New workweek rules spark surge in legal consultations

Labor law firms across Brazil have seen a surge in consultations since a constitutional amendment ending the six-day workweek was enacted on October 16. With the requirement to provide two paid days off per week taking effect on December 16, employers are seeking legal advice on whether proposed changes to working arrangements could expose them to lawsuits from employees or unions. Lawyers warn that a wave of litigation is likely.

Constitutional Amendment No. 141 was approved between the first and second rounds of the presidential election, fulfilling one of President Luiz Inácio Lula da Silva’s campaign pledges. Some business leaders, however, had hoped the measure would be repealed or suspended if Senator Flávio Bolsonaro of the Liberal Party (PL) won the election, after he received more votes than President Lula in the first round.

Amid the uncertainty, law firm Rocha, Calderon e Advogados Associados created a dedicated webpage to answer frequently asked questions about the changes. Daily visits jumped from roughly 700 to more than 2,000 after the amendment was enacted, overwhelming the firm’s server and temporarily taking the page offline.

Fabiano Zavanella, a labor lawyer at the firm, said the most common question is whether the two weekly days off must be consecutive or can be taken separately. The latter is permitted. Employers have also asked whether they can introduce arrangements that redistribute the two weekly rest days throughout the month, a practice he believes could trigger litigation.

Clients are also seeking clarification about the transition to a 42-hour workweek beginning December 16, particularly whether arrangements involving shifts longer than eight hours can be negotiated directly with individual employees.

“No, that must be negotiated through a collective bargaining agreement,” Zavanella said, adding that “the biggest rush now is to engage with unions and understand how to negotiate.”

Collective bargaining challenges

Estevão Mallet, founding partner of labor law boutique Mallet Advogados, confirmed an extraordinary increase in inquiries, particularly since the amendment’s approval, which left businesses facing what he described as an “abrupt” transition.

“A company operating multiple shifts, such as a food manufacturer using a seven-days-on, seven-days-off schedule, needs not only to hire workers but also to train them, and that takes time,” he said.

Collective bargaining talks remain at a very early stage, Mallet said.

“The most likely outcome is that these negotiations will fail, the new rules will take effect, and workers’ unions will begin demanding additional benefits, such as higher profit-sharing payments, as a condition for reaching an agreement,” he said.

Mallet believes the amendment’s wording, which he considers poorly drafted because it received insufficient scrutiny, is contributing to both the flood of inquiries and the risk of legal disputes.

“We received more than 30 inquiries on this issue alone in October, far above normal levels,” he said. “We set up a dedicated advisory team just to handle it.”

The lawyer expects substantial litigation in the coming months.

“For specialized work arrangements, such as those on offshore oil platforms and in aviation, the government acknowledges the need for separate regulations. But no decree has been issued, and Amendment 141 itself says these arrangements must be regulated by law,” he said.

Mallet also expects the elimination of the six-day workweek to generate more litigation in Brazil than in other countries.

“Brazilian law requires two paid rest days per week, and any compensation for hours worked must take place within the same calendar month, or the employer faces a fine,” he said.

Holiday season pressures

The approaching Christmas shopping season is expected to intensify demand for legal advice throughout November and December, said Tatiana Modenesi, a lawyer at Bruno Freire Advogados.

“This is particularly true for retailers, since stores typically extend their opening hours and hire temporary workers, a measure that will become even more important during the transition under Constitutional Amendment 141,” she said.

Modenesi expects legal disputes to arise when employers seek to eliminate bonuses established under existing collective bargaining agreements as part of negotiations to adapt to the end of the six-day workweek.

“Demand for advisory services at our firm has already risen by about a third,” she said.

Small retailers have been particularly active in seeking legal assistance.

“They will either stop opening one day a week, usually the slowest trading day, or the owner will give up taking Saturdays off, work that shift and keep one assistant instead of two,” Modenesi said. “But there is a risk of losing customers because, in cities like São Paulo, people are very accustomed to having stores and services available seven days a week.”

For employers considering ignoring the new rules because they doubt enforcement by Brazil’s Labor Prosecutor’s Office (MPT), Modenesi warned that public awareness is already widespread.

“Everyone is talking about this issue,” she said. “Workers themselves are well aware of the changes. Failure to comply with the amendment could lead to frustration because everyone wants more time off, and if someone files a complaint, the administrative fine could be substantial.”

High-income employees

Marília Minicucci, a lawyer at Chiode Minicucci, has been warning clients about a separate provision affecting employees whose monthly compensation equals or exceeds two and a half times the maximum social security benefit, or R$21,188.

Under Constitutional Amendment 141, these employees are exempt from rules governing working hours and time tracking, unless the employer voluntarily applies them or they are required under a collective bargaining agreement. This provision is already in effect.

Minicucci said companies that currently track the working hours of employees in this income bracket must immediately adjust their employment contracts.

The concern stems from court precedents establishing that preserving more favorable employment conditions could make their subsequent removal an “adverse contractual change,” potentially rendering the amendment to the contract invalid.

“Prolonged maintenance of more favorable conditions can create legal obstacles to removing them later,” she said.

A recent ruling by the First Panel of Brazil’s Superior Labor Court supports that interpretation (case No. 326-45.2021.5.08.0011).

Payroll costs

At law firm Demarest, lawyers are examining another provision of Amendment 141 with direct implications for payroll expenses: the divisor used to calculate hourly wages for salaried employees, which also determines overtime pay.

“Under the rules of Amendment 141, the divisor will change, making the hourly wage more expensive,” said Celso Baez do Carmo Filho, a partner in the firm’s labor practice.

Carmo estimated that the workload of Demarest’s 10-member labor advisory team has increased by roughly 20% to 30% since October 16.

Most inquiries have come from retailers, industries with continuous operations and healthcare companies.

“A factory that used the six-days-on, one-day-off model, even under a collective bargaining agreement, is moving toward three-on, three-off; four-on, four-off; or two-on, two-off arrangements that accommodate round-the-clock operations,” he said.

“The number of hours worked per day is likely to increase, but the 40-hour weekly limit and two weekly rest days will remain in place. Under a four-on, four-off arrangement, for example, each employee works nine or 10 hours a day and then has consecutive days off. That is legal as long as it is agreed upon with the union,” Carmo said.

“However, most companies have not yet reached the stage of negotiating with unions.”

Union preparations

The Unified Workers’ Central (CUT), one of Brazil’s leading labor federations, and other union organizations have published a guidance booklet for affiliated unions, with legal assistance from LBS Advogadas e Advogados.

Among its recommendations is that unions immediately review existing collective bargaining provisions and formally notify employers or employer associations to request negotiations on amendments to current agreements.

The booklet also advises unions to “assess the suitability of national sectoral bargaining forums and negotiations by industry or business segment.”

LBS recommends that unions preserve provisions that are more favorable to employees, including shorter working hours already secured under existing agreements.

*By  Laura Ignacio and Luiza Calegari — São Paulo

Source: Valor International

https://valorinternational.globo.com/