Care needed when advising on Brazilian employment law
In Brazil, international employment law can often become a hybrid of domestic Brazilian law and relevant international law. The mention of domestic Brazilian employment means, specifically, the Consolidation of Labour Laws, issued in 1943. Roberta Santayana, Director of Special Projects at Russell Bedford Brazil sheds light on its principles
Brazilian employment law follows ILO principles
This legislation found its inspiration in the regulations and guidelines laid down by the International Labour Organisation (ILO), of which Brazil is a founding member. The ILO exists to establish and promote minimum global standards for social justice, human rights, and employment rights. Thus, Brazilian law follows these ILO principles to protect the rights of employees.
By necessity, Brazilian law has evolved since 1943 – the latest changes occurred in 2017. However, the principals of the ILO standards remain intact, protecting workers, in areas such as:
- health and safety
- child labour
- slave labour
- freedom of association
- equal opportunities
- gender equality
This also has the effect of making life easier for foreign businesses operating in Brazil, when employing Brazilian nationals, if their home jurisdiction also observes and abides by ILO conventions, even where their local laws differ from Brazilian laws. Further, accountancy firms advising foreign businesses will find it easier to bring them into line with the required Brazilian standards.
Roberta Santayana, Director of Special Projects at Russell Bedford Brazil
Brazilian nationals working overseas
That said, advisers need to pay special attention where businesses (whether Brazilian or foreign), hire Brazilian nationals to work overseas. Generally, local employment laws will govern the employment contract, except where Brazilian law is more favourable to the employee, in which case Brazilian law overrides local law (Law 7064/82, amended by Law 11962/2009). Put simply, the better law applies.
Resolving labour conflicts
Therefore, when advising on, or trying to resolve, labour conflicts, be aware of these three basic principles:
1. Employees hired and working in Brazil, even if they have a foreign employer, must observe, and abide by, Brazilian employment law
2. Employees hired in Brazil to work overseas benefit from local or Brazilian employment law, whichever is more favourable to the employee
3. Foreign businesses hiring Brazilian nationals to work abroad can use local employment law provided Brazilian law is not more favourable
These are the general rules of international employment law that Brazil adopts. Advisers must understand these principles to guide their clients, whether Brazilian businesses operating overseas or overseas businesses hiring in Brazil.