One Year Later: Looking At The Impact Of Brazil's Labor Reform

Authored by Joyce Martinusso

It has been one year since the implementation of Brazil's labor reform, one of the deepest sets of labor laws in generations. While the expectation of changes in the country was high, the result has fallen short.

The law aimed to modernize the legal framework governing employee relations in order to help re-vitalize the economy. But there is a huge amount of instability in the judicial scenario regarding the application of the new rules. Companies have seen this and many have failed to implement the changes into their businesses.

Intermittent work reforms

One of the more controversial parts of the law surrounding intermittent work has been relatively successful. Companies can hire workers with hourly wages and only call them when needed. The fear surrounding this change was that companies would replace full-time workers with on-call workers and only hire people when they didn't want to pay overtime. Instead, companies that put this part of the reform into action actually helped employers with having a flexible workforce ready to go when needed.

While the labor reform laws were supposed to bring new jobs to Brazil, it has not had the intended effect, there are still over 12 million unemployed people, according to IBGE ((Brazilian Institute of Geography and Statistics) recent research, but the laws did reduce the number of labor lawsuits, according to the Superior Labour Court (TST - Tribunal Superior do Trabalho). Labor lawsuits decreased approximately 70% in one year, from 289.7 thousand new claims in November 2017, to 89 thousand at the same month one year later.

Flexible working hours and vacations

Prior to the reform, the Bank of Hours were submitted for approval at the Workers Union. Now the Bank of Hours can be much more flexible with negotiations between employees and employers and be set forth...