On the evening of April 26, 2017, Brazilian Federal Chamber of Deputies approved the Bill No. 6.787/2016, which makes several changes to the Brazilian Labor Code (“Consolidação das Leis do Trabalho” or “CLT”) and is the reason why the project is also known as “Labor Reform” (or “Reforma Trabalhista”), since it changes major material aspects regarding labor relationships, as well as points related to the  labor lawsuits procedures.

It is worth to emphasize that the Bill is still subject to discussion and approval by the Federal Senate, and, subsequently, to the future sanction by the President of the Republic, and, as a result, the final text of the Bill may be significantly changed until its definitive approval.

With these observations in mind, we point out the main matters and themes that were changed through the Bill’s text and approved by the Chamber of Deputies:

  • Changes to the Procedural Labor Law (such as: Admissibility of the Review Appeal; Appeal Deposit; Court Costs; Company’s Representation in Court Hearing; Enforcement ex officio by the Judge; Incompetence Allegation; Initial Pleading; Judgment by Default; Lawsuit Waiver; Liability of the Retiring Partner; Litigation without Costs (restricted cases); Mandatory Manifestation of parties about Settlement Calculations Procedural Damage for Bad-Faith Litigation; and, Procedural Time Counting
  • 12x36 Work Regime (12 hours of work for 36 hours of rest);
  • Mutual Resignation;
  • Annual Discharge;
  • Attorney’s Fees;
  • Burden of Proof;
  • Collective Bargaining Agreements prevailing over the Legislation (in some restricted matters);
  • Collective Dismissal;
  • Companies’ Succession and related Labor Liability;
  • Dismissal with Cause for Loss of Professional License;
  • Disregard of Legal Entity;
  • Economic Group and related Labor Liability;
  • Effective Service Time;
  • Employees’ Representative Committee;
  • Enforcement of the Collective Bargaining Agreements;
  • Expert’s Fees;
  • Extrajudicial Agreement Validity;
  • Extrapatrimonial Damage;
  • Fine due to Unregistered Employee;
  • Free Negotiation of Labor Agreement’s Clauses;
  • Bank of Hours and Workshift Compensation;
  • In itinere Hours (transportation period);
  • Intercurrent Statute of Limitation;
  • Intermittent Employment Agreement;
  • Intra-Day Interval (Break for Meal and Rest);
  • Labor Debtors’ Registration (BNDT – National Registration of Labor Debtors);
  • Lawsuit’s Credit Guarantee Insurance;
  • Lawsuit’s Dismissal in case of Plaintiff’s Absence in the Hearing;
  • Part Time Regime;
  • Possibility of Arbitration on Labor Disputes;
  • Possibility to take the Vacation rest divided in 03 periods;
  • Home Office;
  • Allowances not characterized as Salary
  • Salary Equalization;
  • Specific Collective Agreement (negotiated by the employer) prevails over General Collective Agreement (negotiated for the entire economic sector);
  • Suppression of the Position of Trust Allowance;
  • Understandings about sources of Labor Law;
  • Unhealthy Work Place (protection and new regulation for pregnant women);
  • Non-mandatory Union Contribution;
  • Voluntary Resignation Program.

Moreover, as aforementioned, the Bill approved by the Chamber of Deputies was remitted to the Federal Senate, that may approve, change or reject the text previously approved by the Chamber.

If the text is approved without any changes, it will be forwarded to the President of the Republic for sanction. If any changes in the legal text are made by the Federal Senate, the text returns to the Chamber of Deputies before going to the Presidential sanction.

On the text approved is received by the Congress (Chamber of Deputies and Federal Senate), the Presidency of the Republic may even veto, totally or partially, the items above.

Considering such situation, it is worth remarking that the proposed Bill of Law indicated above may suffer significant further changes before their effective ruling.

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We emphasize that our labor department’s team is available to clarify  any doubts related to the Bill of Law in question, as well as relevant matters related to it.

Observations in this update about Brazilian law are by Tauil & Chequer Advogados. They are not intended to provide legal advice to any entity; any entity considering the possibility of a transaction must seek advice tailored to its particular circumstances.