Aiming to support job creation and employee retention in the country, President Michel Temer signed a Provisional Measure (a type of Executive Order, usually called an MP in Portuguese) and sent a bill to Congress to modernise labour laws this Thursday (22).

The MP extends the Employment Protection Programme (PPE in the Portuguese acronym), the validity of which would end on June 31 this year. The programme will be extended for another year, now under the name Employment Assurance Program (PSE). The other initiative, formulated as a bill to be sent to Congress, aims to strengthen labour relations through collective bargaining.

All changes have been discussed with the Ministry of Labour, employers and employees before being announced.

“Brazil needs fraternity, peace, harmony, serenity... Therefore (...), I am sure Ronaldo [Nogueira, Labour Minister] will create intense dialogue on these issues, and this is a mark of our government. I sometimes equate the idea of government with the idea of dialogue," said the president.

New rules

The new Employment Assurance Program allows employers to reduce working hours by up to 30% with the government subsidising 50% of the salary decrease. The subsidy is limited to 65% of the maximum monthly amount the employee would have been paid as unemployment insurance (a benefit payable to Brazilian workers dismissed without cause).

The MP that creates the programme also defines rules for probation employment agreements. Workers will now be hireable on a probational basis for 120 days (up from 90 before), extensible for the same period.

In contrast, the bill gives more legal force to collective bargaining agreements that address topics such as instalment plans for holiday pay and compensatory time regimes. The proposal stipulates that unions and companies can negotiate working hours up to 220 hours per month.

“The most important thing for Brazil is being done now, which is to send a bill to Congress that can maintain and create jobs and is the result of social dialogue and mutual understanding. With this bill, we break with old paradigms to bring labour relations in Brazil to the 21st century, "said Minister of Labour, Ronaldo Nogueira.

FGTS

At the same ceremony, President Michel Temer also signed an interim measure that allows workers to withdraw funds from inactive FGTS (Guarantee Fund for Length of Service) accounts.