines in effect and pertaining to reopening facilities.
States and cities have different rules related to reopening facilities and, further, it also varies in accordance with the activity performed by the company. It is necessary to check the Decrees, orders and guidelines in effect for your type of activity and location before reopening.
Optimal approach to keep track of the latest updates.
States and cities usually have their own website with updated information about applicable COVID-19 rules. Here are some websites that include current information about the Decrees, orders or guidelines in effect in São Paulo and Rio de Janeiro:
General Controllership of the Municipality of São Paulo: https://www.prefeitura.sp.gov.br/cidade/secretarias/controladoria_geral/a_cgm/index.php?p=297823
Decrees of the Government of São Paulo with measures to prevent and combat the new coronavirus: https://www.saopaulo.sp.gov.br/spnoticias/decretos-do-governo-de-sp-com-medidas-de-prevencao-e-combate-ao-novo-coronavirus/
Attorney General of Rio de Janeiro publications related to COVID-19 State and Federal Legislation: https://pge.rj.gov.br/covid19/
Government subsidies and special relief resources allocated to support employers, and workers, in their efforts to maintain employment and pull through the crisis.
On 1 April 2020, the Brazilian Federal Government issued Provisional Measure (MP) No. 936/2020, which established an emergency employment and employees’ income maintenance program (Program) and determined additional measures that could be adopted by companies during the COVID-19 pandemic. On 7 July 2020, the MP was converted into Law No. 14,020/2020.
The Program first established by the MP and now part of the Law No. 14,020/2020 has three defined goals:
To achieve the goals of the Program, Law No. 14,020/2020 establishes the possibility to (i) reduce salary and working hours and (ii) to suspend employment agreements. Law No. 14,020/2020 also establishes an Emergency Benefit to be paid by the Federal Government to the employees, when the reduction of working hours/salary or suspension is implemented (see section VI. Cost-Reduction Strategies, part a. Furloughs and salary reductions for more information).
Requirements mandated by law or any official guidance.
States and cities have different rules, both compulsory and recommended, regarding healthy and safety measures, which vary in accordance with the activity performed by the company. Nevertheless, the employer has the duty to preserve the employees’ rights to perform and develop their activities in a healthy and safe work environment. Thus, preventive measures should be implemented by employers.
Measures typically implemented by employers and the associated legal risks, limitations, obligations and issues to consider.
Measures recommended and typically implemented:
Measures adopted by some companies and those that may be mandatory depending on employer’s activity and location:
In both cases, the employer should be careful to avoid any type of discriminatory treatment, must provide the employees with information on the data that is collected and they should be conducted by a health professional (e.g. doctor, nurse, technical professional in health, who works at the company or is hired by the company for such purposes). Also, the employer should have a protocol in place on how to proceed in view of the results verified. We recommend deleting the information as soon as it becomes irrelevant.
Employers should be careful to avoid any type of discriminatory treatment and must provide the employees with information on the data that is collected. Here too, it is recommended to delete the information as soon as it becomes irrelevant.
Policies and procedures for telework once the business reopens.
Telework remains an option and is an alternative already established by the Brazilian Labour Code (CLT). It requires amendments to the employment contract, health and safety guidelines, and agreement by the parties with respect to infrastructure and costs.
Guidelines issued by some states and cities, advise employers to continue to offer accommodations for employees who need to continue to work remotely (e.g. employees who fall within one or more at-risk-groups).
Recommendations for teleworking:
Management of quarantine, childcare and medical leave for employees affected by COVID-19.
Brazil does not recognise family leave, administrative leave or unpaid parental leave. However, employers may choose to adopt unpaid leave if requested by employees. Employees affected by COVID-19 will be on medical leave. Employers are responsible for the payment of the regular remuneration during the first 15 days of leave, and the social security agency is responsible for the payment of a sick leave allowance for the remaining period of the medical leave. Depending on the terms of the applicable collective bargaining agreement, employers may have to pay a supplementary sick leave allowance.
Employees who fear infection and refuse to work.
We recommend verifying if there is any valid reason other than a “fear of infection”. Depending on the situation, employers may agree on remote working or may demand the immediate return to in-office work. Disciplinary measures may also be adopted.
Disclosure of employees who are infected.
Individuals who may have been exposed to suspected or confirmed cases of infection, should be advised to monitor their health for 14 days from the last day of possible contact. However, in general, the name of the infected employee should not be disclosed; employers should communicate just the department where he/she works.
To what extent can employers implement the following cost-reduction strategies as a result of COVID-19, and what are the primary limitations on each?
Besides the alternatives established by Law No. 14,020/2020, enacted in view of the COVID-19 pandemic, the Brazilian Labour Code previously recognised the possibility to suspend employment agreements for a period of 2 (two) to 5 (five) months for professional qualification (e.g. the participation of the employee in a course or professional qualification program offered by the employer). Over the course of the COVID-19 crisis, most employers have decided against employing this option. To adopt this alternative, there are several aspects that the employer must be aware of, including the necessity to negotiate a collective bargaining agreement with the employees’ union. During the suspension of the contract, the employee may apply for a professional qualification scholarship granted by the Special Secretariat for Social Security and Labour, linked to the Ministry of Economy (for more information, please visit http://trabalho.gov.br/seguro-desemprego/modalidades/bolsa-qualificacao).
Redundancy is considered a termination without cause in Brazil. There is no rule currently in place that forbids termination during the COVID-19 pandemic. Thus, companies may continue with to take such action during this period, upon the payment of the mandatory severance. Although negotiations with unions are not mandatory to perform large scale/mass terminations, depending on the size of the company, location and union representing the employees, we recommend negotiating with the union before carrying out such terminations.
An alternative that may be adopted in large scale/mass terminations, would be to negotiate with the union and implement an Incentivised Dismissal Program (“PDI”), where the company offers other benefits in addition to the mandatory severance, and employees who wish to receive these additional benefits, voluntary elect to be terminated, and also grant full release to the employment agreement.
The Brazilian Labour Code provides that in the event of partial or temporary interruption of the business activity, or the closure of a company due to a determination of a public authority, the employer may consider the employment contracts to be extinguished and claim “fact or order of the Government” (Government Act – “Fato do Príncipe”). As a consequence, the compensation due to employees, related to this period, shall be paid by the respective public authority. We recommend that employers proceed with great caution when considering this option, because, in a court proceeding, it will be very difficult to obtain a favorable decision recognising this condition.
The most common procedure is to terminate the agreements without cause, upon the payment of the mandatory severance. Depending on the number of employees to be terminated, location of the company and the union that represents the employees, a negotiation of the terminations with the union is recommendable, as well as the alternative option to adopt the Incentivised Dismissal Program (“PDI”) mentioned above.
Tips, recommendations and common pitfalls.
We recommend updating policies regarding health and safety measures in the workplace, implementing employee training programs, evaluating the need for work-related travel and in person meetings, accommodating employees of at-risk-groups or those who live with members of an at-risk group, adopting reduced in-office working hours, rotating shifts for (groups of) employees, flexibility in working hours and offering the option for teleworking, if possible.