A few days after coming into force, Law 13,467/2017, known as the Labor Reform, was supplemented by the Executive Branch with the publication, on 11.14.2017, of MP 808/2017, which amended and added certain points. It changed, for example, the previous freedom regarding the frequency of payment of bonuses without corresponding remuneration effects, which, under the Provisional Measure, would only lose their salary nature if paid every six months. It also supplemented the intermittent employment contract, spelling out several situations not provided for in Law 13,467/2017.
However, on 04.23.2018, once its term had expired, the Provisional Measure lapsed and its text was removed from the legal system. Thus, to keep the examples above, monthly payment of bonuses will not, in itself, affect their salary nature. The intermittent contract returned to a state of doubt and incompleteness.
At the end of May, the Executive Branch again issued a rule that partly repeated the text of the now-expired MP 808/2017. However, it did so through an administrative rule: Ordinance No. 349, published on May 23, 2018 by the Ministry of Labor, whose stated scope is: “Establishes rules for the implementation of Law No. 13,467/2017, of July 13, 2017, within the regulatory powers of the Ministry of Labor”.
Unlike the Provisional Measure, this Ordinance does not have the force of Law. It therefore does not fill the legal vacuum left by MP 808/2017 when it was in force. In other words, while set out in the Provisional Measure, the rules were mandatory. Now, as a Ministerial Ordinance, the rules serve to guide the Ministry of Labor itself in its activities, specifically for inspections carried out by the Ministry of Labor’s Inspectorate.
Even so, it is a text that should be known and consulted whenever any of the topics it covers is in doubt in dealing with labor matters within the company. Even without the force of Law, it is a source for interpreting the new Labor Law and will be applied by Labor Inspectors in their inspections.
The topics of MTE Ordinance 349 of 05.23.2018 are:
Self-Employed Worker – Clarifies that working for only one service recipient, even exclusively, does not affect the employment nature of the relationship. Even so, it states expressly that “Where legal subordination is present, an employment relationship shall be recognized”. It points out that regulated professions are typical for self-employed work, naming the professions of driver, sales representative and real estate broker.
Intermittent Employment Contract – Defines the possibility of monthly remuneration, clarifies in detail how the average remuneration is calculated and confirms that the employer is responsible for withholding income tax and social security contributions. It innovates, however, by providing for a situation in which the intermittent employment contract may be recharacterized, resulting from the mere payment to the worker for time at the employer’s disposal during the period of inactivity, which will certainly lead to in-depth discussions in the Courts.
Tips – Requires the average tips received in the month to be recorded in the employee’s Work and Social Security Card (CTPS).
Workers’ Representation Committee – Confirms what the Constitution already states, namely that the Committee does not replace the Union in negotiating Collective Agreements and Collective Bargaining Agreements.
The new Ordinance will certainly give rise to divergent decisions in the Courts, both in terms of interpreting the Labor Reform and in terms of whether the Executive, through the Ministry of Labor, may act as Legislator.
It is a fact that the Ordinance does not contradict the Law in force, but it nevertheless provides for situations not defined in the Law, going beyond what was legislated, from which conflicts in the application of the rule may arise, making its analysis and knowledge extremely important for Labor Law practitioners.
