by Luiz Fernando Plens de Quevedo
On April 1, 2020, MP 936 was published which, in addition to establishing the Emergency Employment and Income Maintenance Program, also supplemented MP 927/2020. Although the Program is aimed at the MAINTENANCE of Employment and Income, it ended up establishing the Emergency Benefit for the PRESERVATION of Employment and Income.
Regardless of the unjustifiable difference between the names given to the program and the benefit, there is an unjustifiable abandonment of the strategy provided for in art. 18 of MP 927/2020 which, to be adequate to address the impacts of measures restricting people’s movement in response to the dramatic spread of the pandemic, would only have needed its §5 repealed, keeping applicable article 2-A of the Unemployment Insurance Program, which provides for payment of the professional training allowance. In other words, had § 5 of art. 18 of MP 927 been repealed, every employee with a suspended contract would receive unemployment insurance installments for the corresponding period, guaranteed for a maximum of four months.
By allowing employers to suspend employment contracts for up to four months without any consideration from the Government to employees, the response presented by MP 927/2020 proved inadequate, and its art. 18 was repealed in less than 24 hours. The new Provisional Measure also allows the employment contract to be suspended, now for only 60 days, or salaries to be reduced in proportion to the reduction in working hours for 90 days, now with guaranteed consideration from the Government to employees through unemployment insurance.
However, while art. 18 of MP 927, broadly speaking, was based on the hypothesis of art. 476-A of the CLT — “The employment contract may be suspended for a period of two to five months for the employee to participate in a professional training course or program offered by the employer, lasting as long as the contractual suspension, as provided for in a collective bargaining agreement or collective agreement and with the employee’s formal consent, subject to art. 471 of this Consolidation” — while removing the requirement of collective bargaining, MP 936 was based on the hypothesis of art. 503 of the CLT — “In the event of force majeure or duly proven losses, a general reduction of the company’s employees’ salaries, in proportion to each one’s salary, is lawful, but may not exceed 25% (twenty-five percent), subject in any case to the regional minimum wage” – which contains no provision for collective bargaining for its application. However, art. 503 of the CLT must be interpreted in line with the Constitution, specifically item VI of art. 7 — “irreducibility of salary, except as provided in a collective bargaining agreement or collective agreement.”
Even if the constitutionality of art. 18 of MP 927 could be questioned, there is no doubt whatsoever as to the unconstitutionality of the Emergency Employment and Income Maintenance Program, since the requirement of collective bargaining to reduce salaries is set out in item VI of art. 7 of the Constitution. This includes the new possibility of suspending the employment contract, since, in the dynamics of MP 936, suspension follows the scale of salary reduction, starting from a minimum of 25%, with reductions of 50% to 70% possible, reaching the maximum reduction of 100% with the respective suspension of the employment contract.
Although every employer may enter into an individual agreement to reduce salary and working hours by up to 25%, three salary brackets were established for exempting the other percentages of salary reduction and suspension of the employment contract from the requirement of collective bargaining. In this case, employees earning up to three minimum wages (BRL 3,135.00) and employees with a university degree and a salary above twice the social security benefit cap (BRL 12,202.12) may have their salary and working hours changed, and even their contracts suspended, by individual act and without union assistance. Employees earning between BRL 3,135.01 and BRL 12,202.11, or above that amount if they do not hold a university degree, may only have their working hours and salary reduced by more than 25%, or their employment contracts suspended, through collective bargaining.
The Special Secretary of Social Security and Labor of the Ministry of Economy, at a press conference presenting MP 936, justified the division into three salary brackets as a way to avoid greater losses for workers. However, he did not explain why, when the Emergency Employment and Income Maintenance Program is applied through collective bargaining, regardless of salary bracket, employees will actually lose benefits, with unemployment insurance excluded when the salary reduction does not exceed 25% and a gradual reduction in the benefit the employee would receive, simply because collective bargaining took place. In other words, if the employee is assisted by their union, they will suffer an immediate reduction in the benefit to which they would be entitled if the negotiation had been limited to the individual level.
This violates art. 8 of the Constitution, specifically, but not only, items I — “the law may not require State authorization to found a union, except for registration with the competent body, and the Government is prohibited from interfering or intervening in union organization” — and VI — “union participation in collective labor negotiations is mandatory”. By linking collective bargaining to the exclusion or proportional reduction of the benefits to which employees will have access, MP 936 commits a further constitutional violation, which definitively calls into question the Government’s ability to adopt the necessary and effective measures to safeguard jobs with a minimum of legal certainty.
