Proposed Law May Change Outsourced Labor Benefits in Brazil

By Jay Forte, Contributing Reporter

RIO DE JANEIRO, BRAZIL – The House of Representatives in Brazil approved a proposed law to change the definition of terceirização (outsourcing) in regard to labor law. Specifically the proposed law addresses what types of business activities can be defined as eligible for outsourced labor, and avoid the legal “encargos trabalhistas” (employment costs) such as taxes and travel and meal allowances afforded to those workers.

The bill before Congress changes the current law that says that a company cannot outsource its principal functions. Under the new law, businesses could outsource anyone they like, much to the protest of labor unions.

President Dilma Rousseff said on Thursday (April 9th) that the government is following the negotiation of the processing of the bill amending the regulation of outsourcing with attention in order to avoid damage to the labor laws. “The government’s position is in effect that outsourcing can not compromise workers’ rights.”

“We can not disrupt the world of work and we have to ensure that companies that are contracted ensure payment of salaries, social security contributions and their taxes. In this sense, we look with great interest at how the vote going forward will unfold,” the president said.

The bill was approved late Wednesday, April 8th, evening by the House of Representatives. Members of the ruling PT (Workers Party) were the most critical of the legislation, while the PMDB were the most supportive of the adoption of the proposal. There were 324 votes in favor, 137 against and two abstentions.

For the spokesperson supporting the legislation, Arthur Oliveira Maia, the project approval was a victory of legislation and workers. “It was a great victory, because today we managed to secure the rights and provide legal certainty to around 12.5 million workers who have never had a law that would ensure their labor rights. This law is inclusive,” noted the rapporteur.

Oliveira Maia said that today there is no supervision in outsourcing, which hurts workers, but with the new law there will be a practice.

The House of Representatives will have the chance to amend the text of the law next week, before it will go into the Senate, which also needs to approve it in order for the law to enter into force.