This Wednesday (26), the Chamber of Deputies (Brazil's lower house of congress) approved, by 296 votes to 177, the basic text of the bill that modernises labour relations in the country. Aiming to provide a much-needed boost to the labour market and increase legal certainty for companies, the new legislation provides that collective bargaining agreements can prevail over the law on certain matters and unions will no longer be required to assist workers in the termination of employment contracts.

With the changes, workers and companies can better adapt to changes in the current reality of the labour market, which is more dynamic, and the levels of informal work are also expected to decrease. The amendments proposed to the basic text are still being reviewed by the legislature.

Some of the major improvements the new bill introduces to Brazil's current labour code (the so-called Consolidation of Labour Laws, or CLT) include the prevalence of agreements between employers and employees over laws, regulations for intermittent and temporary work and more flexibility on how employees can spend their vacation days, which are part of the 16 issues for which the new law would allow bargaining agreements to override the law.

The text approved also provides for safeguards to protect workers. For example, arrangements such as working hours and compensatory time can now be more flexible, but other rights guaranteed by the Constitution, such as the right to the "13th salary" (a one-month-wage yearly bonus provided for in law) may not be reduced or changed.

In addition, the text also prohibits the dismissal of an employee and his/her immediate rehiring as an outsourced supplier. Under the proposal, employees who are dismissed are subject to a "quarantine" of 18 months before they can be hired under a different system from the one through which they were originally hired.

One of the main economic measures of the federal government, the modernisation of the CLT will help reduce the backlog of labour courts and greatly simplify work relations for several professional categories, some of which are governed by seven different pieces of legislation.