START OF THE EMPLOYMENT RELATIONSHIP 

Who can work in Brazil?

As a rule, only people over 18 (eighteen) years and fully capacitated can sign a labour contract.

People over 16 years may also work as interns, signing a contract with the participation of the educational institution they attend (L. n. 11.778 / 2008), limited to 2 (two) years.

Child labour (under 16 years) is prohibited by law, except for apprentices. Children, adolescents and young adults from 14 years and up to 24 years may work as apprentices on a learning contract, signed for a specified period. Any type of work by children under 14 years is prohibited.

What are the main sorts of labour contract that exist in Brazil?

The standard employment contract is governed by the Consolidation of Labour Laws (Decree 5.452/54), and is signed for an indefinite period.

There is also the “experience contract”, signed for no more than ninety (90) days (“period of experience”), after which, if the employer chooses to not definitely hire the employee, both parties are released without further measures or payments.

There are special work contracts, governed by its own statutes, namely:

• Temporary Worker (L. n. 6019/74). It is signed for a definite period, but is allowed only to meet a temporary need for replacement of the employer’s regular and permanent staff or for extraordinary extra services.

• Domestic employee (Law 5.859/72): their rights are more flexible in relation to the standard labour contract. The Federal Constitution was recently amended to match the domestic employee to the other employees, but its effect depends on subconstitutional laws, that are yet to be made.

• Rural Employee (L. n. 4.214 / 62 and 5.889/73): the rural work has variations in relation to the standard contract, as an example, there are different time-lines for the characterization of night work.

• Intern (Law No. 11,788) (see previous item);

• Apprentice (Articles 428 and subsequent of the Consolidation of Labour Laws) (see previous item);

• Director of Society: there is controversy about the legal nature of the contract when the employee takes charge of management and direction. The most accepted interpretation in the courts says that the standard labour contract is suspended in relation to the director, no longer being applied labour laws to it, unless the director remains subordinate to the employment relationship.

NOTE There is a proposal of outsourced work (subcontracting) regulation pending before the Brazilian Congress, permitting this type of work in every activity of the employer. Nowadays, outsourcing work is already recognised as legal by the courts, but only with regarding to support activities (cleaning, security, etc.). 

What are the main features of each type of contract?

As the main features of the special contracts were listed in the previous items, we will focus on the common labour contract. Its main features consist of

• Bilateralism: there are rights and obligations due in both sides of the labour relationship;

• Obligation: the employee works for payment;

• Mutuality: the labour contract involves mutual consent on both sides of the labour relation;

• Personal service: the person of the employee is obliged personally to perform the labour contract. The transfer of the contract to third parties or its replacement are forbidden;

• Regular basis: the employee does not perform casual services for the employer, but continuous work and on a regular basis;

• Indefinite period: the labour contract shall not be foreseen to an end;

• Subordination: essential element of the labour contract – the employee works under the direction of the employer and must comply with their orders. 

What information should employees be given in Brazil?

All general aspects of the contract (salary, working hours, entry and exit times, exact limits of functions and duties, etc.) must be provided to the employee at the time of hiring.

They must also be given information about the company regulations regarding, for example: length and time of the intra-day intervals; procedures for justifying an absence; required documents to justify the absence and vacation request procedure, etc.

It is important to note that, in Brazil, the labour rights provided by law are considered cogent norms, so that the employment contract cannot exclude them. Thus, the rights are due, even if they are not provided by the contract or if the employee is not informed about them.

Depending on the activity performed by the employer, the employee must take courses on environment and/or health and safety (EHS) matters. 

DURING THE EMPLOYMENT RELATIONSHIP 

What are the main employment rights in Brazil?

The main employment rights in Brazil are:

• Payments of salary and minimum wage: the salary cannot be lower than the minimum wage established by the Government (currently 937 BRL or approximately 252 EUR per month);

• Irreducibility of wages, except if a collective agreement regulates it differently, which must be accompanied by a reduction on the working hours;

• Observance of maximum working hours and payments for overtime hours increased by 50%;

• Supplements for night working;

• Supplements for unhealthy work (increasing from 10 to 40% of minimum wage, depending on the scale of unhealthiness);

• Supplements for dangerous work (30% over settled wage in labour contract);

• Supplements in case of transferring an employee through workplaces during the same contract (25%);

• Annual 13th salary;

• Intraday breaks: every working day of more than 6 hours of work must be interrupted by an obligatory break for rest or a meal. This break shall not be less than 1 hour and, except as otherwise provided by a written agreement or a collective contract, it may not be more than 2 hours. In the case of a working day of more than 4 hours, but less than 6 hours, a break of 15 minutes is compulsory. The breaks are not considered as working hours;

• Break between daily journeys of at least 11 hours;

• Paid weekly rest of at least 24 hours;

• Leave shall be granted by the employer in a single period in the course of the 12 months following the date on which the employee becomes entitled to it;

• Unemployment compensation fund (also known as FGTS): every month the employer must deposit the equivalent of eight percent of salary in a blocked bank account in the name of each employee. This is in addition to the salary.

Collective agreements between employers and employees or between trade unions of their respective categories may raise values and increase rights of workers of a certain class or company.

What are the maximum permitted daily, weekly, monthly and annual working hours?

The maximum daily working hours are 8 (eight), payment on overtime hours is increased by 50%.

The maximum weekly working hours are 44 (forty-four).

Brazilian legislation does not impose maximum monthly or annual working hours.

Collective agreements may reduce maximum worktime provided by law, to a certain class or company of workers.

Are there any minimum number of hours required?

There are no minimum number of hours required.

What is the minimum holiday entitlement?

30 days each 12 months (“acquisition period”). The first holidays, however, can only be enjoyed after twelve months of work.

The holidays can be enjoyed at any time in the 12 months subsequent to the completion of the “acquisition period”. However, they must be enjoyed all at once. In exceptional conditions, an employee can divide their holidays into two periods, and one of them must last less than 10 days.

Can a contract be modified while still valid and in force? If so, under which circumstances?

As a rule, the labour contract cannot be modified to the detriment of the employee, even with her/his consent. Some modifications, however, are allowed:

• By agreement between employee and employer in cases where it does not cause prejudice to the employee;

• Collective agreements may even entail a wage reduction but it must be accompanied by a reduction on the working hours.

Another exception consists of the “jus variandi” which gives the employer the power to unilaterally change the contract. This only applies in specific situations, such as:

• Change of duty – when the employee leaves a confidence duty to return to her/his original duty;

• Change of duty – when the employee is called upon to take charge of an interim function or a function in commission;

• Change of duty resulting from the re-adaptation by reasons of physical or mental disability;

• Changing of the workplace, as long as there is need of the service or in cases of business establishment shutdown.

Are any particular employment relationships subject to special protection?

Yes. The most common examples are:

Women: specific rights guaranteed to women, such as:

• Maternity leave of at least 120 days, without loss of salary or employment;

• The prohibition of termination of employment by the employer of the pregnant woman (“stability”), from confirmation of pregnancy up to five months after birth. This right is extended to the woman who adopts or obtains legal custody for adoption, regardless of the age of the child.

• The function transfer is assured during pregnancy, when it adequate the woman’s work to her situation, ensuring, after maternity leave ends, the resumption of the work previously performed.

• The right to two half-hour breastfeeding breaks per day.

• The right to day care in the workplace in firms with more than 30 female employees over 16 years.

Bank workers:

Bank workers work continuously, but their daily working period is limited to 6 hours, on weekdays, totalling 30 hours per week. This does not apply to management, monitoring, direction positions and equivalents, or positions of trust. Exceptionally, the working day can be extended to 8 hours and cannot exceed 40 hours per week. The extra hours are paid with a supplement of 50%.

Employees of telephone companies and operators:

The working hours of employees of telephone companies and telephones operators are limited to 6 hours per day and 36 per week.

Telephone operators can perform overtime but only in cases of inevitable need and the extra hours are paid with a supplement of 50%.

Teachers:

The working day of teachers is counted in given classes that range from 40 minutes (evening classes in elementary or middle school) to 60 minutes (in general). The teacher cannot give more than 4 consecutive classes and 6 hours interspersed at the same day in the same educational establishment.

Are there any obligations to consult with a works council and/or to undertake collective bargaining?

A kind of works council is mentioned in art. 11 of Brazilian Federal Constitution, which guarantees their existence in companies with more than 200 employees. However, there is no legal provision mandating the submission of decisions to it.

On the other hand, collective bargaining involving the unions of employees are necessary and binding on various issues, such as:

• Collective termination of labour contracts;

• “Hour bank” creation;

• Salary reduction, accompanied by working hours reduction;

• Collective leave;

• Suspension of labour contracts;

• Reduction of intra-day interval. 

END OF THE EMPLOYMENT RELATIONSHIP 

When and how can an employee terminate an employment relationship?

The employee can ask for their own dismissal, giving the employer previous notice of 30 days. The employee must work during this period, unless the employer agrees to release them.

Lack of notice authorizes the employer to discount the salary corresponding to the period of previous notice (the last 30 days) from the wages due to the employee, which includes the 13th proportional salary, the not enjoyed leave and the proportional leave (this last one is only due if the employee has more than 12 months of house).

The employee may also terminate the contract by “indirect termination”, when the employer is the one who falls into any of the categories of just cause, such as: the breach of its obligations; demand for illegal, immoral or not contracted services; demanding for services superior to employee forces, among other cases (article 483 of the Consolidation of Labour Laws).

In practice, it is difficult to see cases, when the employer voluntarily recognizes that an offense to the employee was committed. In these cases, the employee must notify the employer of her/his understanding, stop working, and seek in the Labour Court the recognition of the “indirect termination” and the rights deriving from it.

In this type of termination, the employee is entitled to the same rights they would have in the case of dismissal without cause by the employer. 

What are the economic consequences in each case?

Salary Balance: this amount corresponds to the number of days worked within that month in which the employee has resigned from his service.

13th proportional salary: the employee must receive in a proportional way the 13th salary corresponding to the period worked in that year. The month in which the employee works under a previous notice of leave is included in the calculation.

Holidays calculated in a simple or doubled way (when yet not enjoyed) plus the holidays calculated in a proportional way plus 1/3 of the final amount: the vacations are calculated on a simple way (normally called “simple holidays”) when all the acquisition period (normally the first 12 months of work) was fulfilled by the employee. By having resigned the employee will not be able to enjoy it. In this case, when the calculation happens, there is no multiplier added to the due amount. It is also important to characterize this way of calculation that the concession period, i.e. the 12 months after the acquisition period (when the employee may enjoy the vacations), is not over by the time the employee terminates the contract. If, by that time, the concession period has already passed by, the due amount will be calculated in double (“double holidays”). Finally, the “proportional holidays” are those in which the acquisition period is still taking place (the employee has only partially worked the needed 12 months to earn a new holiday period), they are calculated proportionally to the time worked and no multiplier is added to the calculation. In all the discussed cases, to the amount due a value of 1/3 must be added.

Note: If the employee quits, she/he will not be entitled to the unemployment insurance, nor the withdrawal of his FGTS and the fine of 40%, due to those who have been dismissed without just cause. 

Are there any situations in which an employment relationship would terminate automatically and without the need for action by either party? If so, what are they?

Yes, there are.

One case is the death of the individual entrepreneur employer, only if their successors did not continue their business activity.

The death of the employee also generates the termination of an employment contract, and her/his heirs are entitled to the salary balance, to the not enjoyed leave payment, to proportional leave, to the serving of the FGTS, to the proportional 13th salary, and to the overdue instalments of the unemployment insurance.

The end of the term of temporary and experience contracts also terminates the contract without any need for action.