End of six-day workweek could affect thousands of labor agreements
Alessandra Barichello Boskovic
Divulgação
The constitutional amendment proposal that restricts the use of the six-day workweek—six days of work followed by one day off—could have as its first legal effect the annulment of thousands of clauses in collective agreements already signed, if the Senate approves it in the same form passed by Brazil’s Chamber of Deputies. With the annulment, new rounds of negotiations would have to be opened between employer unions and labor unions.
With the reduction in maximum weekly working hours, labor law specialists explain, shift systems, for example, will have to be redesigned. In that replanning, more hours may be characterized as overtime. But such a measure, they say, will have to be managed carefully. In practice, it may be safer for companies to hire more workers.
The result will be higher costs. A study by the National Confederation of Industry (CNI) indicates that the proposal to reduce the weekly workweek from 44 to 40 hours, with no salary reduction, could increase costs for formal employees by up to R$267.2 billion a year, representing up to a 7% increase in payroll. An estimate by Santander points to a short-term negative mechanical cost to Brazil’s gross domestic product (GDP) of about 2.5%.
The increase in costs resulting from the new rules is one of the main criticisms of the proposal from the productive sector. Companies argue that higher expenses must be offset by productivity gains to be sustainable, but there is no movement to address the shortage of qualified workers. One consequence, according to them, will be passing these costs on to consumers, generating inflationary pressure and reducing the competitiveness of Brazilian products in foreign markets.
Alessandra Barichello Boskovic, a partner at Mannrich e Vasconcelos Advogados, notes that the sectors most likely to be affected by the new requirements are those that depend on differentiated schedules and collective bargaining to organize their operations, such as health care, industry, retail, logistics, transportation, hospitality, and essential services.
And that impact could be felt quickly. Under the text to be analyzed by senators, collective clauses on working hours and paid weekly rest that conflict with the new rule would cease to be valid. In practice, according to specialists, if the constitutional amendment is approved, they could automatically lose validity.
According to Boskovic, rendering ineffective some of the clauses defined through collective bargaining because of the amendment could “create an imbalance in the collective agreement.” The lawyer explains that companies and workers make reciprocal concessions in these agreements. “Often, certain forms of flexibility in working hours or differentiated schedules are negotiated in exchange for economic benefits, additional compensation, job guarantees, or other advantages for workers.”
For Marcos Fantinato, partner at Machado Meyer, the renegotiation process will further consolidate the Federal Supreme Court’s (STF) understanding that negotiated terms prevail over statutory law (Theme 1046). “Security for employers and workers will come from the collective rule,” he says.
The imprecision of the amendment’s wording and the breadth of the new provisions will open the door to litigation, according to Domingos Fortunato, labor and union partner at Mattos Filho. In his view, including categories with special working hours in the new schedule creates challenges. “Oil workers, for example, are organized worldwide on a schedule of 14 days of work followed by 14 days off, because they are transferred among platforms around the world. It will be impossible to adjust that to two weekly days off,” he says.
Another criticism is that the 60-day deadline for adaptations, starting from the enactment of the law, would be far too short. The São Paulo Retail Workers’ Union, for example, represents about 500,000 workers. “I point this out because of the feasibility of negotiating with so many companies at the same time,” Fortunato says.
He also says companies’ costs are likely to increase significantly. “With margins already low, some sectors will have to pass this cost on to consumers,” he concludes.
For companies that use time banks, specialists say compensation remains the better option, with overtime exchanged for days off or reductions in working hours. In this regard, the constitutional amendment made no changes—compensation remains limited to 10 hours a day. In practice, more hours may be considered overtime, according to Celso Báez, a partner in the labor practice at Demarest. “We see a greater impact on shift systems and compensation between weeks, because the weekly average would need to be readjusted to 40 hours,” he says.
Báez explains that it is usually cheaper for companies to pay overtime to existing employees than to hire new workers, when all related costs are taken into account. However, he warns against prearranged overtime—hiring someone for 44 hours a week with the expectation that four of those hours will be paid as overtime. “In practice, this would amount to ‘circumventing’ the new constitutional limit, creating relevant financial contingencies,” he says. As a result, he adds, most companies will likely have to hire more employees.
To work around the amendment’s restrictions, the new workweek also leaves room for hiring individual micro-entrepreneurs (MEIs), lawyers point out. But the validity of this type of hiring is still being debated before the Federal Supreme Court, in the case discussing the practice known as “pejotização,” or hiring workers as legal entities (Theme 1389).
For Báez, service providers hired as MEIs are not subject to working hours and would not be affected by the reduction. “From this perspective, there may indeed be some incentive for companies to seek alternative ways of hiring service providers as a strategy to try to ‘bypass’ the reduction in working hours.”
Marcos Fantinato says he understands that the purpose of the constitutional amendment is to improve the balance between time available for work and time dedicated to employees’ personal lives. But he says that although the proposal is an important step in that direction, the debate will not move forward as long as work is not considered in monthly or annual terms, rather than in daily or weekly terms. “Perhaps collective bargaining can open space for the creation of biweekly, monthly, or annual advantages, such as working 10 consecutive days to take 15 days off afterward,” he argues.
Translation: Todd Harkin