On March 22nd, 2020, Executive Order No. 927 (MP 927) was enacted, as part of the measures announced by the Federal Government (then called the Anti-unemployment Program) to mitigate the economic impacts of the worldwide Coronavirus pandemic (COVID-19).
The main goal of the aforementioned MP 927 is to temporarily change the labor legislation to preserve employment and income, to face the state of public calamity recognized by Legislative Decree No. 6, of March 20, 2020 and will be in force for the same period of the state of public calamity Decree.
For this purpose, employers and employees may enter into individual written agreements to provide for 8 (eight) specific matters:
b) special provisions regarding individual vacations;
c) special provisions collective vacation concession;
d) advancement of days off arising from future holidays.
e) flexibilization of work hours off-set schemes (“bank of hours”);
f) suspension of administrative requirements for work safety and health trainings and procedures;
g) suspension of employment for qualification (lay-off), with or without pay; and
h) Postponement of FGTS deposits for the next three months.
Furthermore, the Executive Order also determined that individual employment agreements with job guarantees will supersede collective bargaining agreement and legal provisions, with exception of employment rights foreseen by the Brazilian Federal Constitution.
I – TELEWORKING
This work regime may be determined by the employer’s discretion, by giving notice to employees 48 (forty-eight) hours in advance and may be applied to interns and apprentices. The employer is required to formalize the remote work conditions with the employee up to 30 days after its commencement.
II – INDIVIDUAL VACATION
Employees’ individual vacations may be brought forward, with 48 (forty-eight) hours’ notice (instead of the regular 30-day notice) and may be granted during the vesting period. The anticipation of the subsequent vacation periods may be negotiated individually.
The sale of up 1/3 of the vacation in cash will be conditioned to the employer´s acceptance. The payment of the vacation remuneration may be performed until the fifth business day of the month following the beginning of the vacation.
Employees who belong to the COVID-19 risk group shall be prioritized for vacation, individual or collective.
In the event of dismissal, the employer will pay the amounts not yet paid for vacation, with the remaining severance.
III – COLLECTIVE VACATION
Employees’ collective vacations may be brought forward, with 48 (forty-eight) hours’ notice (instead of the regular 15-day notice). The employer is not required to comply with the maximum and minimum period limits provided for in the CLT or communicate to the unions and the Ministry of Economy.
IV – ADVANCEMENT OF DAYS OFF ARISING FROM FUTURE HOLIDAYS
Employers are allowed to advance the leaves arising from future federal, state, district and municipal non-religious holidays and must notify the group of benefited employees at least 48 (forty-eight) hours in advance, upon express indication of the holidays taken. These holidays may be used to offset the balance in the hour bank. For religious holidays, employee agreement is required.
V – WORK HOURS OFFSET SCHEME (TIME BANK)
Employers are authorized to interrupt activities and establish a special work hours compensation scheme, through an hour bank, established through a formal collective or individual agreement, for compensation within up to eighteen months, as from the date that the state of public calamity is no longer in force.
VI – SUSPENSION OF ADMINISTRATIVE REQUIREMENTS FOR WORK SAFETY AND HEALTH.
During the state of public calamity, the obligation to carry out occupational, clinical and complementary medical examinations is suspended, with exception to dismissal examinations. Such exams must be carried out up to 60 (sixty) days after the end of the calamity state.
The obligation to carry out periodic training provided for in Regulatory Standards is also suspended and must be carried out within 90 (ninety) days after the end of the calamity state.
VII – EMPLOYEES QUALIFICATION PROGRAM SUSPENSION OF EMPLOYMENT FOR PROFESSIONAL QUALIFICATION COURSES (LAY-OFF)
Employment agreements may be suspended, by means of an individual agreement with the employee, for a period of up to four months, for the employee’s participation in a course or program for professional qualification offered by the employer, directly or through entities responsible for the qualification, with duration equivalent to the contractual suspension.
The employer may grant the employee monthly allowance, which will not be deemed as salary for payroll taxes and obligations, during the period of contractual suspension.
VIII – POSTPONEMENT OF FGTS DEPOSITS PAYMENT TERMS
The enforceability of the FGTS payment by employers, regarding the competencies of March, April and May 2020, with maturity in April, May and June 2020, respectively, is suspended. Such deposits must be paid in up to six monthly installments, being due on the seventh day of each month, starting in July 2020.
Upon its enactment, MP 927 was submitted to the National Congress for approval and confirmation. Such process should occur within a maximum of 120 days, otherwise MP 927 ceases to be enforceable.
We will continue to follow the legislative progress related to MP 927 reporting its developments.