Employment Law in Latin America (Brazil)
Employment Law in Latin America (Brazil)
U.S. and Korean companies that have entered South America must comply with local labor laws for employees hired locally. The first thing to know in Brazil is the existence of local employment regulations. Two-thirds of the employment of the enterprise must be a Brazilian national or permanent resident, and two-thirds of the total wage must be paid to the Brazilian. Exceptionally, a skilled artisan or professional engineer in a specific field that is lacking in Brazil may not be subject to the 2/3 duty ratio. However, in this case, it must be documented that the skilled worker or professional engineer is difficult to obtain from Brazil and must be approved by the government agency. Labor law should protect the latter of the foreigners and Brazilian nationals engaged in similar tasks in the event of a laying off.
The labor laws of Central and South America, including Brazil, are very complicated, as opposed to the Anglo - American law, as they almost copy European laws. Workers are generally disadvantageous to employers because they are designed to protect workers' rights under the "economic weak" principle. In fact, the Labor Court makes a lot of judgments favorable to workers in various lawsuits.
In Brazil, except for physical damages caused by a mountainous accident during work, the employer is usually sued for excessive overtime, unpaid overtime pay, no rest or lunch time, uneasy work environment and mental damages resulting therefrom.
In 2013, the Brazilian prosecution office filed a lawsuit demanding damages of 250 million reals for a local Samsung factory for violation of labor law.
The factory in Samsung Electronics' Manaus Free Trade Zone has about 6,000 workers and the prosecution filed a class action lawsuit against the local corporation because of the short break time for long hours of work. Before the prosecution has filed a lawsuit, there were already filed 1,500 lawsuits against Samsung Electronics, it can be guessed how many labor lawsuits are proceeding against foreign companies in Brazil.
In the case of litigation, the most common claim is asking to pay extra allowance due to overtime work. Previously, statutory working hours were 8 hours a day, 44 hours a week, and extended working hours were 2 hours a day. With the revision of the Labor Law in 2017, the limit of overtime was changed to 4 hours a day.
The law requires that 50% of the additional allowance be paid for overtime work. In recent years, it is possible to direct work orders from non-company site through media such as smart phone and internet. In addition to working hours, it should be noted that if you worked with instructions through such media, this would also be counted as working hours and subject to a supplementary allowance. (For reference, in France, it is prohibited by law to do work orders after hours)
As lawsuits have been filed too frequently against companies, the court recently requires workers to pay 2% of their claims as deposits. In addition, if a lawsuit is filed on the basis of workplace environmental risk, the cost of the appraiser (physician or labor environment expert) determined by the court. The company will not bear the costs if can proves that there is no such risk. The cost to the appraiser has been changed to a structure in which the worker is responsible rather than the enterprise.
The period of litigation is also an important issue in terms of costs. If you go to the appellate court, it usually takes about 36 months. If the trial is proceeded and the case is lost, the case can be appealed to the local labor court for a second trial. If you decide to challenge the ruling, you can be tried before the Higher Labor Court or the Supreme Court. The period of lawsuit is important because the most of local lawyers in Brazil do not charge their work in hourly basis. This increases the length of the lawsuit and increases the cost of attorneys.
It is not easy to resolve disputes through settlement and reduce attorneys' fees. If you acknowledge responsibility and pay a certain amount of compensation through settlement, then this company's admission of liability may cause additional lawsuits from other employees.
Like the United States, Brazil can let an employer dismiss workers without any special reason. When dismissed, the employer must pay the remaining salary, the 13th salary in proportion to the length of his / her period of work, and the paid leave plus one third extra leave. The absence of efforts to perform the work and the insincerity, violation of discipline or disobedience, and duties of work are justified reasons for dismissal. However, if deemed to be unfair dismissal, there is an additional payment to the employee as a penalty in accordance with the standards set by law.
Outsourcing issues around the world, such as Korea and the US, are controversial in labor relations. There is no separate law for outsourcing regulation in Brazil yet. However, if an employee of a subcontractor usually sues a subcontractor, the subcontractor will also enter the joint second defendant. If the subcontractor loses, but is unable to compensate, the second defendant will be liable. Prior to outsourcing, the contractor needs to check the relevant documents to ensure that the contractor is properly fulfilling the pay and withholding obligations to the workers in order to prevent future liability.
https://www.google.com/amp/s/amp.theguardian.com/world/2013/aug/14/brazil-sues-samsung-labour-violations
U.S. and Korean companies that have entered South America must comply with local labor laws for employees hired locally. The first thing to know in Brazil is the existence of local employment regulations. Two-thirds of the employment of the enterprise must be a Brazilian national or permanent resident, and two-thirds of the total wage must be paid to the Brazilian. Exceptionally, a skilled artisan or professional engineer in a specific field that is lacking in Brazil may not be subject to the 2/3 duty ratio. However, in this case, it must be documented that the skilled worker or professional engineer is difficult to obtain from Brazil and must be approved by the government agency. Labor law should protect the latter of the foreigners and Brazilian nationals engaged in similar tasks in the event of a laying off.
The labor laws of Central and South America, including Brazil, are very complicated, as opposed to the Anglo - American law, as they almost copy European laws. Workers are generally disadvantageous to employers because they are designed to protect workers' rights under the "economic weak" principle. In fact, the Labor Court makes a lot of judgments favorable to workers in various lawsuits.
In Brazil, except for physical damages caused by a mountainous accident during work, the employer is usually sued for excessive overtime, unpaid overtime pay, no rest or lunch time, uneasy work environment and mental damages resulting therefrom.
In 2013, the Brazilian prosecution office filed a lawsuit demanding damages of 250 million reals for a local Samsung factory for violation of labor law.
The factory in Samsung Electronics' Manaus Free Trade Zone has about 6,000 workers and the prosecution filed a class action lawsuit against the local corporation because of the short break time for long hours of work. Before the prosecution has filed a lawsuit, there were already filed 1,500 lawsuits against Samsung Electronics, it can be guessed how many labor lawsuits are proceeding against foreign companies in Brazil.
In the case of litigation, the most common claim is asking to pay extra allowance due to overtime work. Previously, statutory working hours were 8 hours a day, 44 hours a week, and extended working hours were 2 hours a day. With the revision of the Labor Law in 2017, the limit of overtime was changed to 4 hours a day.
The law requires that 50% of the additional allowance be paid for overtime work. In recent years, it is possible to direct work orders from non-company site through media such as smart phone and internet. In addition to working hours, it should be noted that if you worked with instructions through such media, this would also be counted as working hours and subject to a supplementary allowance. (For reference, in France, it is prohibited by law to do work orders after hours)
As lawsuits have been filed too frequently against companies, the court recently requires workers to pay 2% of their claims as deposits. In addition, if a lawsuit is filed on the basis of workplace environmental risk, the cost of the appraiser (physician or labor environment expert) determined by the court. The company will not bear the costs if can proves that there is no such risk. The cost to the appraiser has been changed to a structure in which the worker is responsible rather than the enterprise.
The period of litigation is also an important issue in terms of costs. If you go to the appellate court, it usually takes about 36 months. If the trial is proceeded and the case is lost, the case can be appealed to the local labor court for a second trial. If you decide to challenge the ruling, you can be tried before the Higher Labor Court or the Supreme Court. The period of lawsuit is important because the most of local lawyers in Brazil do not charge their work in hourly basis. This increases the length of the lawsuit and increases the cost of attorneys.
It is not easy to resolve disputes through settlement and reduce attorneys' fees. If you acknowledge responsibility and pay a certain amount of compensation through settlement, then this company's admission of liability may cause additional lawsuits from other employees.
Like the United States, Brazil can let an employer dismiss workers without any special reason. When dismissed, the employer must pay the remaining salary, the 13th salary in proportion to the length of his / her period of work, and the paid leave plus one third extra leave. The absence of efforts to perform the work and the insincerity, violation of discipline or disobedience, and duties of work are justified reasons for dismissal. However, if deemed to be unfair dismissal, there is an additional payment to the employee as a penalty in accordance with the standards set by law.
Outsourcing issues around the world, such as Korea and the US, are controversial in labor relations. There is no separate law for outsourcing regulation in Brazil yet. However, if an employee of a subcontractor usually sues a subcontractor, the subcontractor will also enter the joint second defendant. If the subcontractor loses, but is unable to compensate, the second defendant will be liable. Prior to outsourcing, the contractor needs to check the relevant documents to ensure that the contractor is properly fulfilling the pay and withholding obligations to the workers in order to prevent future liability.
https://www.google.com/amp/s/amp.theguardian.com/world/2013/aug/14/brazil-sues-samsung-labour-violations
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