On 03.22.2020, Provisional Measure (MP) No. 927/2020 was published, providing for labor measures during the public calamity resulting from the pandemic caused by the coronavirus (Covid-19). On 03.23.2020, a new Provisional Measure (MP) No. 928/2020 was published which, among other things, repealed article 18 of MP 927, which dealt with the suspension of the employment contract by individual agreement for up to 4 months, during which the worker would not receive a salary.

All the other provisions of MP 927 remained unchanged. Thus, the general analysis of the measures presented by the Government to deal with the restrictions resulting from the State of Public Calamity recognized in Legislative Decree No. 6/2020 undergoes a minor revision.

The recognition, for labor purposes, that the pandemic constitutes force majeure, triggering the application of article 501 et seq. of the CLT, is maintained.

The provisions of the Provisional Measure apply to urban and rural workers, temporary workers and domestic employees, and also contain specific provisions relating to internship and apprenticeship contracts.

The precedence of the Provisional Measure’s provisions applies retroactively to 03.20.2020, the date on which the State of Public Calamity was recognized; it is valid for a minimum of 60 days, extendable for another 60, pending conversion into an ordinary Law, and will cease to have effect when the State of Public Calamity ends, that is, on 12.31.2020, as defined in Legislative Decree No. 6/2020.

The measures announced by the Provisional Measure are as follows: (i) telework; (ii) individual vacations; (iii) collective vacations; (iv) use and bringing forward of public holidays; (v) compensation for hours not worked; (vi) suspension of periodic medical examinations and training; and (vii) suspension of FGTS contributions for March, April and June.

 

1. GENERAL STATEMENT – ART. 2

Although art. 2 of the Provisional Measure provides that “employee and employer may enter into a written individual agreement in order to guarantee the continuation of the employment relationship, which shall prevail over other regulatory, legal and negotiated instruments”, it contains no objective provision applicable to specific cases, although it does contain a provision safeguarding the limits set out in the Federal Constitution.

Given the lack of objective definition in art. 2 of the Provisional Measure, specifically regarding the limits of what the employee may agree to in such a written individual agreement, its constitutionality and application in specific cases are entirely uncertain, especially since such an individual agreement would be allowed to prevail even over the Law (“legal instruments”). The option established by this article is entirely unworkable.

 

1. TELEWORK – ARTS. 4 AND 5

The first viable measure introduced by the Provisional Measure was the possibility of changing from in-person work to telework or home office — characterized by work performed predominantly or entirely outside the employer’s premises, using technological means.

Under the Provisional Measure, the adoption of home office will be at the employer’s discretion and will not depend on a collective or even individual agreement; it is sufficient to send written or electronic notice to the employee, intern or apprentice at least 48 hours in advance.

Once the change from in-person work to home office has been ordered, the employer will have 30 days to formalize the change in work arrangement in writing with the employee, intern or apprentice, at which time it must necessarily provide for responsibility for acquiring, maintaining and supplying the technological equipment and the necessary and adequate infrastructure for remote work, which involves reimbursing expenses borne by the worker due to the change in work arrangement and defining a compensatory amount for electricity and internet expenses to be reimbursed monthly to the employee.

If the worker does not have the equipment and infrastructure needed to work remotely, the employer may provide the equipment on loan and pay for infrastructure services (such as electricity and internet), amounts that will not be considered salary.

If the employer is unable to provide the material needed for remote work, the normal working hours will be counted as time at the employer’s disposal. In other words, if the work arrangement is changed and services cannot be provided due to lack of materials, the employee must still be paid.

While the home office arrangement lasts, the employer will not be required to control the employee’s working hours. Time during which the employee remains logged into the company’s system will not be considered time at the employer’s disposal, standby or on-call time, unless an individual or collective agreement provides otherwise.

In the current scenario, this is an emergency alternative to comply with the Federal Health Authority’s orders restricting workers’ movement, ensuring that the company can continue to provide services and maintain jobs.

 

• INDIVIDUAL VACATIONS – ARTS. 6 TO 10

The main change introduced by the Provisional Measure regarding vacations concerns the 48 (forty-eight) hour advance notice for granting vacations to the employee. In addition, vacations may be brought forward for employees who have not yet completed the accrual period. Granting vacations requires the following measures to be observed, giving priority to employees in the coronavirus risk group:

1. Notice to the employee, in writing or electronically, at least 48 hours in advance, stating the period to be taken by the employee;
2. Vacation periods may not be shorter than 5 consecutive days; and
3. They may be granted by decision of the employer, even if the employee has not yet acquired the right to vacation. That is, employees with less than 1 year of service and employees who have not yet completed a new accrual period since their last vacation.

As for vacation pay, the Provisional Measure also contains provisions temporarily deferring some amounts:

1. Payment of the constitutional one-third bonus, in addition to vacation pay, may be made by the date on which the 13th salary is due, that is, by December 20, 2020;
2. A request to convert one third of the vacation into a cash allowance will be subject to the employer’s agreement, with the deadline above applying; and
3. Vacation pay may be paid after the start of the vacation, provided it is paid by the fifth business day of the month following the start of the vacation.

On the other hand, for health professionals or those whose function is essential, the employer may suspend vacations and even unpaid leave, by formally notifying the worker of the decision in writing or electronically, preferably 48 hours in advance.

Essential activities are set out in Decree No. 10,282/2020 and include medical and hospital services, public and private security, intercity, interstate and international passenger transport and passenger transport by taxi or app, telecommunications and internet, remote banking and postal services, the press, among others listed in that Decree.

 

1. COLLECTIVE VACATIONS – ARTS. 11 AND 12

At the employer’s discretion, collective vacations may be granted to employees, simply by notifying the group of workers through a notice issued at least 48 hours in advance.

The Provisional Measure provides that the maximum number of annual periods and the minimum number of consecutive days provided for in the CLT do not apply — that is, collective vacations taken in 2 annual periods, provided neither is shorter than 10 consecutive days — and also expressly waives prior notice to the Ministry of Economy and the relevant union.

However, the Provisional Measure was silent on the need to post a notice in the workplace as provided for in § 3 of art. 139 of the CLT, so we understand that this requirement remains in place.

 

1. BRINGING FORWARD PUBLIC HOLIDAYS – ARTICLE 13

While the State of Public Calamity lasts, the employer may bring forward federal, state, district and municipal non-religious holidays (such as Tiradentes Day, Labor Day, Independence Day, Proclamation of the Republic Day and the municipal anniversary), and must notify the employees concerned, in writing or electronically, at least 48 hours in advance, expressly stating the holidays being used.

The use of religious holidays (such as Our Lady of Aparecida Day and Good Friday) will depend on the employee’s agreement, expressed in a written individual agreement.

Given that there is no limit on the number of holidays that may be brought forward, we recommend limiting this to a maximum of 7 holidays, which may be worked after the State of Calamity ends.

 

1. INTERRUPTION OF ACTIVITY AND HOURS NOT WORKED – ART. 15

Another option introduced by the Provisional Measure for use while the State of Public Calamity lasts is the compensation of working hours through an hour bank, by means of an individual employment agreement.

Thus, if activities are interrupted, each employee may enter into an individual employment agreement under which, during the interruption, the hours not worked will be recorded in an hour bank in the employer’s favor, which may be offset by additional work after activities resume, within up to 18 months from the date the State of Public Calamity ends.

The hour bank may be offset by extending working hours by up to 2 hours per day, with a working day that may not exceed ten hours, thus respecting the working-hours limit provided for in art. 59 of the CLT. The additional daily hours may be determined by the employer at any time, provided the limit of 18 months after the end of the calamity is respected, regardless of collective bargaining.

 

• SUSPENSION OF MANDATORY EXAMINATIONS AND TRAINING – ARTS. 15 TO 17

The Provisional Measure suspended the requirement to carry out periodic medical examinations, whether occupational, clinical or complementary, which must be carried out within 60 days from 12.31.2020.

The termination examination remains mandatory, except where the most recent occupational medical examination was carried out less than 180 days earlier.

The requirement to provide periodic and occasional training to current employees, as required by occupational health and safety regulations, was likewise suspended; such training may be provided through distance learning, with the employer ensuring the practical content so as to guarantee that activities are carried out safely, or, if training is not provided through distance learning, it must be provided within 90 days from 12.31.2020.

As for the CIPA (Internal Accident Prevention Committee), regardless of its term, the current composition may be maintained until the State of Public Calamity ends. Ongoing election processes may be suspended.

 

• SUSPENSION OF FGTS CONTRIBUTIONS – ARTS. 19 TO 25

The Provisional Measure suspended the requirement to pay FGTS contributions for March, April and May 2020, due in April, May and June 2020, respectively, for all employers, without the need for prior notice.

The FGTS contributions must be paid in 6 installments, starting with the payment for July 2020, with no adjustment, fine or charges under art. 22 of Law 8,036/1990. In other words, the FGTS amounts for March to May may be paid in 6 installments between July and December 2020.

If the employer opts for installments, (i) payment must be made in up to 6 monthly installments, due on the 7th of each month, starting in July 2020; and (ii) the employer must declare itself a debtor to the FGTS Management Board by June 20, 2020.

If the employment contract is terminated, the amount due must be paid to the employee within the deadline for paying severance.

The validity of FGTS regularity certificates issued before the Provisional Measure came into force was extended by 90 days, with the proviso that ongoing FGTS debt installment plans with installments falling due in March, April and May will not prevent the issuance of such regularity certificate.

Finally, the Provisional Measure suspended the limitation period for debts relating to FGTS contributions for 120 days from 03.20.2020.

 

1. OTHER LABOR PROVISIONS

In addition to the provisions discussed above, the Provisional Measure also provides for:

1. Extension of working hours for employees in health establishments, by written individual agreement, even for unhealthy activities and for the 12×36 schedule, and adoption of an overtime schedule between the 13th and 24th hour of the rest period between shifts, without administrative penalty, guaranteeing the employee paid weekly rest (DSR/RSR);
2. Compensation for such hours within 18 months from 12.31.2020, through an hour bank or paid as overtime;
3. Suspension of procedural deadlines for submitting defenses and appeals in administrative proceedings arising from labor infraction notices and FGTS debt notices, for 180 days from 03.22.2020;
4. That cases of coronavirus (covid-19) infection will not be considered occupational, except upon proof of a causal link;
5. Extension, at the employer’s discretion, for 90 days after the end of the 180 days from 03.22.2020, of expired or expiring collective agreements and collective bargaining agreements;
6. An advisory role for Labor Inspectors, except regarding (i) failure to register employees, based on complaints; (ii) situations of serious and imminent risk, only for irregularities directly related to the situation; (iii) fatal work accidents investigated through an accident analysis inspection procedure, only for irregularities directly related to the causes of the accident; and (iv) work in conditions analogous to slavery or child labor;
7. Non-applicability of the Provisional Measure to teleworkers with respect to the regulations on call center and telemarketing work set out in Section II of Chapter I of Title III of the CLT;
8. Validation of measures adopted by employers that do not conflict with the Provisional Measure, taken in the thirty days before the Provisional Measure came into force.

 

FINAL REMARKS

In addition to the provisions of MP 927/2020, it is worth recalling the provisions of Law 13,979/2020, whose measures aim to protect the community in view of the coronavirus outbreak.

The third paragraph of article 3 of Law 13,979/2020 provides that “The period of absence resulting from the measures provided for in this article shall be considered an excused absence from public service or private employment”.

That is, absence from work will be considered excused for people subject to: (i) isolation; (ii) quarantine; (iii) compulsory medical examinations, laboratory tests, collection of clinical samples, vaccination and other prophylactic measures or specific medical treatments; and (iv) movement restrictions following return from international travel.

The legal distinction between isolation and quarantine clarifies that isolation is intended for infected workers with a positive diagnosis, and quarantine for workers suspected of infection.

Therefore, in the case of suspected infection, the person must be referred to the competent public bodies for testing and, if leave of more than 15 days is required, must be referred to the INSS.

However, if the employee tests negative for the virus and the absence is only for one or a few days, they must present the corresponding medical certificate, as is normally done (art. 6, first paragraph, “f”, of Law 605/1949), in which case the absences will also be excused and paid.

In any event, the company’s duty to safeguard the health and safety of its employees (art. 7, XXII, of the Federal Constitution and art. 157 of the CLT) must not be forgotten, but measures must also be taken to maintain companies’ economic health while preserving jobs.

Access the material prepared by our team here (in Portuguese).